Online platforms are pervasive and powerful in today’s economy. We explore the increased centrality of platforms in two ways. First, we measure the extent to which platforms are insinuating themselves into the economy. We accomplish this by analyzing the presence of platforms as intermediating organizations across all US service industries at the six-digit North American Industry Classification System code level. Our results show that 70% of service industries, representing over 5.2 million establishments, are potentially affected by one or more platforms. Secondly, we undertake a detailed firm-level case study of the mega-platform, Amazon, which demonstrates the ways that the aforementioned macro-level data is expressed by a single platform firm. This case study shows that Amazon’s growth trajectory has resulted in it entering and transforming existing industries and sectors. We conclude by reflecting upon the limitations and implications for future research.
Digital platform firms are among the most valuable firms in the world due, in large part, to the ecosystems of complementors that have emerged around them. We explore the contradictory impact that platforms have on entrepreneurship. The ecosystem metaphor used to describe the network of interdependencies among the members is intrinsically flawed because it obscures the god-like powers of the platform owners. In fact, complementors are dependent entrepreneurs whose businesses and existence is largely determined by the platform owner. We show that digital platforms ease entrepreneurial entry by lowering entry costs and providing boundary resources to attract and support complementors. And yet, businesses dependent upon digital platforms are extraordinarily precarious. The reasons for this precariousness include the extraordinary visibility that platform owners have over all participants, an ability to unilaterally change the terms and conditions of participation, and even become a direct competitor to entrepreneurs dependent upon the platform. We describe the limited strategies that dependent entrepreneurs can utilize in an attempt to mitigate their dependence. We suggest that the relegation of entrepreneurs to dependence requires a new way of thinking about entrepreneurship as platforms continue their march to centrality in the global economy.
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