Platform economy is a growing field evolving companies like Google, Facebook and Uber which create online structures that redefine the way we work and socialize.
Platforms are versatile digital frameworks on which participants interact with others and are which diverse in functions and structure. These online structures created by companies such as Google, Facebook, Airbnb Uber etc. have paved the way to deep changes. The way we work, socialize, communicate and create value has changed dramatically in the recent years.
Platforms must be seen as business models which create communities and markets which permit users to interact.
There are several categories of platforms, which reaches from service marketplaces like Uber, product marketplaces like Amazon, payment platforms like PayPal, Social network platforms like Facebook and LinkedIn, communication platforms like WhatsApp, to content platforms like Twitter.
The difference to traditional companies is that they do not control inventory but create ecosystems that use the method of connections and the concept of mobilizing people to contribute. A platform is not just a technology, a mobile application or a website but a holistic business model and a new economy based on digitization. As an example, there are digital platforms like Google that offer search functions and Facebook which provides social media capabilities. At the same time they feature an infrastructure on which other platforms can be built. Established businesses like hotel and taxi businesses have to deal with platforms like Airbnb and Uber which change the market conditions and value creation and are considered as shared economies. Thus, Uber monetizes cars, and Airbnb monetizes apartments, the common core is the usage of the basic principle of the digitizing of value-creating human activities. On the one hand, industries become transformed by platform companies in a way that threatens existing sectors and service providers such as hotels or taxis and commerce and trade. On the other hand, new platforms generate new value creation like app stores and YouTube.
Digital platform economies have already a huge impact on our society, markets and individuals and its consequences and dynamics in the future are indefinite. If the industrial revolution was about manufacturing, the changes nowadays are about platforms.
Liteature: Parker, van Alstyne, Choudary (2016): Platform Revolution: How Networked Markets are transforming the economy and how to make them work for you. New York: Norton & Company