Digital platforms and ecosystems: remarks on the dominant organizational forms of the digital age

Abstract

ABSTRACT What are the principal consequences on organization and management of the ongoing Digital Revolution? This essay examines how value can be created and captured in fundamentally new ways thanks to digital innovation. I propose that digital platform firms and their ecosystems are the emblematic organizational form of the digital age. I present the main implications of the rise of digital platforms and ecosystems on competition and innovation. The paradox of digital platforms in their current organizational form is that while distributed patterns of value creation characterize the circumstances that allowed them to emerge, the business models they have adopted have led to a centralized modality of value capture. This has given rise to salient instances of digital platform firms’ abuse of economic power over their ecosystem members and to widespread concerns on digital platforms firms’ abuse of power on other dimensions, including privacy and labour relations. In my conclusion, I highlight the importance of future research on ecosystems’ governance and call for a careful examination of a platform firms’ responsibilities in society.