Digital platforms’ strategies in Indonesia: Navigating between technology and informal economy

Abstract

So far, research on platform-driven firms has been focusing on regulatory cracks. In an emerging market, however, the informal economy – a gap between legal and illegal – is a potential opportunity to increase technology-driven ventures. This study examines how platform-driven firms assist informal economy activities in exploiting technology and how the different traits between informal economy and technology firms shape their interaction. Using a qualitative approach, I presented multiple case studies from 22 interviews with start-up founders and managers. The result showed four types of interaction of platform-driven firms accommodating the informal economy: service standardization, existent community reorganization, non-employee co-creation, and tool-based collaboration. This study sheds light on practical approaches for platform-driven ventures in juxtaposing traditionality with modernity. Despite platforms driving informal to become more accessible, it is lucrative for the government to arrange reliable incentives and frameworks for harnessing the informal and digital sectors.