Abstract
In a technology-driven, digital world, many of the largest and most successful businesses now operate as ‘platforms’. Such firms leverage networked technologies to facilitate economic exchange, transfer information, connect people, and make predictions. Platform companies are already disrupting multiple industries, including retail, hotels, taxis, and others, and are aggressively moving into new sectors, such as financial services. This paper examines the distinctive features of this new business model and its implications for regulation, notably corporate governance. In particular, the paper suggests that a tension exists between the incentives created by modern corporate governance and the business needs of today’s platforms. The current regulatory framework promotes an unhealthy ‘corporate’ attitude that is failing platforms, and a new direction (what we term ‘platform governance’) is urgently required. In identifying this new regulatory direction, the paper considers how firms might develop as successful platforms. Although there is no ‘one-size-fits-all’ solution, the paper describes three interconnected strategies: (1) leveraging current and near-future digital technologies to create more ‘community-driven’ forms of organization; (2) building an ‘open and accessible platform culture’; and (3) facilitating the creation, curation, and consumption of meaningful ‘content’. The paper concludes that jurisdictions that are the most successful in designing a new ‘platform governance’ based on the promotion of these strategies will be the primary beneficiaries of the digital transformation.
Highlights
In a technology-driven, ‘digital world’, many of the largest and most successful businesses operate and organize as open and inclusive ‘platforms’.1 Most platforms leverage networked technologies to facilitate economic exchange, transfer information and connect people.2 Think Amazon, Apple, Facebook, or Alphabet (Google).3 These companies all facilitate interactions between creators and extractors of value and, in doing so, generate wealth for the platform owner-controller.4 a platform derives value from its role as intermediary.5But platform companies do more than merely utilize new technologies to facilitate economic or social interactions between interested third parties
It suggests that there is currently a disconnect between the regulatory pressures created by corporate governance and the needs of firms seeking to establish themselves as successful platforms
We present a model of platform governance that includes the roles of social media, flatter and open organizations, and directors as ‘feedback providers’
Summary
In a technology-driven, ‘digital world’, many of the largest and most successful businesses operate and organize as open and inclusive ‘platforms’.1 Most platforms leverage networked technologies to facilitate economic exchange, transfer information and connect people. Think Amazon, Apple, Facebook, or Alphabet (Google). These companies all facilitate interactions between creators and extractors of value and, in doing so, generate wealth for the platform owner-controller. a platform derives value from its role as intermediary.. There is no ‘one-size-fits-all’ solution, the paper outlines three interconnected strategies relevant to any firm looking to operate as a platform: (1) leveraging current and near-future digital technologies to create more ‘community-driven’ forms of business organization; (2) building an ‘open and accessible platform culture’; and (3) facilitating the creation, curation, and consumption of meaningful ‘content’. We describe these strategies and argue that they can benefit all businesses (both ‘old’ and ‘new’) that want to adapt to the unique challenges of a tech-driven, global economy.
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