The Platform Economy Matures: Measuring Pervasiveness and Exploring Power

Online platforms are pervasive and powerful in today's economy. We explore the increased centrality of platforms through two empirical contributions. First, we measure the extent to which platforms are insinuating themselves into the economy. We accomplish this by providing quantitative evidence of the extent to which platforms are intermediating business activities across all US service industries at the six-digit NAICS code level. Our results show that 70% of service industries, representing over 5.2 million establishments, are potentially affected by one or more platforms. Second, we concretize the macro-level evidence with a firm-level case study of the mega-platform, Amazon. We elucidate the ways in which Amazon has grown by extending its sway to new industries and sectors. We show how both the mega-platforms and sectoral platforms leverage their ecosystems to extract value from the relationships that they intermediate. We conclude by reflecting upon the implications for regulation and future research directions.

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