The Platform Economy: Next Wave of Connectivity

The Age of Platforms has Arrived

The remarkable increase in expansion of the many new platform-based ecosystems is rapidly developing into what is known as the “Platform Economy”. With the ability to leverage capabilities and create value for both the individuals and organizations involved, this dynamic new economy has created an enormous potential for innovation and growth.

In the past few years many platforms have become household names. They have reshaped processes and increased productivity around the globe. Today platforms have emerged in every major sector to change how we communicate with each other and conduct transactions.

Making major purchase decisions like cars and homes — and even minor ones like groceries has completely changed. Our daily of life and expectations for services like entertainment, travel, finance and work are also remarkably different now than they were a decade ago.

The Platform Concept is Not New

Since the days of ancient history when community markets, auction houses and bazaars were the primary gathering place for commerce, platforms have been part of society. Many centuries of change have evolved platforms into the revolutionary global economic forces they are today. The difference is now with a technology-enabled society a location or physical contact is no longer required as a basis for exchange.

Platforms are Not a Technology

What platforms are is an influential mechanism to create massive technological shifts. These shifts are achieved by introducing innovative non-linear business models into the traditional marketplace. The more successful a platform becomes the more it truly transforms redefines a method of doing business. Platforms are often made up of many technologies, not just one.

Platforms are Simply a Strategy

A platform-based strategy is one that essentially transforms and disrupts a traditional linear supply chain to create a new interdependent value chain. Through technology, this new decentralized value chain is able to increase exponentially through its growing network of users. This network can be rapidly leveraged by economies of scale.

The advantage to reaching the level of the optimal point of an “economy of scale” is that the larger the platform grows the greater the cost savings, both to the producer and to the consumer.

Each platform requires an external ecosystem in order to grow. The platform is the host and the ecosystem provides the feedback necessary between the participants to allow for continued innovation.

Platforms are Connected and Collaborative

Another way to look at it is that technology platforms do not “own” the means of production, but instead “create” the means of connection. This connection serves as a strategic and interdependent way for consumers and producers to get what they need from each other without a physical intermediary.

Prosperous Platforms are Efficiency Driven

From the start successful platforms eliminate trade barriers and provide easier and wider access for all participants. Thereafter the ecosystem around the platform then strives to reach help it reach critical efficiencies such as improved productivity, reduced cost and strengthened consumer-producer relationships that increase revenue. This is the point that Prosumers add the most value with various levels of engagement.

Once a platform achieves critical mass, there is a limited control of resources. Expanding a platform then becomes more about how to thoughtfully manage the organization and coordinate its capabilities. Through a decentralized process of feedback and collaboration, the platform and the ecosystem must be well integrated so that they can be leveraged to create value the ultimate goal of reaching economies of scale where adding every new user is profitable.

The Platform Economy: An Ecosystem of Networks

It doesn’t matter if the network is on the enterprise level or the consumer level, companies across the globe are embracing new technologies to make their platforms more competitive and easier to use. A few of the more recent ones include: blockchain, the internet of things (IoT) and artificial intelligence.

If you think about it, even the seemingly simplest transaction such as an online purchase or ordering a ride-share often requires interfacing with multiple intersecting platforms to get the transaction completed. It is this wave of inter-connectivity is what is causing the Platform Economy to grow and thrive at such a rapid rate.

Learn About Other Prosumer Related Economies

EXPERIENCE ECONOMY   |   SHARING ECONOMY   |    LIFESTYLE ECONOMY   |   CIRCULAR ECONOMY 

Impacting Innovation. ProsumerIndex.com is an independent research site focused on identifying and following innovative prosumer-driven thematic trends that are driving the new economies and impacting global markets. This article is for informational purposes only and to provide general knowledge about Prosumers, related brands and companies. We do not provide investment advice or product recommendations. The information on this site should not be used as a substitute for business, professional financial, legal, accounting or tax guidance.