The Platform Economy Matures: Measuring Pervasiveness and Exploring Power

Abstract

Online platforms are pervasive and powerful in today's economy. We explore the increased centrality of platforms in two ways. First, we measure the extent to which platforms are insinuating themselves into the economy. We accomplish this by analyzing the presence of platforms as intermediating organizations across all US service industries at the six-digit North American Industry Classification System (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 undertake a detailed firm-level case study of the mega-platform, Amazon, that demonstrates the ways that the aforementioned macro-level data is expressed by a single platform firm. This case study shows that Amazon’s growth trajectory has resulted in it entering and transforming existing industries and sectors. We conclude by reflecting upon the limitations and implications for future research.

Keywords: Platform Economy, Industrial Organization, Amazon, Digitization, Power, Technology, Governance

JEL Classification: J0, O1, O3