Title
Value creation and extraction in the platform economy: a comparative approach: historical background paper WP9-D9.1
Author
Ryan-Collins, J.
Dhondt, S.
Ghirlanda, P.
Kirov, V.
Mazzucato, M.
Strauss, I.
Publication year
2022
Abstract
Major digital platforms play an increasingly important role in determining the trajectory of modern economies, innovation and employment dynamics. We examine how leading digital platforms based in the U.S. and Europe create and extract value in entrepreneurial ecosystems in the European Union. Whilst there are important differences between the major platform companies’ business strategies, we find convergence towards a model of ‘digital rentiership’. This involves a strategy of aggressive Mergers and Acquisitions to reduce competition, large R&D expenditures to support the development of algorithms that enable more rapid user growth and monetization of user data and attention and a ‘financialised’ corporate governance model focused on maximising short-term returns to shareholders. Using SCOPUS data, we then analyse large digital platforms’ co-publications with European universities, research institutes and non-financial firms. Again, we find evidence that the US Big Tech firms may be extracting more value than they are creating. Finally, we consider cooperative platforms as an alternative business model and consider the advantages and challenges these models face. The final section considers potential policy interventions to address the challenge of digital rentiership and support alternative models of corporate governance for digital platforms.
Subject
Platforms
Knowledge
Creation
European Union
Digital
To reference this document use:
http://resolver.tudelft.nl/uuid:b0350926-923f-4e5a-a037-897416969e49
TNO identifier
982740
Publisher
European Commission, Leiden
Bibliographical note
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 822296.
Document type
report