A new report, The Rise of the Platform Enterprise: A Global Survey, presents the results of a year-long research project in which leading scholars and experts from Africa, China, Europe, India and the U.S. collaborated to develop the first global dataset of platform companies.
Through highly efficient matching of different users and/or harnessing large ecosystems of complementary technologies products or services, companies with platform business models have grown dramatically in size and scale over the past decade. The research identified 176 platform companies worldwide with a market valuation of US$1 billion or more. Some platforms are household names such as Amazon, Apple, Google, Facebook and Alibaba. Others have emerged more recently or hail from parts of the world that get less attention in the Western tech and business press, such as Rakuten (Japan), Delivery Hero (Germany), Naspers (South Africa), Flipkart (India) or Javago (Nigeria).
The report highlights several takeaways about the remarkable growth and scale of platform companies:
Platform companies have become an important economic force, providing a growing range of “platform services” such as internet search, social media, e-commerce, mobile payment, media, travel, transportation, food delivery, connected health and real estate/accommodations.
Platform companies are emerging as important engines of innovation. They are increasingly at the cutting edge of rapid worldwide digital transformation.
Platform companies have a growing global presence and are found not only in the advanced industrial countries, but increasingly in emerging and frontier markets around the world.
There is significant variation in platform company formation and size across geographies. North America and Asia are home to a large and diverse group of platform companies; Europe is significantly lagging behind.
Top urban hubs for platform formation and operations include San Francisco Bay Area, Beijing, London, New York and New Delhi.
Platform business models come in different types including transaction, innovation, integrated and investment platforms. While the survey found that transaction platforms are largest in number, integrated platforms have the highest market valuations.
Creating and growing platform companies generates new management challenges and opportunities associated with different firm structures (generally asset light). The value these companies create is typically generated outside the traditional boundaries of the firm.
Although not a direct focus of the survey, the authors note the growing interest and attention that non-platform incumbent firms have made in building platforms.
Platform companies create new regulatory challenges across a wide spectrum of issue areas including tax policy, competition policy, data residency, privacy, insurance, finance and employment. The global platform survey project benefited tremendously from the contribution of leading scholars and experts on platform companies. In addition to Annabelle Gawer (University of Surrey) the project drew from the wisdom and counsel of Weiru Chen at CEBIS, Sangeet Paul Choudary (Platform Thinking Labs), Olayinka David-West (Lagos Business School), Geoffrey Parker (Tulane and MIT), Joseph Yu (Independent), and Marshall Van Alstyne (BU and MIT).