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Wednesday, 29 January 2020

The Emergence of Platform-Dependent Entrepreneurs: Power Asymmetries, Risk, and Uncertainty

The increased economic and business significance of digital platforms has attracted an outpouring of studies exploring their power dynamics and general impact. And yet, to date, this research has overlooked the power imbalance that entrepreneurs experience as members of the platform ecosystem, and provided little guidance on how these far more numerous firms should compete.

Event Time
29 Jan 15:30 - 29 Jan 16:30
Event Location
Room 2.07, Alliance Manchester Business School, Booth Street West, Manchester, M15 6PB
Event Type

Please note that refreshments are available prior to the seminar at 15:15.

Abstract

Online digital platforms organize and mediate an ever-increasing share of economic and societal activities. Moreover, the opportunities that platform-mediated markets offer not only attract enormous numbers of entrepreneurs, but also support the growth of entire ecosystems of producers, sellers, and specialized service providers.

The increased economic and business significance of digital platforms has attracted an outpouring of studies exploring their power dynamics and general impact. And yet, to date, this research has overlooked the power imbalance that entrepreneurs experience as members of the platform ecosystem, and provided little guidance on how these far more numerous firms should compete.

Drawing upon Emerson’s power-dependence theory, we show that the power asymmetry at the heart of the relationship between the platform and its ecosystem members is intrinsic to the platform design, the technological architecture and the contractual agreements between the parties. We undertake a conceptual analysis of the sources of this power, and we unravel the novel component of risks that emanate from this imbalance.

Our analysis suggests that the conditions of engagement for platform entrepreneurs are so different from traditional entrepreneurship that these entrepreneurs are more usefully termed “platform-dependent entrepreneurs (PDEs). Further, we explore the strategies that PDEs are developing to mitigate their dependence. Finally, our study provides a framework for policy makers that are considering regulating platform-organized markets.

A photograph of Martin Kenney who is a distinguished Professor or Community and Regional Development at the University of California

 

Martin Kenney is a Distinguished Professor of Community and Regional Development at the University of California, Davis and a Co-Director at the Berkeley Roundtable on the International Economy.

He was the Arthur Andersen Distinguished Visitor at the University of Cambridge and have been a visiting scholar at the Copenhagen Business School, Hitotsubashi, Kobe, Stanford, Tokyo Universities, and UC San Diego. In 2015, he received the University of California Office of the President’s Award for Outstanding Faculty Leadership for Presidential Initiatives in Entrepreneurship and Innovation.

His scholarly interests are in understanding the interplay between technology, academic institutions, finance, and competition in capitalist economies and how these dynamics affect people and places. 

He is a receiving editor at the world’s premier innovation research journal, Research Policy, and edits a Stanford University book series on innovation and technology.  His current research examines the impacts of digital platforms on labour, firms and entrepreneurship.

 

 

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