Document Type : Research Paper

Authors

• Mehdi Elyasi ¹
• Maghsoud Amiri ²
• Seyed Soroush Ghazinoori ³
• Neda Jomehri ⁴

¹ Associate Professor, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran Corresponding Author: m.Elyasi@atu.ac.ir

² Professor, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

³ Associate Professor at Department of Management and Accounting, Allameh Tabatabai University

⁴ Ph.D. Student, Faculty of Management and Accounting, Allameh Tabataba’i University, Tehran, Iran

Abstract

The current digital revolution has given rise to a new organizational form, the Platform company. Today, the most valuable companies in the world and the first ones with a market value of more than a trillion dollars are platform companies. The Platform Economy is developing at an exponential rate and has become a top priority for governments across the world. The present study aims to provide a framework for evaluating the Digital Platform Economy at the international level. Utilizing a systematic review and meta-synthesis approach, the Platform Economy dimensions are identified as Digital Users, Digital Entrepreneurs, Digital Platforms, Digital Infrastructure, Innovation Capacity, and Institutional Environment and by extracting relevant indicators from international reports, the Platform Economy Composite Index is developed. Using the Partial Least Squares-Path Modelling (PLS-PM) method and specifically the Higher-Order Construct model, the measurement model is validated, and by employing a non-compensatory aggregation method, the Platform Economy Composite Index ranks 128 countries. The study is concluded by scrutinizing Iran’s current status regarding the enabling factors of the platform economy and identifying its strengths and weaknesses and providing recommendations for improvement. The results indicate that although Iran’s current status in terms of demand-side enablers is relatively good, it faces serious issues in terms of supply-side enablers.

Introduction

The emergence and proliferation of the application of big data, cloud computing and new algorithms have led to the formation of a platform economy built around platform companies. This new generation of digital businesses has disrupted several industries and often are startups that have become new market leaders (Acs et al., 2021).Companies like Apple, Microsoft, Google, Amazon, and Meta are examples of such businesses. The market value of these five companies was close to 9 trillion dollars in December 2021 (Companiesmarketcap, 2021), equivalent to 9.5% of the global GDP (O'Neill, 2021).
The immense value creation power of the platform economy has made its the key to inclusive economic growth for both advanced and developing economies, and a catalyst for economic and social leapfrogging opportunities in developing countries (Chakravorti et al., 2019). However, platform economy literature has neglected the assessment of the national factors that have given rise to the platforms and therefore, it is necessary to identify the national factors that enable the emergence and growth of digital platforms (Hermes et al., 2020).
However, a review of the research literature indicates that the evaluation of platform economy at the national level has not made much progress and the few studies that have attempted this (Chakravorti et al., 2019; Morvan et al., 2016), have been primarily focused on the developed countries and therefore are more compatible with the conditions of these countries. Consequently, policymakers in developing countries, despite having different conditions, must refer to the experiences of developed countries for the development of platform economy policies. Since there is a limited understanding of the effectiveness of such policies on enhancing the efficiency of the platform economy, this approach can be challenging (Szerb et al., 2022).
Against this background, this study aims to develop a comprehensive framework for evaluating the platform economy of countries at different levels of development. Utilizing a systematic review and meta-synthesis approach, the enabling dimensions of the platform economy are identified as Digital Users, Digital Entrepreneurs, Digital Platforms, Digital Infrastructure, Innovation Capacity, and Institutional Environment. Based on this framework and by extracting relevant indicators from international reports, the Platform Economy Composite Index is constructed. The study concludes by closely examining Iran's current situation in terms of the enabling factors of the platform economy. It identifies the country's strengths and weaknesses and offers recommendations for improvement.

Research Question(s)

The main question of this research is defined as follows:
What are the dimensions and components of a comprehensive framework for evaluating the platform economy and how can a composite index be developed using this framework?

Literature Review

Digital platforms serve as intermediaries that facilitate interactions and exchange of values between at least two different and interdependent user groups in platform ecosystems (Drewel et al., 2021).
There is no consensus on the definition of the platform economy, and different terms such as Sharing Economy, Collaborative Economy, Access Economy, and Gig Economy have been used to refer to this phenomenon in academic and policy research (Riso, 2019). However, the term Platform Economy has gained more prevalence due to its more inclusive connotations. Kenney and Zysman (2016) consider the term Platform Economy a “more neutral term as they believe it encompasses a growing number of digitally enabled activities in business, politics, and social interaction”. Here, the platform economy is defined as a value creation system consisting of platforms and platform ecosystems (Dufva et al., 2017).
A review of the research literature indicates that the evaluation of platform economy at the national level has not made much progress (Szerb et al., 2022), and the few studies that have evaluated the platform economy at the national level, have been primarily focused on developed economies e.g., Morvan et al. (2016) developed Platform Readiness Index to evaluate readiness level of 16 countries of G20 countries in the development of platforms. Furthermore, to the best of our knowledge there is no systematic review focused on the identification of platform economy enablers at the national level. Therefore, utilizing a systematic review and meta-synthesis approach, this study aims to develop a comprehensive framework for evaluating the platform economy of countries at different levels of development.

Methodology

The main steps for developing a composite index include developing a conceptual framework, selecting individual indicators, imputation of missing data, multivariate analysis, normalization, aggregation, and composite index validation (OECD, 2008).
The first step of constructing a composite index is the development of a conceptual framework that encompasses the dimensions and components of the phenomenon being measured. To this end, based on a meta-synthesis approach, a systematic review was conducted. The meta-synthesis approach was implemented using the Noblit and Hare (1988) seven-step method: 1. getting started; 2. deciding what is relevant; 3. reading the studies; 4. determining how the studies are related; 5. translating the studies into one another; 6. synthesizing translations; 7. expressing the synthesis. This resulted in the extraction of 6 dimensions and 16 components as platform economy enablers which are presented in the proposed conceptual framework for the platform economy evaluation.
Based on this framework and by extracting relevant indicators from international reports, the Platform Economy Composite Index is constructed. Using the Partial Least Squares-Path Modelling (PLS-PM) method and specifically the Higher-Order Construct model, the measurement model is validated, and by employing a non-compensatory aggregation method, the Platform Economy Composite Index ranks 128 countries.

Conclusion

This study attempted to develop a comprehensive framework for evaluating the efficiency of the platform economy of countries at different levels of development. Using a systematic review and meta-synthesis approach, Digital Users, Digital Entrepreneurs, Digital Platforms, Digital Infrastructure, Innovation Capacity, and Institutional Environment were identified as the evaluating dimensions of the platform economy.
Furthermore, Iran's current situation in terms of the enabling factors of the platform economy was closely examined and country's strengths and weaknesses were identified. The results from the Platform Economy Composite Index indicate that while Iran is in a relatively good position regarding demand-side enablers, it is facing significant challenges with supply-side enablers.
Keywords: Digital Platform, Platform Economy, Composite Index, International Ranking.
 

Keywords

• Digital Platform
• Platform Economy
• Composite Index
• International Ranking

Main Subjects

• Management approaches in the field of smart