Themed article
All illustrations by Mohamed Hassan
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Sunil Tankha is Assistant Professor of States, Societies and World
The Platform Economy
Development
Economic intermediation is moving online. This means that the acts of purchase and distribution of goods are shifting from the physical to the digital. Obvious examples are online purchasing of goods, where retail experience and logistics are moved to platforms, while the products themselves remain physical and must be physically delivered. In some cases where the goods are intellectual, music and literature for example, the physicality of the transaction embodied in compact discs and books is also completely digitized. The platform economy now adds up to around US$ 7 trillion, or around twice Germany’s GDP.
T
his phenomenon raises three broad questions: What are the economic dynamics behind these trends? What are the distributions of winners and losers from these trends? What are the new challenges for policy making raised by these trends?
Economic dynamics The superficial and textbook economic dynamics underlying the platform economy are relatively simple. These platforms are able to create a
