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Intensifying concerns about online platform firms’ rapid rise, expansion, and growing asymmetric power have attracted political scrutiny and undermined the legitimacy of a minimalist regulatory regime that is giving way to intense debate and increasingly interventionist governmental policies and enforcement actions. First, we view the rise of, and recent political responses to, the often-predatory power and manipulative conduct of platform firm in terms of a ‘Polanyian’ double movement in which the destabilising and destructive effects of unchecked corporate activities and market development eventually generates political and regulatory responses to constrain private power that threaten the social, political, and economic order. Second, incipient legal changes, most notably the EU’s proposed Digital Markets Act and Digital Services Act, indicate a shift in regulatory emphasis from competition (and antitrust) policy and law towards more intensive and encompassing forms of socio-economic regulation. Finally, these regulatory changes will likely vary in character and significance across political jurisdictions, and embody distinctive and possibly divergent developmental trajectories. The EU may have a first-mover advantage in regulating platform firms, but we are only at the very beginning of a protracted and conflictual transformational process.

Though economists have examined labor displacement due to digitization, few have considered the new work and value created. Unlike employment relations that brought workers together on the assembly line or in an office in a previous era, platforms enable a greater, more dispersed, and complex division of labor. New and reconfigured types of labor enabled by platforms create identification and measurement challenges. Previous studies of platforms invariably focused on specific organizational forms such as sharing or gigs. They built taxonomies based on the platform's organization - few considered the scope and scale of platform-enabled value creation. To better understand changing labor arrangements in the 21st century, this article introduces a taxonomy to systematically understand work, employment, and value creation in the platform economy. We consider all of the platform-enabled value creation activities including old work displaced or reorganized to new work created. We provide suggestive evidence for the utility of our framework through case studies of Etsy and Amazon Self-Publishing in the United States.

This essay examines the implications of the evolving environment for the formation and financing of new firms in the United States. After the dot.com crash of 2000, there was a regime change in new firm formation and the number of firms that exited through an initial public stock offering. This change was made possible by the decreased cost, increased speed, and ease of market entry due to availability of open source software, digital platforms, and cloud computing. This facilitated a proliferation of startups seeking to disrupt incumbent firms in a wide variety of business sectors. The contemporaneous growth in the number and size of private funding sources has resulted in a situation within which new firms can afford to run massive losses for long periods in an effort to dislodge incumbents or attempt to triumph over other lavishly funded startups. This has triggered remarkable turmoil in many formerly stable industrial sectors, as the new entrants fueled by capital investments undercut incumbents on price and service. The ultimate result is that new entrants with access to massive amounts of capital can survive losses for a sufficiently long period to displace existing firms and, thereby, transform earlier industrial ecosystems.

Green industrial policy builds support for carbon regulation

The rise of the digital economy reignites debates over the transformation of production in industrial economies. For several decades, analysts attempted to describe the central features of the next economic epoch with labels like the knowledge, information, or service economy. The conventional argument claimed that just as an agricultural economy gave way to a manufacturing economy, an industrial economy was giving way to a service economy. Hence, their arguments went, industrial production was of diminishing importance.This essay examines the place of manufacturing in an emerging digital economy. In short, we argue that in order to understand the place of digital innovations in the production process, we require a new nomenclature, one stripped of the grime of the 19th century manufacturing. We will use the word “production,” almost a synonym for manufacturing, meaning the creation and making of a good. The real issues in a digital era with powerful ‘tools for thought’ and diffused “intelligence processing” then are quite basic. First, what creates value? The tools for thought permit not only new products, but also a segmentation of the market into different needs and an adaptation of products to the varied segments. Second, what permits control? Certainly, the formal character of digital information knowledge permitting control of the production and evolution of the product or service would be increasingly held as formal intellectual property rather than individual or organizationally specific know-how.

Driven by two fundamental processes, rapid technological change as well as social innovation and reorganization, a new digital economy, the E-conomy, is emerging. Rather than merely adding an Internet sector to the economy, the E-conomy has brought about tools for thought, tools that transform every sector of the economy by amplifying brainpower the way steam engines amplified muscle power during the Industrial Revolution. For analytic purposes, the rise of the E-conomy can be told as a story composed of 1) networks and tools, 2) e-business and e-society, 3) the productivity dilemma resolved, and 4) governance and politics. In the short run, the transformative processes unleashed by the E-conomy are likely to lead to new bargains among existing coalitions and interest groups. In the long run, the changes underway promise to fundamentally alter the political sociology of vast communities, give rise to new interests and coalitions, and transform the institutional foundation of social, economic and political life.

The success of the Internet in the U.S. fundamentally rests on 30 years of consistent FCC policy which sought to maintain network openness by making key network components available to all, on cost-effective terms, so as to foster competition and innovation. The Internet today enters a third phase of its history, when a critical mass of users are about to experience "always-on" high-speed access to the Internet from their home. At this crucial time, the FCC may abandon its successful policy and allow owners of the broadband infrastructure to foreclose access to the infrastructure they own. This is, we show, precisely the wrong time for such a reversal. While the current debate is forced by AT&T's acquisition of TCI, its proposed acquisition of MediaOne, and the companies' ties to Excite@Home, this particular matter simply forces us to address the more general issue. What should be the terms of access to emerging network infrastructures when competition exists, but reflects "collective dominance" of a few players? We argue that policy inaction places network innovation in jeopardy and threatens the continuation of successful infrastructure re-invention.

There are eras when advancing technology and changing business organizations transform economies and societies. Such episodes do not just amplify productivity in one leading sector. Instead they give all economic sectors powerful new "tools." Today we are living through such a shift in our economic landscape, a shift that warrants a new name: the "E-conomy." Information technologies, data communication and data processing technologies, are tools to manipulate, organize, transmit, and store information in digital form. They are tools for thought that amplify brainpower in the way the technologies of the Industrial Revolution amplified muscle power.The story of the revolution in information technology is at once a story of technology and a story of innovations in business organization and practice. The two stories are yoked together; they pull forward together. The technology story is underpinned, and measured, by the doubling of semiconductor capability and productivity every-eighteen-months –a rate that has carried us from the room-sized vacuum-tube computers to the modern Internet -- and by the complementary surge in the capacity of the communications network to transmit digital information. Changes in business organization and practice are the second driver of this transformation. The E-conomy is as much a story about changes in business organization, market structures, government regulations, and human experience as it is about new technology. While these changes are spreading across industries and countries, they are more difficult to measure. Taken together, the business innovations represent a new business ecology that includes a prominent role for venture capital, the start-up, the spinoff, and new option based ways of compensating skilled workers and entrepreneurs – innovations that have unleashed a tsunami wave of new business and new technology.The E-conomy is generating substantial and unexpected increases in productivity that have motored our recent surge in economic growth and that have enlarged the margin for monetary policy. But the economic transformation is not about soft landings, smooth growth, permanently rising stock prices, government surpluses, and low rates of interest and inflation. It is about structural transformation and developments that carry disruption and change. The policy issues are moving rapidly from the narrowly technical through the narrowly legal into fundamental questions of how to organize our markets and society. Under the best of circumstances the risks of policy making are high.This background briefing on the E-conomy is aimed to provide a context and a structure for policy debate by defining the stakes, the forces, the issues at play, and an agenda – not a choice of outcomes. For the past fifty years, US government policy has played a major role in enabling America to lead in developing information technology--and just as important--in creating the conditions for America to lead in the use of information technology throughout the economy. The American government largely got policy right under three important headings -- headings we use to structure the agenda that follows: 1) Public investment in science and technology and in the technological-age education of people needed to realize the benefits of the E-conomy. Included under this heading is the re-opened question of the role of government and the institutional structures that create the next generations of technology and equip them with launch markets. 2) Rule making for the E-conomy, which extends across such thorny issues as privacy, security, and the definition of new property rights and responsibilities necessary for markets to function effectively in consonance with enduring values and purposes. 3) Flexibility and inclusion: the basic issues of institutional and labor flexibility and fairness.Compounding the policymaking challenge is the fact that the E-conomy is necessarily global. It is a network of networks that crosses borders in a world organized into nation-states. This requires, if not common rules, then harmonization, compatible rules that allow the economic networks to operate as a single large global system.It is a tough agenda.