Platforms Are the New Organizational Paradigm

Technological innovation often leads to organizational innovation, and organizational innovation often leads to organizational opposition. As new forms of business organizations emerge and become dominant, interest groups and others often resist the change, decrying the new models as fundamentally negative. The reality of economic history is these new business models have been enormously positive. The world would be a vastly poorer place without the rise of the industrial organization, then the multidivisional corporation and now the Internet-based platform. As such, policymakers should be extremely cautious in their efforts to limit this next potential transition. Just as there was opposition to the corporate economy in the early 1900s, there is opposition to the platform economy today. But limiting “platformization” would have considerable long-lasting economic costs for the nation and consumers.