The platform business model is prevalent among the largest global companies such as Apple, Amazon, Alibaba, Facebook, Tencent with platform companies accounting for trillions of dollars in market cap and a sizeable part of market cap increases among the largest companies in the world. The use of platforms as a models is increasingly employed at the country level and across regions as new formats are explored to build new networks and alliances.
The economics of the operation of a platform is largely rooted in the network effects as well as positive network externalities. Network effects involve increases in the value of services emanating from the rise in the number of users/customers/members. This in turn incentivises new entrants/participants to join the network to benefit from the rising optionality and access to services and members. The optionality in the range of services is advanced via the formation of a diversified ecosystem that also seeks to mutually reinforce the various segments of the network’s operation.
We believe that such platform effects may be observed not only at the corporate level, but may also be replicated and pursued as a strategy at the country level as well as with respect to regional integration projects. Across the main regions of the global economy we see the Asia Pacific region as one of the prototypes of a platform for integration projects, which is increasingly exhibiting the features of the network effects of an alliance that is cumulatively expanding its network of economic accords.
This report seeks to explore the emergence of platforms in the corporate world and the prospects of the formation of platform alliances across countries and regions.