Innovation in the Digital Economy: The Digital Innovator and the Multi-Sided Platform Business Model
In the digital economy, organizations need a workforce that can innovate with digital technologies and strategies to reinvent their business models. In this presentation, I will review two recent publications that explore the antecedents of individuals' digital innovativeness and how organizations adopt multi-sided platform (MSP) business models.
The first study examines the role of individual factors in the future workforce's ability to innovate with digital technologies. Survey data from 251 business students enrolled in experiential technology courses offer a strong link between self-efficacy and digital innovativeness, but not between digital innovativeness and other factors frequently emphasized in business education. The study relates the findings to the model of experiential learning.
The second study identifies strategies incumbent organizations can follow to innovate their business model relying on a multi-sided digital platform. Digital platform business models increasingly mediate socioeconomic activity. They generate substantial revenue growth and benefit from direct and indirect network effects, quick scaling, and accelerated innovation. Yet, a small percentage of traditional companies have a digital platform strategy or an active digital platform. The study characterizes the MSP business model, its competitive strengths, and externalities; reviews the literature on business model innovation; and presents a taxonomy of five strategies organizations can apply to transform their business models by creating or acquiring an MSP. The classification of 20 multi-sided platforms adopted by 18 organizations, five short case studies, and an interview with an executive who guided McGraw Hill through the launching of an MSP confirm the findings.