Take away most of the automobiles and trucks on our interstate highways and our highways would have little traffic. Take away digital platforms and we would have an Internet system with significantly less traffic. But no one is taking away digital platforms. To the contrary, they’re growing at a rapid pace and impacting the global economy significantly.
The postsecondary sector, including community colleges, is in platform-building mode too. In the midst of this building frenzy, asking some questions seems in order:
- Is the coverage in postsecondary platforms primarily in IT-related education/training and if so, what additional breadth is needed by industry sector, level of education (basic, intermediate, advanced), and degree versus non-degree)?
- How are platforms funded (e.g., grants, private investments, advertising, membership fees) and what does that say about the potential for sustainability?
- Are platforms reporting use statistics and credential completion data for their users? Are low-income learners being served as many platform missions specify they’re aiming to serve?
- Do current platforms include community college programming (courses, programs, services)?
- Are the platforms competing or partnering? For example, are there links to other sites to help students, college advisors, or employers in their search if they don’t find what they’re looking for?
- Will we see future mergers, platforms disappearing, and/or new platforms joining the field?
According to a primer issued in 2018 by the Information Technology and Innovation Foundation (ITIF), “digital platforms are online businesses that facilitate commercial interactions between at least two groups — suppliers and consumers.” Examples are Amazon, Facebook, Google, TaskRabbit, and Uber.
ITIF reminds us that platforms are not really new. “Shopping malls, job placement services, and newspaper classified ads have long been part of the economy. There is a well-established literature on the nature and role of these platforms, with the consensus … they offer both sellers and buyers tremendous benefits, largely by reducing the transaction costs of finding other parties to interact with.”
What’s notable is the rapid growth of digital platforms over the last decade. This has been spurred primarily by four drivers — growth in the Internet, online advertising industry, cloud computing, and smart phone ownership.
Does this mean there are (or will be) countless “digital platform flowers” growing? Probably not — because of a concept called ”concentration.”
ITIF explains that ‘The dynamic nature of tech innovation exposes platforms to competitive pressure. They are forced to innovate constantly . . . This flurry of activity pushes platforms toward concentration, not because these businesses are more prone to collude or because competition is less intense — but because the value of their services increases as the size of their network grows. The market contains a built-in tendency for concentration. The reason there’s one major social networking platform (Facebook), one major professional networking platform (LinkedIn), and one major micro-blogging platform (Twitter) is because consumers benefit greatly from the network effects involved, as they do not have to post twice to share information with their personal networks.’
If this concept is correct, we should expect mergers among the education platforms in the marketplace ─ perhaps the new 2U and edX merger is the latest example.
There are five other important takeaways from ITIF’s primer:
- We should not minimize or underestimate the impact of platforms because they enable much of the digital economy. ITIF estimates that ‘globally, platform companies have a combined market capitalization of $2.6 trillion, and wide-ranging impact on businesses, workers, and consumers. In the workforce arena especially, online talent platforms including online services that match job seekers with employers such as Monster.com and LinkedIn, and digital marketplaces for services such as Uber and Upwork could add $2.7 trillion to the global economy by 2025.’
- Platforms make it easier to put underutilized assets to work.
- Platforms enable the gig economy, making it possible to hire temporary workers for specific tasks.
- They create a more global labor market by keeping virtual teams connected.
- Platforms will grow as they harness more data — to better match users on different sides of a market, reduce transaction costs, and enable more personalized services.