The life-cycle concept in the digital platform economy

Abstract

The life cycle concept is an attempt to conceptualize some of the dynamics associated with new technologies or products that change old markets and create new ones. It allows to make statements about typical patterns that evolve in different life cycle stages of an industry with regard to changing market structures and the related alterations in the conduct and performance of its firm population over time. This paper presents the main versions and core ideas of the life cycle concept. It then discusses how it can be applied to the digital platform economy. It is shown that there is scope for capturing the specificities of platform-mediated industries, but modifications are needed to account for differences in inter-platform vs. intra-platform competition. In particular, further empirical research is necessary in regard to the ongoing digital transformation, given the potential of the ‘Internet of Things’ to disrupt traditional product-based industries.