Firms, Markets, and Platform Ecosystems: Towards a Generativity-based View of Economic Organizing in the 21st Century

The rise of digital platform-enabled ecosystems (DPEs) has sparked renewed interest in economic organizing. Unlike more classic modes of organizing like markets and firms, DPEs make coordination and cooperation possible among innumerable autonomous but interdependent actors to co-create value for an intended end-user group. We propose a novel theoretical framework that advances generativity – i.e., the ability to engender an unforeseen variety of output through innovative contributions from a large and diverse set of actors – as the primary organizing logic employed in DPEs. Applying a generativity perspective, we attempt to better discern and articulate the inner workings of firms, hierarchies, and DPEs in a way that both complements and extends the efficiency-based logic of economic organizing. Additionally, we conduct a comparative generativity as well as a comparative efficiency analysis to explain why, when viewed through the generativity lens, DPEs can be more attractive than hierarchical and market-based forms of economic organizing. The paper bridges dominant thinking of the industrial era with the latest digital era thinking.