October 17, 2016
Research released by Accenture reveals that despite the potential for small and traditional businesses to become successful digital platform companies, as few as 10% of new start-ups focused on digital platform business models will become profitable independent entities in the coming years.
The analysis also reveals that China, India and the U.S. will dominate the platform economy by 2020, and that the gulf between countries will increase. To help bridge this gap, the report outlines five critical steps businesses and governments can take to succeed.
Accenture’s report Five Ways to Win with Digital Platforms, published in collaboration with the G20 Young Entrepreneurs’ Alliance, assesses the ability of 16 G20 economies to support the flourishing of digital platforms. It shows that the UK and Germany join China, India and the U.S. at the top of the Accenture Platform Readiness Index but other emerging markets and European economies are predicted to lag behind, lacking sufficient business and socio-economic enabling conditions.
“When you think of digital platforms, think of China and India as much as the U.S. These economies are using the power of platforms to create large scale markets very rapidly,” said Paul Daugherty, chief technology officer at Accenture. “Many European economies are in danger of missing out in the platform economy. Multi-stakeholder cooperation is required to address the fragmented digital markets and to support the greater levels of digital enterprise and consumption that successful platform businesses need.”
Accenture’s analysis shows $20 billion was invested in digital platforms between 2010 and 2015 in 1,053 publicly announced deals. More than half of this investment took place between 2014 and 2015. It also shows that rankings on the Platform Readiness Index strongly correlate to the levels of digital platform activity and investment in G20 countries.
Further coverage will appear in the next issue of Connections+.