Friends or Foes?

Mapping the interactions between platform co-ops and incumbent organizations in digital ecosystems

Platform cooperatives have the potential to propel and drive fairer and more sustainable digital transitions, by advancing alternative practices for the governance of digital platforms and data-driven services. To fully harness the transformative potential of these practices, platform cooperatives necessarily need to engage with the vast plethora of incumbent players currently shaping the digital transformation of our economy and society. At the local level, these actors include the users of digital platforms, as well as those individuals and organizations enabling their development and diffusion, such as software developers, universities, and innovation incubators. At the supra-local level, platform coops are exposed to the competition of big tech corporations as well as subject to the decisions adopted by a wide array of governmental institutions, such as national agencies promoting digital transitions, supranational regulators overseeing digital markets, and international institutions in charge of setting standards and rules for the design and governance of digital technologies.

Navigating through this complex set of stakeholders can prove challenging for platform cooperatives, even more so when they rely on limited resources and staff. Some valuable guidance on this matter can be, however, found in a piece of research that I recently published open access in Technological Forecasting and Social Change. The article, titled “Friends or enemies? Unraveling niche-regime interactions in grassroots digital innovations” is the result of a collaboration between academics from Edinburgh Napier University, Sheffield University, and Open University. 

Drawing on the literature about socio-technical transitions, my co-authors and I explored how different digital innovations developed from the grassroots, such as platform and data cooperatives, interact with public administrations, trade associations, universities, and other incumbent organizations operating in the digital ecosystem at different geographic levels. To support our analysis, we conducted interviews with 36 experts, including many founders, volunteers and promoters of platform cooperatives, from 12 European countries (Belgium, Croatia, France, Germany, Ireland, Italy, the Netherlands, North Macedonia, Poland, Spain, Switzerland, and the United Kingdom) and eight sectors (creative industries, CivTech, education, food, healthcare, mobility, information technology, and tourism). 

Platform co-ops and incumbent organizations: five types of interactions

The interviews investigated how grassroots digital initiatives interact with incumbent organizations throughout the different stages of their development, from their launch to their scaling up. The data analysis led us to identify five alternative types of interactions: inertia, indirect support, direct support, active collaboration, and antagonism.

Inertia 

Inertia describes the attitude of those incumbents who are indifferent to platform cooperatives and, therefore, do not take any action in support or against them. This attitude can be explained by two factors: a lack of awareness of the potential of platform coops and a more general resistance to innovation among long-standing organizations. For example, some interviewees noted that traditional cooperatives are often reluctant to integrate digital technologies in their activities and this also deters their engagement with platform cooperatives. Conversely, the inertia observed among IT professionals and software developers was described by our participants as a consequence of their limited familiarity with cooperative governance models, due to the fact that cooperative organizations have little visibility in mainstream media or academic curricula.

Indirect support 

Indirect support is another type of interaction characterized by the absence of direct engagement between incumbents and platform cooperatives. Yet the latter still benefit from measures and actions undertaken by the former. An example is the incentives adopted by public administrations to sustain the development of digital innovations during the COVID-19 crisis, which also nurtured the launch of grassroots digital innovations across Europe. Another form of indirect support is linked to the presence of long-standing cooperative organizations, whose reputation and know-how also indirectly favor the development of platform co-ops.

Direct support

But our data showed that some incumbents have taken a step further to directly promote platform coops through a variety of interventions and actions. Funding is the most obvious form of direct support that mainstream organizations can provide to grassroots innovators: across Europe, platform coops have, indeed, benefited from ad-hoc incubation programs run by regional development agencies or national associations of cooperative organizations. 

Furthermore, our research highlighted the importance for these initiatives to obtain the political support of regulators and other public decision-makers: often mentioned examples include the endorsement of platform coops from the International Labor Organization and the decision of some national data protection authorities to ban the services of big tech corporations from public schools. Municipal administrations can also boost the political legitimacy of platform coops by inviting them to join policy taskforces working on key societal challenges, such as sustainable mobility and sustainable tourism.

Additional forms of direct support that can be provided locally or nationally include the adoption of platform coops’ services and the promotion of their activities among local communities. Interviewees mentioned several cases of local administrations and businesses using the services of platform coops instead of developing their own digital applications. Local trade associations and national cooperative movements have been discussed, instead, as the most proactive in raising awareness on platform cooperatives, through their social media, newsletters, and events. This promotional support is of vital importance to attract both users and volunteers, crucially contributing to the sustainability and scalability of community-led platforms.

Active collaboration

From our sample, it also emerged that the involvement of mainstream actors can go beyond these forms of external support. In some industries, such as sustainable mobility, incumbents have been actively involved in the foundation of platform coops or have worked with them to co-design their innovative services. Universities and other research institutions are quite inclined to collaborate with grassroots organizations for the launch or piloting of their digital innovations. Some platform coops have also formed successful partnerships with local businesses and municipal administrations, to co-design place-based technological solutions and expand their services to new locations or groups of users. For instance, across Europe, platform coops for short and sustainable food supply chains are working closely with trade associations, non-profit organizations, and local authorities to build resilient and capillary systems supporting their logistics and operations.

Antagonism

Nonetheless, our data revealed that the relationships of platform cooperatives with businesses or public authorities are far from being always idyllic and constructive. Some interviewees reported tensions and conflicts between their organizations and incumbent companies, especially in the ICT sector, where big tech corporations can, indeed, leverage their market power to stifle the growth of grassroots competitors. Similarly hostile attitudes were equally noticed among some financial investors or supralocal regulators, refusing to endorse platform cooperatives and embrace their transformative governance model.

A friend or foe… is not forever!

It must be emphasized that these five types of interactions do not capture a static condition; rather they describe a range of possibilities and should be intended as dynamic configurations. In fact, our analysis clearly showed that the attitude of incumbents towards platform cooperatives can change significantly over time:

• Through the direct experience of our participants, we learned that some institutions have moved from an initial state of inertia to actively collaborate with platform coops, as soon as they became aware of their potential. 
• Likewise, other actors, first opposing the development of these initiatives, have later offered direct support to them, having recognized the value generated by grassroots innovations in the context of digital transitions. 

The most radical shifts were observed, in particular, among national and EU-level policymakers, who have gradually become more supportive of platform cooperatives, despite initially showing an indifferent or even hostile attitude.

On a less positive note, though, our participants have also reported cases in which mainstream stakeholders have withdrawn their initial support and adopted, over time, a less favorable attitude towards platform cooperatives. These changes can mostly be attributed to variations in the political climates and societal contexts in which grassroots innovation is being developed.

What can platform cooperatives learn from our findings?

Undoubtedly mapping the potential interactions between grassroots and mainstream actors in the digital economy helps the former to better strategize and get prepared for the diverse reactions that their development can trigger among incumbent organizations. The promoters and volunteers sustaining these initiatives should work closely to make sure that as many incumbents as possible, across different geographical levels, are aware of the value and potential of platform cooperatives. 

Recognizing that different forms of direct and indirect support exist also contributes to refining how platform cooperatives manage their relationships with different stakeholders, in addition to signposting alternative ways to gain the consensus of public administrations and other key actors. As the endorsement of incumbent organizations is likely to vary over time, founders and volunteers of platform coops should put in place ad hoc measures to monitor and reflect on their interactions with external stakeholders.

This research has also shown that the reactions of local and supralocal incumbents are not necessarily aligned or converging, and this is something that platform coops should take advantage of. 

• For instance, they could find an ally in local administrations or international regulators opposing techno-centric, top-down approaches typically endorsed by national governments in their plans for digital transformation.
  

• Alternatively, they could also cooperate with national agencies and international organizations to favor the coordination of grassroots efforts across diverse locations and reach scale in the development of technological solutions alternative to those offered by big tech corporations.

Mapping key stakeholders at different geographic levels, monitoring existing and potential partnerships, and cooperating with other grassroots organizations are ultimately the key strategic lessons that our paper offers to platform co-ops. Or, in other words, our research confirms the old adage: keep your friends close and your enemies even closer!

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