Governing Innovation Dynamics in the Internet Ecosystem
Speaker: Dr. Volker Stocker
Abstract: Big tech companies have strongly influenced competition and innovation in the Internet ecosystem. As their infrastructures and services have become more pervasive, they have developed multi-layered cloud-based platform ecosystems, providing highly manageable, extensible, and scalable substrates that support and nurture the development of various innovative (digital) products and services. Regulators worldwide grapple with the rise of these platform ecosystems; cascading actions in the EU (e.g., the DMA & DSA), the U.S. (e.g., the FTC’s more aggressive course, antitrust reviews, etc.), and elsewhere have signaled a widespread consensus about the need for platform regulation.
Despite such regulatory action, our understanding of how these companies shape competition and innovation is incomplete (and potentially based on inappropriate analytical frames). Fundamental questions remain to be explored, e.g.: How do these companies evolve their business strategies and ecosystems? How do cloud-based platform ecosystems and other parts and players of the wider Internet ecosystem interact and co-evolve? Answering these questions is necessary but complex. Researchers have recognized the need for novel theories to appropriately capture the complexity and dynamism of digital platform ecosystems and to meaningfully analyze aspects of competition and innovation.
In this paper, we approach these issues from an information-economic model of digital innovation that captures important characteristics of digital ecosystems. It enables examining the interdependencies among players, potential incentives to abuse their respective position in the ecosystem, and possible mitigating interventions in one consistent framework. To substantiate the framework, we synthesize and extend previous studies that have explored the role of big tech's global private networks for the Internet ecosystem and the theoretical and conceptual underpinnings for understanding digital innovation.
Our paper intends to make three contributions. First, it complements different strands of literature dealing with innovation and digital platforms, thus making a theoretical contribution. Second, it yields a more nuanced understanding of the innovation dynamics shaping the Internet ecosystem and the role of big tech companies. Third, it contributes to the emerging discussion on how innovation in dynamic, adaptive socio-technical systems can be governed effectively.
Volker Stocker is an economist specializing in the digital economy and the Internet ecosystem. He currently serves as the head of the "Digital Economy, Internet Ecosystem, and Internet Policy" Research Group at the Weizenbaum Institute for the Networked Society and holds postdoctoral positions with the INET Group at TU Berlin and as an Associate Researcher at the Max Planck Institute for Informatics in Saarbrücken (Germany).
Dr. Stocker's research interests encompass a wide range of topics, including the economics, evolution, and regulation of digital infrastructures and the Internet ecosystem, broadband and Internet policy, and platform business models. He has gained diverse research experience at renowned institutions such as the University of Pennsylvania, Michigan State University, Northumbria University, and MIT, where he has collaborated with scholars from various disciplines.
With his interdisciplinary expertise and research experience, he aims to investigate the complex challenges of the digital economy and digital transformation.