An Ecological Perspective to Master the Complexities of the Digital Economy

Abstract Economic and social interactions are shifting to the digital space, facilitated by digital platforms. Successful platforms grow into vast ecosystems combining multiple offerings, where diverse users derive value from interactions while ecosystem orchestrators harvest massive revenue. The success of the ecosystem business model stems from their ability to swiftly adapt to fast-changing environments, including new technologies and volatile demands. Adaptation happens through dynamic innovation in a decentralised decision-making setting, which renders digital platform ecosystems complex adaptive systems (CAS). Utilizing extensive knowledge on natural ecosystems as prime examples of a CAS, the paper proposes a systematic framework for understanding and describing digital platform ecosystems, rooted in evolution and ecology. The 5M Framework organizes the complexity of the digital economy into a hierarchy of interconnected elements and processes. As platforms face heightened scrutiny about their socio-economic power and societal value, the framework can facilitate the development of sustainable governance of the digital economy.