Digital Platform Economy in Bangladesh: Opportunities and Challenges 1. Introduction Digital platforms have become a quintessential part of the modern economy. They have revolutionised many sectors, including housing, retail and transportation. New types of transactions, such as ride-sharing and home-sharing, as well as new modes of working, such as freelancing, have become possible due to digital platforms. Although the first digital platforms appeared in the mid-1990s, the sector accelerated from the mid­2000s forwards, backed by fast internet speeds and the launch of smartphones(World Economic Forum, 2020). Particularly, after the financial crisis of 2008, companies with the digital platform business model rapidly came to dominate an increasing share of the global economic activity, often by affecting the traditional mode of business. Globally, over 70 million workers are registered with these digital platforms that ease remote working(World Economic Forum, 2020). The digital platform economy has been growing rapidly and has facilitated spending of around USD 126 billion in 2018(World Economic Forum, 2020). Around 0.5 per cent to 2 per cent of the workforce from Organisation for Economic Co-operation and Development(OECD) member countries are involved with these digital platform companies (World Economic Forum, 2020). In the last couple of years, Bangladesh has also seen rapid growth in internet connectivity as well as some supporting measures for digital entrepreneurs(Fintech BD, 2019). However, access to finance is one of the major constraints for digital start-ups. Besides, to promote digital platforms, ease of payment for online transactions is necessary(Fintech BD, 2019). Bangladesh is now the second largest supplier of online labour in the world, with a 16 per cent share of the global online workforce, following India which has a 24 per cent share of the global online workforce (Oxford Internet Institute, 2017). Recently, the number of online workers from Bangladesh has increased in creative and multimedia platforms at the end of 2019(Oxford Internet Institute, 2020). Unfortunately, a universally accepted definition for digital platform economy does not exist. Spagnoletti, et. al. define digital platforms as “building blocks that provide an essential function to a technological system and serves as a foundation upon which complementary products, technologies or services can be developed” (Spagnoletti, Resca,& Lee, 2015). On the other hand, Xu et al. define digital platforms as“a set of subsystems and interfaces that form a common structure from which derivative applications can be developed and distributed”(Xu, Venkatesh, Tam& Hong, 2010). Koh and Fichman take a different approach, and define digital platforms as“two-sided networks that facilitate interactions between distinct but interdependent groups of users, such as buyers and suppliers”(Koh& Fichman, 2014). Pagani advocated that multisided platforms exist wherever a company brings together two or more distinct groups of individuals that need each other in some way, and where the company builds an infrastructure that creates value by reducing distribution, transaction, and search costs incurred when these groups interact with one another(Pagani, 2013). Nevertheless, all digital platforms share a number of common features, such as: i) digital matching of buyers and sellers through the internet, often through algorithms that track past online actions; ii) low entry costs that allow small sellers to easily come to the market and compete with larger sellers; iii) ex-post screening through reviews and ratings of products and services by previous buyers; iv) non-exclusive and short-run contracts allowing workers to work for multiple clients at the same time for relatitvely shorter durations than formal employment; and v) direct transactions of money between buyers and sellers(Fradkin, 2018). These common characteristics may be found in digital platforms that are part of the“sharing economy”, such as ride sharing or home sharing, as well as those that are part of the“on-demand economy”, such as e-commerce websites, food delivery applications and freelancing websites. However, it must be noted that many e-commerce websites represent the online outlets of businesses that also have brick-and-mortar stores. This makes it difficult to draw the line in terms of establishing how much of e-commerce is part of the digital platform economy and how much of it is actually an online version of the real economy. Therefore, Page| 1