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About the project
IIPP is exploring how and why a large part of the value created within the society is extracted in the form of rent payments. These include the financial, insurance and real estate sector (FIRE sector) but also non-financial firms who are becoming increasingly adept at extracting value from citizens, gaming regulations, and engaging in rent-seeking motivated lobbying.
The enormous growth of digital technology firms such as Amazon, Google, Facebook, and Apple in recent years is at least in part based on network and scale advantages that create monopolistic positions across vast sectors of the economy that enables rent extraction.
Data, code and algorithms are not neutral. Firms that control popular algorithms have power over consumers but can also influence competition within industries. Big Tech firms ‘sell’ certain algorithmic benefits to companies that operate within their platforms. For most firms operating within such platforms, paying such fees is necessary to remain competitive as the platforms themselves sell competitive products.
However, this does not mean that what technology companies are doing today is inherently bad, however, questions arise when business models begin to rest upon the manipulation and selling of personal data that has been freeing and often unknowingly given up in exchange for a digital service.
In this project, generously funded by the Omidyar Network, IIPP will look at how algorithms can enhance rent extraction, and what new types of governance structures are needed to tackle this phenomenon.
Pubilcations
- Publication highlights
- Mazzucato, M., Entsminger, J., & Kattel, R. (2020). Public Value and Platform Governance. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP2020-11). Available at: https://www.ucl.ac.uk/bartlett/public-purpose/publications/2020/sep/public-value-and-platform-governance
- Mazzucato, M., Ryan-Collins, J. and Gouzoulis, G. (2020). Theorising and Mapping Modern Economic Rents. UCL Institute for Innovation and Public Purpose, Working Paper Series (IIPP WP2020-13). Available at: https://www.ucl.ac.uk/bartlett/public-purpose/wp2020-1
Lazonick, W., Mazzucato, M., & Tulum, Ö. (2013). Apple's changing business model: What should the world's richest company do with all those profits? Accounting Forum 37 (4), 249-267.
- Media
- Tim O’Reilly (2019) “Wrong tools for big tech”, Quartz
- Tim O’Reilly (2019) “Problems with Silicon Valley business model”, Quartz
- Mariana Mazzucato (2019) “Digital Feudalism”, Project Syndicate
- Mariana Mazzucato, Rainer Kattel, Tim O’Reilly, and Josh Entsminger (2021) “Reimagining the Platform Economy”, Project Syndicate
Partners
This project is supported by the Omidyar Network.