Digital Economy

1
Digital Economy

• Topic 2

2
Economy

• Economy -Way in which a country makes money
• Financial state of a country

3
Traditional Economy

• For the last 200 years there are three factors of
  production land, labour and capital
• Economic activities agriculture and
  manufacturing

4
New Economy

• IT has brought a fundamental change to the
  societys economy
• Knowledge and innovation become another factors
  of production in new era.
• New economy - substitution of high speed
  communication for traditional brick and mortar
  and face to face transaction
• Service industry is expanding dramatically
• While manufacturing sector continues to shrink

5
New Economy

• Factors such as mobility, distance, location and
  geographic boundaries are no longer barriers to
  business
• Transformation of IT in all economic sectors, the
  globalization of market, new rules of
  entrepreneurship, high level of business risk and
  emerging of new economic sectors to occupational
  needs are the factors of transition from an
  industrial-based-economy to knowledge-based
  economy

6
Digital Economy

• What is digital economy?
• The economy that focuses on goods and services
  whose developments, productions, sales, or
  provision is critically dependent upon digital
  technology
• Kling, Rob (1999) IT and Organizational Change in
  Digital Economies A socio-technical approach.

7
Digital Economy

• What is digital economy? (cont)
• Is based on ICT infrastructure to allow new
  opportunity and challenges for business and
  government
• Is a common market place where consumer and
  business can benefit from good value product and
  services, where suppliers can market and
  distribute their product more efficiently

8
Digital Economy

• What is digital economy? (cont)
• Is the use of information to interact and
  communicate in globalize high technology economy
• Transformational impact which ICTs are having
  on every single aspect of business activity
• Changing the nature of individual businesses, of
  market and of entire economies

9
Digital Economy

• 4 subsectors of a digital economy
• Highly digital goods and services
• Interbank fund transfer and electronic journals
• Mixed digital goods and services
• Online music, books, and flowers
• IT-intensive services or goods production
• Complex engineering designs and data-intensive
  market research
• Supporting goods and services
• The part of the IT industry that support these
  three segments of the digital economy

10
Components of Digital Economics

• Digital products
• The consumers
• The sellers
• The infrastructure companies
• The intermediaries
• The support services
• Content creators

11
Why must the ICTs being use?

• In 90s
• -The use of Internet has become popular and
  benefit all the users
• By the end of 1997,
• gt100 million users worldwide
• Everyday in 1998, 80,000 new users coming on-line
• e.g ) E-Commerce fast, cut cost, global market

12
Digital-Economy

• The impact of D-Economy
• a) Direct link between consumers and suppliers
• b) New form of intermediary will emerge
• c) The value of brands will be greatly enhanced
• d) Business to business trade

13
Electronic Commerce, opportunity or threat?

• Opportunities
• Expands the marketplace to national and
  international markets
• Locate more customers, best suppliers, and
  suitable business partners
• Eliminate cost associated with paper-based
  information
• Increased flexibility and productivity
• Expediting customer access to information
• etc

14

• Threat
• if the business cannot bring itself to see this
  technology as an opportunity, it must see it as a
  threat.

15
Key factors drive towards digital economy

• The Government identified that there are 3 areas
  need to be excel to achieve leadership in the
  digital economy
• consumers who provide strong and sophisticated
  demand for digital products and services
• IT, electronics and communications supply sectors
  which are innovative, dynamic and growing
• a market framework which both empowers consumers
  and encourages competition and innovation from
  the industries which serve them

16
Factors of the Digital Economy
17
Drivers of demand in the digital economy

• A culture which understands and accepts digital
  technologies
• Pricing
• User skill levels
• Infrastructure
• The macro economy

18
Drivers of supply in the digital economy

• Competitiveness of supply industry
• Willingness and ability to invest
• Access to skilled workforce

19
Differences between D-Economy and Traditional
economy

• In digital economy
• Knowledge and information can be shared
• Location is diminished
• Using appropriate technology and method, Virtual
  market place, organization, anytime and global
  reach
• Law, barrier and taxes are difficult to apply
• Pricing and value depends on context
• Same information knowledge can have different
  value to different people at different times
• Utilization of Human capital/resources
  competencies
• Knowledge worker