Classroom Companion: Business

 
Chapter 1 · The Digital Economy

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5
1
Access to the Internet has been proposed as a basic human right, and in 2016, 
the United Nations (UN) released a non-binding resolution condemning inten-
tional disruption to such access by governments (Vincent, 
2016
). It is clear that 
access to the Internet has changed the lives of people and the way businesses oper-
ate and will increasingly do so as the other half of the world’s population gets con-
nected to the Internet.
 
► Facets of the Digital Economy
Three representative examples of digital goods and services are presented to indicate 
the extent of the digital economy. Many more examples are provided throughout this 
book.
Facebook: There are over three billion people worldwide using a social media service 
regularly. Facebook is the most popular of these services, with approximately 2.2 billion 
users. Facebook has had a significant impact on how people communicate and organize 
their social lives. The advertising industry has been dramatically changed because of 
the way social media advertisements can be tailored to match the attitudes and prefer-
ences of the users. Because of the company’s global impact, Facebook founder, Mark 
Zuckerberg, was named “Person of the Year” by Time Magazine in 2010. However, 
Facebook is not without controversies, as witnessed by the Cambridge Analytica data 
scandal in 2018.
Airbnb: Established in 2008, Airbnb has grown to become one of the biggest hos-
pitality services worldwide. As of 2017, Airbnb has over 200 million users and offers 
over three million lodgings in 191 countries. Airbnb enables homeowners to rent out 
property to registered guests and is one of the best examples of the expanding sharing 
economy. Airbnb utilizes the concept of multisided platforms (
7
Chap. 
10
) and the long 
tail (
7
Chap. 
16
) in its business operations. Key enablers for Airbnb’s success are the 
widespread adoption of Internet access, high-speed mobile networks, and smartphones. 
However, Airbnb has been blamed for reducing attractiveness in the neighborhoods in 
which it operates and has met resistance from authorities in, for example, Paris and 
New York.
Bitcoin: Bitcoin (BTC) was established in 2009 by the still-unknown person or orga-
nization Satoshi Nakamoto. It has become the most valuable and well-known crypto-
currency. Bitcoin utilizes the blockchain technology to provide a distributed currency 
without any involved third parties. Bitcoin has the potential to become a true global 
currency. However, recent investigations have revealed several weaknesses with Bitcoin, 
including long transaction times and high energy usage. Other cryptocurrencies, such as 
Litecoin (LTC), Ethereum (ETH), and Ripple (XRP), may overcome these challenges 
and turn out to be the dominant cryptocurrencies of the future—if cryptocurrencies 
have any future at all.
◄
The size of the digital economy is hard to estimate. This is because ICT is an indus-
try on its own (production of telecommunications networks, Internet equipment, 
mobile phones, applications, and software), but also because ICT is integrated into 
almost all other industries. ICT has enabled new business models, more efficient 
production methods, and new ways of interacting with consumers. One example is 
online trading (e-commerce) where people can buy almost any kind of merchan-