Classroom Companion: Business

1.4 
 Digital Economics
Digital economics is the branch of economics studying digital goods and services. 
Hereafter, the term “digital goods” is used when collectively referring to both “dig-
ital goods and services.” This is because there is seldom a need to make the distinc-
tion between “digital goods” and “digital services.” The full term is used when this 
distinction is necessary.
Digital goods comprise everything that is digital: data produced by users, digi-
tal applications and services provided over the Internet, and the storage and pro-
cessing of such data. A digital good can be:
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Any kind of software
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Any type of file stored digitally
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A smartphone app and associated services
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Any type of digital information
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Content of a website
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Any communication session
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Any application supported by the Internet
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Trade and bank transactions
1.4 · Digital Economics

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► Automation
Automation is the use of technology to execute a process without human intervention. 
Information and communication technologies provide significant opportunities for auto-
mation, primarily due to the massive increase in computation, storage capacities, and 
communication bandwidth. This has further led to many digital innovations such as cloud 
computing, machine learning, big data, and Internet of Things (IoT). Automation seeks 
to reduce costs and increase revenues, competitiveness, and customer satisfaction. It is a 
part of the ongoing digitization of the economy and society at large. ICT-based automa-
tion projects can be found in almost every business sector replacing human workforce 
by automated digital services, robots, and algorithms. A big concern for politicians and 
policy makers is whether this wave of automation will destroy more jobs than it creates.
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Financial Technologies (FinTech) is the use of new and emerging technologies to 
replace traditional financial services. Examples include mobile payment services, 
cryptocurrencies, blockchain methods, crowdfunding, and smart contracts. A 
major challenge associated with FinTech is data security.
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Robotic Process Automation (RPA) is a form of business process automation 
based on using software robots as workers instead of humans. These robots can 
perform repetitive tasks such as updating websites, answering questions from 
customer, and sending standardized e-mails. More advanced robots, based on 
cognitive automation, are being developed.
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In the manufacturing industry, automation is collectively referred to as Industry 
4.0. This implies the use of ICT to create smart factories based on industrial 
robots. 3D printing is an example of an Industry 4.0 technology. Here, industrial 
products are created on demand at customer premises outside the traditional 
manufacturing plants.
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Intelligent Transport Systems (ITS) is the use of ICT to automate the road and 
transportation sector. Examples of ITS applications include smart traffic signs 
and self- 
driving cars; both contribute to lower costs of transportation and 
increased traffic safety.
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The complement to digital goods and services is physical goods and non-digital 
services, comprising goods that can be touched and felt and have a physical pres-
ence (e.g., cars, books, computers, and furniture) and services that are not digital in 
nature (e.g., hairdressing, carpentry, and teaching).