Classroom Companion: Business
Download 5.51 Mb. Pdf ko'rish
|
Introduction to Digital Economics
|
Harald Øverby
Gjøvik, Norway Jan A. Audestad Gjøvik, Norway May 2021 IX About this Book This book is about digital economics—the branch of economics studying digital goods and services. Innovations and developments in information and communi- cation technology (ICT) have laid the foundations for this branch of the economy. This includes technologies such as social media, apps, cloud computing, mass stor- age, data mining, cryptocurrencies, and sharing services. These services have already made deep imprints on today’s business landscape. Both private businesses and the public sector embrace ICT to achieve cost benefits, efficiency, and com- petitive advantages. However, what we are witnessing is just the beginning of an economic revolution as the full potential of the digital economy is about to be harvested. The major goal of this book is to provide a theoretical basis for digital econom- ics and to show how these theories can be applied to the study of real-world eco- nomics and business phenomena. The book is cross-disciplinary, explaining how the interaction between markets and important innovations in telecommunications and information technology has shaped the digital economy. The field of digital economics is characterized by transient market behavior, feedback mechanisms, global markets, many stakeholders, and technology dependencies never seen in any markets before. The book highlights this complex ecosystem. The book is written for advanced undergraduate courses in digital economy for students in computer science, economics, and management. To get the full benefits from the book, a student needs first courses in computer science, calculus, and economics. The book may also be of interest to a broad range of professionals, including economists, business consultants, managers, and computer scientists since it studies the impact several technological, social, and economic disciplines have on the evolution of the digital economy. Each chapter may contain, in addition to the main body of the chapter, ele- ments such as: 5 Learning goals are at the beginning of the chapter. 5 Case studies are real-world examples of digital products and markets. 5 Examples are used to show concrete applications of the theoretical material not associated with a particular real-world case. 5 Boxes contain supplementary material. In particular, mathematical derivations are contained in boxes to make the text more accessible. 5 Questions and answers are included at the end of each chapter. The questions are not direct repetition of elements in the text but may require search for infor- mation in other sources, e.g., the web. 5 Further reading. Some chapters contain references to books or articles provid- ing deeper insight into the material presented in that chapter. X The book consists of 22 chapters. These chapters can be grouped into several themes: 5 7 Chapter 1 is an introduction where the basic concepts of the digital economy is defined. 5 The technological evolution of digital networks, goods, and services is the topic of 7 Chaps. 2 , 3 , and 20 . 7 Chapter 2 shows the timeline of major inventions in the information and communication technology leading to the digital mar- ketplace we see today. 7 Chapter 3 shows how the communication network converges into a single network based on the Internet technology and, thus, replacing dedicated networks such as the telephone network. 7 Chapter 20 contains supplementary material on the impact of the big data technology on the digital economy – big data is a core technology for several of the biggest companies in the digital economy. Technology is a side issue in almost all chap- ters since almost all aspects of the digital economy are intimately connected to the technology. 5 Key characteristics of the market are identified in 7 Chaps. 4 , 5 , 6 , 7 and 18 . 7 Chapter 4 describes the ecosystem of digital markets, including the various stakeholders that shape the business landscape. This chapter also shows that the protocol structure of the Internet divides the digital businesses into two sepa- rate business categories: Internet service providers and application and content providers. This division is the key element behind the enormous innovation of digital applications since 2000. 7 Chapter 6 is one of the most important chap- ters in the book since it defines the basic characteristics of digital goods and services and what makes them different from physical goods. The most impor- tant characteristic is that the marginal cost of digital products is zero, allowing companies to offer digital services free of charge and thereby generating a tre- mendous market for them. Combined with big data technology, these compa- nies may then exploit the data they collect about their users to generate revenues from advertisements and other products. 7 Chapter 5 describes how the tele- communications market evolved from de facto monopolies to full competition, and 7 Chap. 7 outlines new production models for digital services enabled by the technological evolution. 7 Chapter 18 contains supplementary mathemati- cal models describing how these markets evolve as a function of time. 5 Various strategic issues are contained in 7 Chaps. 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , and 16 . 7 Chapter 8 discusses how value is created in different businesses: chains producing physical goods, shops solving problems for clients, and net- works acting as mediators between groups of clients. One particularly impor- tant strategic element is network effects, or positive feedback from the market. This is explained in 7 Chap. 9 . 7 Chapter 10 about multisided platforms is an application of the theories of 7 Chaps. 8 and 9 . The other chapters in this groups are concerned with other strategic issues such as path dependence (11), lock-in (12), formation of monopolies and oligopolies (13), acquisitions and mergers (14), development of technical standards (15), and the long tail (16). 5 7 Chapters 17 and 19 are about business modeling. 7 Chapter 17 characterizes the digital markets as e-commerce markets, network access markets, and infor- mation services markets. 7 Chapter 19 demonstrates, using several real-life About this Book XI examples, the use of the business model canvas and the stakeholder relationship model as powerful tools for business planning and analysis. 5 Regulations are the subject matter of 7 Chaps. 21 and 22 . 7 Chapter 21 is about the complex political issue of net neutrality. Net neutrality implies non- discriminate access to and use of the Internet. In some countries, this is an obligatory regulation while not in other countries. 7 Chapter 22 is about other types of regulations concerning provision and use of the communications infrastructure. About this Book |
