Classroom Companion: Business

Notation
. Fig. 4.3 Dependencies in the digital economy ecosystem. (Authors’ own figure)
4.2 · Ecosystem Components

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The complexities and dependencies in the digital economy ecosystem result in a 
market that is never the same from one day to the next. Changes such as new stake-
holders entering the market, development of new technologies, variations in con-
sumer adoption, altered competition arenas, new legislation and market regulations, 
and fluctuating dependencies among the stakeholders, all contribute to a market 
state that is more transient in nature than stationary. 
.
Figure 
4.4
illustrates the 
difference between transient and stationary states. The transient view of the digital 
economy is consistent with the teachings in complexity economics (Durlauf, 
1998
). 
In complexity economics, the basic argument is that the economy is ever-changing 
and will never reach a stationary state. The reasons for this are rooted in the digital 
economy ecosystem and the rate of technological innovation.
For a stationary market to exist, most of the market aspects mentioned above 
must be stable and unchanging. In the digital economy, new technologies are, in 
contrast to stationary markets, developed and adopted at a rapid rate. A good 
example is digital mobile communication which has changed from supporting sim-
ple telephone and messaging services (GSM in 1990) to offer a mix of telephone 
services, messaging services, data services, broadband streaming services, and IoT 
(5G in 2020) by adding new service capabilities, upgrading the network architec-
ture, and implementing new access technologies every few years.
New technologies often lead to new business models, thereby causing changes 
in the digital economy ecosystem. In mobile communications, this has been an 
evolution from simple services offered by a single telephone services provider to 
services offered by an amalgamation of almost all kinds of application service pro-
viders (ASPs). All this contributes to the transient nature of the digital economy. 
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Chapter 
18
presents quantitative models for analyzing the transient nature of 
the digital economy.
Time
Process
Transient state
Stationary state
. Fig. 4.4 Transient and stationary states. (Authors’ own figure)