Introduction to Digital Economy

Contents
 What is Digital Economy?

A digital economy  is an economy that is based on electronic

goods and services produced by an electronic business and
traded through electronic commerce. That is, a business with
electronic production and management processes and that
interacts with its partners and customers and conducts
transactions through Internet and Web technologies.
Components
of the
Digital
Ecosystem
 Digital products

Information and entertainment

products
Processes and services
Symbols , tokens , icons
Financial instruments: checks, Tickets and reservations:
credit cards, electronic airline, concert, cinemas
currencies

Teen's Prepaid Card

Parental peace of
mind
 
Electronic marketplaces
•
–
 What Is Information Technology?

• What is information?
– Within IT, information consists of recognizable patterns like
text, drawings, pictures, audio or video that are normally
conveyed to people through a physical medium
• What is technology?
– Technology is the process by which humans modify nature to
meet their needs and wants
• Tangible products – physical artifacts: e.g., computer,
software, aircraft, etc
• Intangibles products – knowledge and process
necessary to create and operates the tangible
products, e.g., engineering know-how and design,
manufacturing expertise, technical skills
• What is information technology?
– IT is dedicated to capturing, manipulating, storing,
communicating, retrieving and presenting information
represented in digital form on behalf of people of whom we
call users.
 What Is Information Systems?

 What is a system?
◦ A system is a group of interacting, interrelated, or
interdependent elements forming a complex
whole.

 Information system is
◦ a collection of interrelated components (hardware,
software, procedures, people, databases) that
work together to “collect” (or retrieve), process,
store and distribute information to support
decision making and control an organization
(Laudon & Laudon 1994)

 Information technology is
◦ the mechanism that engenders the activity of gathering
& processing data, producing information outputs and
the disseminating information to users
 INFORMATION TECHNOLOGY …..
• Properties of information
– Digital information has supply of economies of scale:
replication, storage and communication is inexpensive
– Digital information is non-rival in use
– Information is an experience good: quantity and quality
is best judged by experience


• Physical embodiment of IT has three constituents

– Processing: modifies digital information under the
direction of the software
– Storage: conveys digital information from one time to
another
– Communication: conveys digital information from one
place to another
Buying or Renting a Movie Online

Screenshot 1U . 1 Netflix

Copyright 2010 John Wiley & Sons, Inc. 16

 Toyota Scion’s Innovative
Advertising Strategies (continued)

For the 2008 xB SUV , Scion created a

special Web site , want2bsquare . com
Copyright 2010 John Wiley & Sons, Inc. 17
Business pressures , organizational performance and
responses , and IT support .
Copyright 2010 John Wiley & Sons, Inc. 18
 Green IT


Pushing Green Technology



Copyright 2010 John Wiley & Sons, Inc. 19

Social Networks

Click to PCWorld Business Center

article forNetworks
Social more …. Go to Work

Copyright 2010 John Wiley & Sons, Inc. 20

 Social Computing

What is Web 2.0?

Copyright 2010 John Wiley & Sons, Inc. 21

 Understanding the
underlying economic
context
People Era:
RELATIONSHIPS

Information Era:
DATA

Industrial Era:
GOODS

Agricultural Era:
FOOD

1880 1900 1920 1940 1960 1980 2000

In year 2000 the information age ended
 Innovations and Moments of Opportunity
1995 2003:
World Wide Communities of
Web Practice
Agricultural Era
Industrial Era
Information Era 1985
Relationship Era
Computer Automated Design
Moment of Opportunity

1990
Internet
PERSONAL WEALTH CREATED

1930
Electricity In
Mainstream Use
1915
Internal Combustion
Engine Jumpstarts
1975 Mini
Industrial Era
Computer

1965 1995 E-Mail

IBM Computer

1880 1920 1940 1960 1980 2000

1900
 Information Systems Usage
ls :
le ve
es e
t th
d a
u s e
b e
n IS
Information System –
Classification By Support Function

Chapter 2 26
What can IT do for the
organisation?
 The firm in its environment

08/08/10 28
 The relationships Type
Size
Structure
Information Ecology Strategy

COMMUNITY
Sharing
Ethics
Organisation
B2B
Banks
Internet Competitor
Banking Partn
er B2E
Privacy Supplier B2B
Relat Labor Trust
ERP, SCM ionsh Unions
ip
Manufacture Mgt
B2B Association
r s
MRP
Customer
B2C Relationship
B2G Government
Mgt Agencies
E-government
Health Consumer
C2G Honesty
C2C
E-marketplace
E-retailing
Combating Crime
08/08/10 29
 Relationship
• C2C • Individual to individual
• C2G • Individual to Organisation
• B2C • Organisation to
• B2E Organisation
• B2B
• B2G
• G2G
IT for Competitive Advantage

A competitive advantage is an
advantage over competitors
 What Does IT Do for Business?
 Strategic
Structurally and
Pertinent
operationally enable to long-term
and attainment of goals and business as a whole
facilitate information
systemsTactical
& communications

Needed to achieve strategic plans and goals to produce changes f
Support
 business
Operational
operations
• Process and actions that must be performed on a day-to-day basis


Support managerial


decision making


Support strategic


competitive advantage


33
Computer Technology vs Business
Application