Digital economy

Digital economy refers to an economy that is based on digital computing technologies, although we increasingly perceive this as conducting business through markets based on the internet and the World Wide Web. The digital economy is also sometimes called the Internet Economy, New Economy, or Web Economy. Increasingly, the digital economy is intertwined with the traditional economy, making a clear delineation harder. Digital economy refers to an economy that is based on digital computing technologies, although we increasingly perceive this as conducting business through markets based on the internet and the World Wide Web. The digital economy is also sometimes called the Internet Economy, New Economy, or Web Economy. Increasingly, the digital economy is intertwined with the traditional economy, making a clear delineation harder. The term 'Digital Economy' was first mentioned in Japan by a Japanese professor and research economist in the midst of Japan's recession of the 1990s. In the west the term followed and was coined in Don Tapscott's 1995 book The Digital Economy: Promise and Peril in the Age of Networked Intelligence. This was among the first books to consider how the Internet would change the way we did business. According to Thomas Mesenbourg (2001), three main components of the 'Digital Economy' concept can be identified: But, as Bill Imlah comments, new applications are blurring these boundaries and adding complexity; for example, consider social media and Internet search. In this new economy, digital networking and communication infrastructures provide a global platform over which people and organizations devise strategies, interact, communicate, collaborate and search for information.More recently, Digital Economy has been defined as the branch of economics studying zero marginal cost intangible goods over the Net. The Digital Economy is worth three trillion dollars today. This is about 30% of the S&P 500, six times the U.S.’ annual trade deficit or more than the GDP of the United Kingdom. What is impressive is the fact that this entire value has been generated in the past 20 years since the launch of the Internet. It is widely accepted that the growth of the digital economy has widespread impact on the whole economy. Various attempts at categorizing the size of the impact on traditional sectors have been made. The Boston Consulting Group discussed “four waves of change sweeping over consumer goods and retail”, for instance. In 2012, Deloitte ranked six industry sectors as having a “short fuse” and to experience a 'big bang” as a result of the digital economy.