Internet economy

Digital economy refers to an economy that is based on digital computing technologies. The digital economy is also sometimes called the Internet Economy, the 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 coined in Don Tapscott's 1995 book The Digital Economy: Promise and Peril in the Age of Networked Intelligence. The Digital Economy 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.

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.

Telstra, a leading Australian telecommunications provider, describes how competition will become more global and more intense as a result of the digital economy.

Given its expected broad impact, traditional firms are actively assessing how to respond to the changes brought about by the digital economy. For corporations, timing of their response is of the essence. Banks are trying to innovate and use digital tools to improve their traditional business. Governments are investing in infrastructure. In 2013, the Australian National Broadband Network, for instance, aimed to provide a 1 GB/sec download speed fibre based broadband to 93% of the population over ten years.

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Wikipedia