Digital Revolution, Digital Economy and E-Commerce Transforming Business and Society. The Transition from the Industrial Revolution to the Digital Revolution


Bachelor Thesis, 2011
43 Pages, Grade: 9.00/10.00

Excerpt

Abstract

1. Digital Economy
1.1 Defining the Digital Economy
1.2 The steps of development of Digital Economy
1.3 Explaining the importance of Internet
1.4 The European Digital Economy
1.5 The Chinese Digital Economy
1.6 The Indian Digital Economy
1.7 Prevailing trends in profits and the indices of various shares in Information
Technology
1.8 The use of information in the production process
1.9 Digitized Information
1.10 The Effects of Digital Economy
1.11 Management of Organizations in the Digital Economy

2. Differences between the Traditional and New Economy
2.1 The current Greek reality
2.2 Comparison of the New Economy with the Current Economy
2.3 The thorny sides of the New Economy
2.4 Risks that lie behind the Digital Economy
2.5 Malicious Software (Malware)
2.6 Phishing
2.7 Indentity theft
2.8 Pirated Software
2.9 Description of the economic environment

3. Some first conclusions about the new or digital economy
3.1 What is required for the Digital or New Economy
3.3 The New Economy is a global Economy
3.4 What is the future of the New Economy?
3.5 Some last conclusions about the Digital Economy

4. The basic features of Electronic Commerce (eCommerce)
4.1 Classification of Electronic Commerce into specific categories
4.2 Electronic Commerce in Greece
4.3 What may be the future of e-business in Greece?
4.4 Some last conclusions about Electronic Commerce
4.5 Connecting Digital Revolution with E-Commerce

5. Digital Gap - A big challenge for the Digital Economy

6. Conclusions

7. Bibliography and References

The transition from the industrial revolution to the digital revolution Serafeim Triantafyllou

Abstract | This study is a scientific research that shows the transition from the industrial revolution to the digital revolution. The continuous flow of information and the rapid development of technology in today's times affect many aspects of our everyday life and in particular the economy, the consumer goods and in general the marketplace. These significant facts lead to the Digital Economy or the New Economy and the Information Society. The effects of the Information Society and the Digital Economy have become visible in Greece, even with a time delay.

The Information Technology revolution happens due to the rapid development of the Internet and the continuous development of Electronic Commerce. Digital economy is creating a unique business culture and establishing a network of economic values critical to the next phase of change in our technological society.

In order this research to contribute on the provision of knowledge, a detailed critical analysis has been followed on the above issues. In today’s times the need for specialized executives in Greece is a priority especially in the field of the Information Society and the Digital Economy. The employers want to find personnel with skills in order to take advantage of the new technologies and be profitable (Zoe Georganta and David Warner Hewitt, 2004).

This book is not about networking of technology but the networking of humans through technology. Networking, the art of building alliances, is a critical skill for employees at all levels and in all job roles. The people with their knowledge and creativity can offer a lot to wealth creation and social development. This new age is accompanied by some issues on privacy and security that should be taken into serious consideration.

Terms-Keys - Digital Economy, Information Society, Information Technology (IT), Internet, Electronic Commerce, development

1. Digital Economy

1.1 Defining the Digital Economy

In our effort to define the Digital Economy we consider important to start our research describing the IT revolution. Information Technology has as a basic tool that is personal computers (PCs). PCs are machines for the storage and processing of information. Information is the effect of the proper processing of the raw data. Raw data is unprocessed computer data. The data could either be entered by a user or generated by the computer itself. Because it has not been processed by the computer, it is considered to be "raw data". The digital information in a computer are stored in binary form and in other words in bits. The binary digit (0 or 1) is the basic information that a computer can understand and describes the fact that all the hardware devices and electronic circuits of the computer can understand two basic electric signals that match to 0 or 1.

As Don Tapscott states about digitization:

“Knowledge can now be stored in digital form or in 0s and 1s. Unlike the traditional economy where information was physical, communication was only possible through the actual movement of people. In the new economy, information in digitalform, facilitated by the digital devices allows the free movement of vast amounts of information in the shortest time possible between people in different parts of the world”.

Information Technology describes the storage process and the transition of information into digital form.

As Nirvikar Singh states:

“Digital Economy includes potential channels through which information technology (IT) affects economic development. ”

(Nirvikar Singh, 2003)

The benefits of Information Technology for developing economies are visible from the 90’s. Information Technology can improve efficiency and make developing country firms more competitive. The rapid development of Digital Economy was possible due to the support that many firms provided in terms of business capital and due to the financial markets that were directly connected with the development of Information Technology.

1.2 The steps of development of Digital Economy

Due to the dynamics of the Internet as a channel of dissemination of information and the use of Internet by firms that main aim was to improve their efficiency and competitiveness, a new economy appeared named “Digital or New Economy”.

(Nirvikar Singh, 2003)

In particular, from the late 80’s some firms started to express their interest about the use of a new technology named Internet and its contribution to further improvement of efficiency and competitiveness. Some businesses in USA started up new dot-com firms and the focus in the new digital economy that started to appear in the overall economy was towards new ways of development of efficiency and competitiveness. Unfortunately in the first years consumers didn’t take notice about the dynamics of the Internet and its use in Electronic Commerce. Internet is an ocean of information and enables the free movement of this huge amount of information in short time between people all over the world.

Nowadays, global businesses aim to take advantage of Information Technology and especially Internet in the field of Electronic Commerce. New businesses start up their activity over the Internet and try to enlarge their profits and their efficiency.

1.3 Explaining the importance of Internet

Internet became a research tool in a worldwide communication system. As Don Tapscott states about digitization:

“Knowledge can now be stored in digital form or in 0s and 1s. Unlike the traditional economy where information was physical, communication was only possible through the actual movement of people. In the new economy, information in digitalform, facilitated by the digital devices allows the free movement of vast amounts of information in the shortest time possible between people in different parts of the world”.

The internet is a globally connected network system that uses TCP/IP to transmit data via various types of media. The internet is a network of global exchanges - including private, public, business, academic and government networks - connected by guided, wireless and fiber-optic technologies.

The internet is the most cost-effective communications method in the world, in which the following services are instantly available:

- Email
- Web-enabled audio/video conferencing services
- Online movies and gaming
- Data transfer/file-sharing, often through File Transfer Protocol (FTP)
- Instant messaging
- Internet forums
- Social networking
- Online shopping
- Financial services

(Douglas E. Comer, 2007)

1.4 The European Digital Economy

European Digital Economy developed in a different way than the American Digital Economy. European citizens use their mobile phones for texting and posting messages through social media and blogs in the Internet more often than the Americans. However, the percentages of produced products and services through the Internet in Europe tend to be arithmetically lower than those in America. There are also some differences between the former and the later States of European Union in terms of adopting and implementing the new policies that emerge in the Digital Economy. However, the fast growing rhythm of development in the Information Technology and New Technologies of Eastern Europe show that the European Digital Economy will be unified. In particular:

- Almost 87% of the European population use standard telephony services, 78% use mobile telephony services and 61% use Internet services.
- While since October of 2006 19% of American citizens used their mobile phone in order to connect to the Internet, 29% of European citizens used the above services.
- Mobile telephone applications and services through the Internet were used a lot from people in Germany and Italy where we had a 34% of citizens to connect to the Internet through their mobile phones.
- The increase that was achieved to the profits of European Businesses in Telecommunications started to decrease by 10% in 2002, by 4% in 2005 and by 3% in 2006 due to the decrease that appeared in the standard telephony field and due to small increase in bandwidth that time.
- From the European countries, the most electronic transactions took place in United Kingdom in September of 2006 and in particular the 52% of the adult users of Internet did transactions electronically. It is important also to mention that in Germany 48% of Internet users, in France 45% of Internet users and in Italy 14% of Internet users did their transactions electronically.
- From 2002 to 2006, telecommunication services lead to an increase by 4.3% of Gross domestic Product (GDP) in European Union. Information Technology services lead to an increase by 0.2% of Gross domestic Product (GDP) in European Union from 2002 to 2006.
- The percentage of unemployment in Eurozone was 7% in May of 2007 and was the lowest percentage that was observed since 1996 and afterwards.

(Daniel B. Britton & Stephen McGonegal, 2007)

Abbildung in dieser Leseprobe nicht enthalten

(Source: comScore)

1.5 The Chinese Digital Economy

The basic player in the construction sector is China. Furthermore China is a country that invests in Information Technology and Telecommunications in an effort to promote a continuous economic and technological development. In 2006, China had approximately $1 trillion dollars foreign exchange reserves, foreign direct investments of $63 billion dollars and $177 billion dollars trade surplus. The monthly Chinese trade surplus increased at 27% and was $ 26.9 billion dollars in June of 2007. Additionally:

- In 2005 in China were measured 111 million users of the Internet and among them 64.3 million were users of broadband internet connections.
- The Chinese Government introduced some new laws about browsing the World Wide Web in order to ensure bigger security in use of the Internet services.
- Telecommunications are controlled in China from native Chinese firms. China Telecom and China Netcom are responsible for the standard telephony and China Mobile and China Unicom are the basic providers of mobile telephony services.
- In 2006 in China were measured 437 million users of mobile telephony and in particular 301 million of them were subscribed in China Mobile. Comparing the numbers we could say that 301 million users consist the total population of United States of America at that time.

(Daniel B. Britton & Stephen McGonegal, 2007)

1.6 The Indian Digital Economy

While China is considered to be the first country where products are produced with low cost, India is considered the best place for supplying companies with low cost services in the Information Technology sector. Additionally:

- In September of 2007, there were measured approximately 60 million users of Internet services and 2.5 million broadband connections
- Also in August of 2007, it was estimated that in India were measured 201 million mobile telephones and 40 million telephone lines
- The Indian industry of the media spent $100 million dollars in 2006 and $300 million dollars in 2010 in Information Technology sector.

(Daniel B. Britton & Stephen McGonegal, 2007)

The most well-known wireless service providers and the subscribed users

Abbildung in dieser Leseprobe nicht enthalten

(Source: TRAI-Telecom Regulatory Authority of India)

1.7 Prevailing trends in profits and the indices of various shares in Information Technology

While technology spending has risen steadily for a decade, the merit of shares of businesses that have invested in new technologies started to rise rapidly. In particular:

- The global marketplace in Informatics and Telecommunications in 2006 was estimated to worth $ 3.15 trillion dollars and $ 1.57 trillion dollars of them had been spent for the development of various form of telecommunications, $ 730 billion dollars had been spent in Information Technology services, $ 537 billion dollars had been spent in hardware and $ 317 billion dollars had been spent in computer software.
- IBM was the biggest Information Technology Company in all over the world in 2006 with sales of $ 48.2 billion dollars. However, the shares of IBM stock in Information Technology sector were only estimated at a 7.2%.

(Daniel B. Britton & Stephen McGonegal, 2007)

1.8 The use of information in the production process

Without a doubt, the new technologies changed the structure of the economy. These changes affect the banking sector, the Information Technology sector and generally the Internet.

This type of change is not entirely new. Writing, typography, telegraphy and media inventions (newspapers, radio, television) have had a major impact on the economy, society, have changed the value chains and have led to the creation of new products and services. A value chain is a set of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market (Michael Porter, 1985).

“ The idea of the value chain is based on the process view of organizations, the idea of seeing a manufacturing (or service) organization as a system, made up of subsystems each with inputs, transformationprocesses and outputs. Inputs, transformationprocesses, and outputs involve the acquisition and consumption of resources - money, labour, materials, equipment, buildings, land, administration and management. How value chain activities are carried out determines costs and affects profits. ”

(IfM, Cambridge)

Therefore, the question arises as to what is new in the digital economy. The digital economy is the next stage, the stage of the technological innovations of a new era of economic and social change. But can these changes be measured? A more detailed review would lead us to think of parts of the value chain where a new form of information works. The following diagram illustrates the relationship between the customer and the producer of a product that is in demand. It also appears in the diagram that some intermediaries are emerging between the product, the producer and the consumer.

Illustration of Producer-Product-Consumer Relationship

Abbildung in dieser Leseprobe nicht enthalten

(Source: Beat F. Schmid, 2000)

1.9 Digitized Information

Information Technology is based on two basic routes:

1. The officialized and standardized logic
2. The streamlining workflow

In the nineteenth century, after the application of mathematical science to the calculus, we arrived at the beginning of the 20th Century to formalize the processing of information. In the 19th century, the concept of division and segmentation of work, as well as rationalization of the workflow had already been mentioned. In particular, the division of labor was formulated by Taylor and the assembly line by Ford that set the milestones and the main points of the information processing phase (Heinz, 1986).

The calculations based on the analytical geometry provide an official description of space constellations and space-time as well as mathematical physics, as well as industrialization and the nature of the industrial age (Schmid, 1999).

At the present time, we have the next step in formalizing the logic represented by a new science, the science of Information Technology (Schmid, 2000).

1.10 The Effects of Digital Economy

The effects of Digital Economy can be depicted in different ways. In our effort to investigate the effects that the Digital Economy exerts, we have to consider how many Internet users use Internet on a daily basis, the number of webpages created, etc.

These measures do not directly measure internet-based economic activity, even though the provision of Internet access is by itself an economic activity. For example, we can name direct transaction data as measures of internet-based economic activity.

Statistics that are often used to measure the growth of Digital Economy are the number of users who access the Internet and the number of websites that are published on the Internet. The US Department of Commerce, using figures from the US Department of Census, reported that 143 million American citizens or 54% of the US population used Internet services in September 2001, while three months earlier, the number of Internet users were 117 million citizens.

On the other hand, the use of the Internet has increased on a global scale. In particular, it was estimated that of 619 million users worldwide, more than half of them used the web services in many languages.

The number of published websites on the internet was estimated to be more than 1 billion websites until January 2000, while in October 1997 it was only 100 million. The number of websites in February 2003 was 36 million sites, while in August 1995 there were 19,000 websites. Over the years, the following figures have emerged: The number of published websites on the Internet has been rising steadily. In particular, in September 2009 it reached 240 million websites, as illustrated by the following chart.

Abbildung in dieser Leseprobe nicht enthalten

(Nirvikar Singh, 2003) & (http://www.netcraft.com/survey last accessed [21/12/2003])

1.11 Management of Organizations in the Digital Economy

Businesses are trying to adapt to the era of Digital Economy, giving emphasis to the creativity and inventiveness of their executives. Consequently management goes through the design, organization and control phase into a phase that gives a particular emphasis on insight, motivation and inspiration (Kostner, 1996).

Moreover in the new era of Digital Economy, the online economy has emerged and the entrepreneurs and the personnel started to give special emphasis to cooperation, inspiration and competitiveness. As illustrated by the following diagram, the key features of Digital Economy are: co-operation, inspiration, authority of competence, knowledge networking, concurrent processes, horizontal communication, trust and integrity. From the other side, the key features of the industrial era were: chain of command, command and control, authority of position, sequential processes, vertical communication and compliance.

[...]

Excerpt out of 43 pages

Details

Title
Digital Revolution, Digital Economy and E-Commerce Transforming Business and Society. The Transition from the Industrial Revolution to the Digital Revolution
College
University of Macedonia
Grade
9.00/10.00
Author
Year
2011
Pages
43
Catalog Number
V470122
ISBN (eBook)
9783668950559
ISBN (Book)
9783668950566
Language
English
Notes
Any brand names and product names mentioned in this study are subject to trademark, brand or patent protection and are trademarks or registered trademarks of their respective holders. The use of brand names, product names, common names, trade names, product descriptions etc. even without a particular marking in this work is in no way to be construed to mean that such names may be regarded as unrestricted in respect of trademark and brand protection legislation and could thus be used by anyone.
Tags
economy, e-commerce, transforming, business, society, transition, industrial, Digital Revolution, Digital Economy, Digital Economy and E-Commerce Transforming Business and Society, learn about digital economy, learn about ecommerce, learn about cybersecurity, cybersecurity
Quote paper
Serafeim A. Triantafyllou (Author), 2011, Digital Revolution, Digital Economy and E-Commerce Transforming Business and Society. The Transition from the Industrial Revolution to the Digital Revolution, Munich, GRIN Verlag, https://www.grin.com/document/470122

Comments

  • No comments yet.
Read the ebook
Title: Digital Revolution, Digital Economy and E-Commerce Transforming Business and Society. The Transition from the Industrial Revolution to the Digital Revolution


Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free