Don Tapscott, a Canadian author and business executive, was the first to coin the term ‘Digital Economy’ in 1995 with the release of his best-selling book, ‘The Digital Economy: Promise and Peril in the Age of Networked Intelligence’. From the introduction of desktop university by Sun Microsystems to emergence of e-connected purchasing systems by Wal-Mart, Tapscott went on to cite various examples to explain the concept of Digital Economy – a computerized economy that turns simplification and hyper-connectivity into synonymous terms. Simply put, it is a structural shift from the traditional industrial economy towards a convergence of information, communication and computing.
In today’s world, digital economy is no longer confined to the digital space alone. With evolving strategies and technologies the line, demarcating the ‘new’ and the ‘old’ world has disappeared significantly. Businesses now increasingly bank upon strategies that converge the best of both worlds to maximize returns.
Digital Economy consists of four crucial elements:
• Systematizing production and work in new ways
• Changing information into commodity
• Codifying available knowledge
• Using digitalized Information and Communication Technologies (ICT)
Let’s take the case of Kaeser Compressors Inc., a leading manufacturer of compressed air and vacuum products, in order to comprehend the present state of Digital Economy. With nearly 100 years in the market, Kaeser Compressors is already the standard-bearer and its products are some of the most trusted ones. However, they are gaining more favor than predicted by delivering what modern customers seek most – excellent customer service along with quick response and easy interaction. Furthermore, the data received during the transactions from the sensors embedded in the company’s systems enhance the area of innovation and improvement. As traditional transactions ended immediately as a customer purchased a product, customer services were considered as an unimportant value-addition. But now, various forms of Digital Economy such as online banking and e-commerce are breaking ground in effectively bridging the gap between the consumer and service provider with a digital connection.
In the 45th World Economic Forum Annual Meeting held this year, the Executive Chairman of Google, Eric Schmidt had noted, “Almost all of the problems we debate can be solved by more broadband connectivity.” And he is correct. Digital tools have already started changing the diorama of diverse sectors, ranging from healthcare to farming. This growth in Digital Economy will transform communities by developing better connectivity. In short, it will keep on simplifying life in years to come.