The market has branded digital as the “new cool”, everyone wants to go digital. In fact the concept of digital has been out there for years now, started with the introduction of electronics, Information Technology (IT), Internet and automated production in the 1970’s, known as the third industrial revolution (digitization). These technologies grew apart then and were intertwined in the late 1980's with the introduction of the World Wide Web. I think the market is starting to adapt to technological changes.
Digital economy is an economy that is underpinned or based on digital computing technologies. Digital technology is basically digitized information recorded in binary code of 1's and 0's, also called bits which represent words and images in a computer language. Digital technologies refers to big data and analytics, cloud computing, mobile devices and social media platforms, to name a few. Increasingly the digital economy is intertwined with the traditional economy making a clear delineation harder. The characteristics of digital economy are:
Characteristics of digital economy
On the other side the traditional economy is quite the opposite. As the name suggest it’s built upon customs, traditions and beliefs etc. The goods and services are determined based on the livelihood of the people. However the global macroeconomic context is unpredictable for both digital and traditional economy. The Global GDP growth for 2017 is projected to be 3.6%. South Africa GDP growth is projected at 0.2% in 2017. A recession is unavoidable as the country faces Junk status and a tough economic environment coupled with weak employment, higher inflation, tight credit conditions, political uncertainty and weak domestic demand.
What’s next big thing?
The Digital economy evolution and the Internet of Everything (IoE) is next big thing... IoE “is bringing together people, process, data and things to make networked connections more relevant and valuable than ever before – turning information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.”, (Cisco, 2013). The government regulations needs to be flexible and adapt with changing times and not limit economic growth. Governments and organizations needs better strategies to take advantage of the fourth industrial revolution, refer to my previous blog “Is technology outpacing us” for relevant insights on technological advancement.
To name a few disruptive technologies:
Blockchain, the technology underpinning the cryptocurrency, has the potential to revolutionize the world economy. Blockchain technology is basically a distributed database. It’s open source, so anyone can change the underlying code, and they can see what’s going on. It’s truly peer to peer and doesn’t require powerful intermediaries to authenticate or to settle transactions.
Programmable economy, Digital currency, Digital payment advisor, API Economy, Smart assets, Smart contracts, IP money etc.
Most organizations are becoming data driven, innovative, customer experience focused and digitized. This is no longer a requirement but a must for organization to stay relevant and competitive. It is essential for organizations to embark on the digital transformation journey for the right reasons and not just follow the hype of these new technologies.
“Digital” is currently the most used word in business and the market. The diagram below depicts the most commonly used words in “Digital economy”.
Digital economy word cloud
Buhlebenkosi Consulting, 2017
Stay tuned for more!