Digital economy is built on digitization and the advent of the Internet. Digitization and its infrastructure for communications and networking changes the way we live and work. The digital economy was born two decades ago and is now contributing to a substantial portion of the U.S. economy, an amazingly rapid and exponential value creation within a short period of time and thus a ‘growth multiplier’ for both matured and developing economies (Knickrehm, Berthon, and Daugherty, 2016). The companies born out of the digital economy have displaced traditional firms (e.g., Wikipedia – Encyclopedia Britannica; Instagram – Eastman Kodak; Netflix - Blockbuster), introduced new business models (e.g., Uber, Google), cannibalized iconic retailers (e.g., online giant Amazon threatening brick-and-mortar retailers such as Sears and Macy’s), invented new currencies (e.g., Bitcoin), and many more.
Excerpt from "Is there a Path from Sin City to Tech City? The Case for Las Vegas" from Sussan, Sloboda, & Hall (forthcoming) in Entrepreneurial Ecosysmtes: Place-based Transformations and Transitions, O'connor,A., Stam, E., Sussan, F. and Audretsch, D. (eds). Springer
Given all these changes, how do firms carryon with their businesses? Digitization leads to digitalization. Digitization is the technical process, whereas digitalization is a sociotechnological process of applying digitization techniques to broader social and institutional contexts that render digital technologies infrastructure (For a detailed discussion see Sussan and Acs (2017) Digital Entrepreneurial Ecosystems. Small Business Economics, 49:55-73.). Beyond the creation of entrepreneurial firms that use digital technologies, ALL busineses will need to rethink and adapt to the digital economy.
What are your thoughts?
I am reminded of the progression of digitization when thinking of the incremental ever increasing amount of internet usage that seems to now consume so much of our daily lives. In the past, our urban areas swelled and cities expanded into the suburbs. The suburbs then encroached on the rural communities and now so many people live in cyberspace.
Fiona is correct that digitization is the new customer elixir. Companies that do not embrace the technology or know how to effectively engage it, will be severely limited. From shopping and entertainment to our very own digital brands, every bit and byte can provide a history as well as a prospective on tastes and key decisions that can make or break business from mom and pop shops to Fortune 500s.
This is where research is ripe with opportunity. Digitization can be tailored for extraordinary customer experiences especially where crowd sourcing is used for consensus and where big data can yield predictive consumer behaviors and this is just the beginning. Thank you for raising the call on what every business must heed.
Thank you Erik for focusing on the customer experience perspective of digitalization. Yesterday when I was presenting this topic to some economists, I also mentioned how shocking it is that many companies (retailers) websites have yet to adopt Livechat with their customers.
How does the new platform of Blockchain effect Digital Entrepreneurial Ecosystems?
Noticed no structure group of research developed to spear head this new platform as-a-service especially for research. Dr. Sussan I would like to inquiry about creating a Blockchain - researcher group any thoughts?
I have just begun the Doctorate journey. I am formulating my research question in the areas of digital transformation, project management, and business process management. I have more than 20 years experiences in the banking industry. I would love to hear your thoughts on the matter of 1) Blockchain 2) Is there a process gap of digitalizing business processes?
What a great idea Jasper! How about forming a Special Interest Group around this.