Value & worth: Creating new markets in the digital economy

Value & worth: Creating new markets in the digital economy
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价值

DOI:
10.1057/rpm.2013.42
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发表时间:
2012
影响因子:
1.6
通讯作者:
Ram Bala
Ram Bala
中科院分区:
--
文献类型:
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作者:
Ram Bala

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Books about the digital economy have conceptually come full circle, but we have learnt something new in the process. In the mid1990s, managers faced with the digital onslaught began to rely on an ever-changing menu of buzzwords in making critical decisions, often with mixed results. In a way, these managers believed that classic economics was inadequate to handle the Brave New World that they were up against. There was merit to their intuition but they were let down by the academic literature that was available at the time. Shapiro and Varian’s classic book ‘Information Rules’ was an important guidebook in the midst of this confusion by reinforcing the fact that basic economic principles were not dead and that while ‘technology changes, economic laws do not’. There was nothing wrong with this view in 1999. At that time, the digital revolution was primarily one that automated existing tasks and reduced the time taken or the cost incurred in performing a customer-value-adding activity. However, the time has come to rigorously define a ‘new economics’, something that eluded the early thinkers. In that sense, we need to go back to where we started, but hopefully with a more refined and informed view. Although we all intuitively feel the need for this ‘new economics’, Irene Ng’s book, ‘Value & Worth: Creating New Markets in the Digital Economy’, rigorously describes the need for this new economics and then proceeds to define the rules of the same. Finally, she provides guidance to companies on strategies that take this dynamic landscape into account. Chapter 1 describes the reasons for the failure of conventional economics in addressing the current digital environment. Today, digital markets are characterized by latent unserved markets, wider customer choices in terms of access and ownership, new use contexts, and a fundamental change in the nature of content itself (because of the significant rise of user ability to modify content). The chapter then highlights the fact that the future battleground for service is at the intersection of content, the device that delivers content, the wider community that the customer is a part of and the nature of connectivity between the customer and the community. Chapter 2 discusses the origins of this complex landscape. It makes the case that the notion of ‘value’ has changed. Two notions of value are described. Atomistic value, which considers value to be intrinsic to the object, and Phenomenological value, which considers value as arising from a person’s experience, interaction or relationship with the object. In a traditional, production and market exchange centric view of the world, the worth of an object is simply the exchange value of the object and that is easily measured by atomistic value. However, economic analysis based on this reductionist notion of value is obsolete. The digital economy of the future will be about phenomenological value or