DT&SC 2-5: Digital Economy

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so what are the opportunities that arise 1
on basis of these technological and human resources that create the requisite base of
the digital age arise by the possibility to modernize different sectors of society by
putting parts of the information communication flows in the sector into an electronic networks
that's where we get he government business the house e-education many more e sectors
that we talk about today lets start with e-business very important aspect all the digital HD digital
economy a very tangible and famous example is the use of mobile phones of fisherman in
Cala in India so in 1996 before they had mobile phones this economics professor Jensen went
to villages in India and found these fisherman that basically lived in poverty they were
working catching fish but not enough fish to feed their families way too little too
sell them and to make money in order to buy other things like medicine and so forth so
basically living in poverty five years after up to mobile phones were installed in 2001
he came back and somehow many of them were able to lift themselves out of poverty what
happened first with the mobile phones fishermen were able to communicate with each other's
when one went out on the ocean and this fisherman but they well the end of issue today let's
go away he had somebody else well let's go here here we have many sardines today so they
were able to optimize the fishing reels catching much more fish than ever before also protecting
them from surprised seeing storms and hurricanes because now they were able to communicate
a little bit better focus and among each other also increased their safety it's very dangerous
to go in the shabby boat like that out into the ocean and most importantly they were able
to communicate directly with the demand and adjust their supply of fish with the demand
in the market for example in this village there are 17 landing posts and in some of
these landing posts on a given day a market shop owner would offer three times more money
for a certain fish then another one, before they had phones it was just guess work to
which landing station they would go to in order to sell their fish but with a mobile
phone they were able to optimize their daily catch you think even before they went out
on the ocean they would communicates and say today let's not fish sardines because the
price is down they were able to cut out many middle man intermediate between also the shop
owner at at the market and the fishermen in with that pocket money himself so they lifted
themselves out of poverty with their own means to say in the words of Confucius if you want
to help poor man don't give him a fish teach him how to fish and the mobile phones are
kinda like these teachers that provide a very tangible opportunity for people to lift themselves
out of poverty so the idea of the digital economy is to digitalized all kind of information
communication processes happened between supply and demand that involves all the information
process that happened within the company the family of softwares in charge of that specialized
that I'll call it ERP enterprise resource planning software and how to manage all the
resources within the company that family a software specialized on their relationship
with my supplier a call SCM supply chain management software for example these are databases that
administer my inventory in my company the family of softwares connected to my customers
are called CRM customer relationship management for example if you go to Amazon to buy something
interface that you see interface that stores shopping history that give you recommendations
for things to buy these are all customer relationship management software tools that Amazon is using
and kind of software family that tries to combine the supply chain management and us
as we saw those planning and customer relationship management are called business intelligence
in general now of course my customers also have a supply chain management that communicates
directly with my CRM and my suppliers also have a customer relationship management that
connects directly to my supply chain management and then these kind of software’s autonomously
talk to one another at then of course the suppliers of my suppliers are connected to
the best of my digital means and the customers of my customers as well most companies in
the economy do not directly interact with the client they are some kind of Supplier
officer supplier which then interacts with the client as we got retake so the idea of
the digital economy and you digitalized that demand of the client in real time also over
internal business to business market place's with this supplier and information flow with
your happens Walmart for example was one of the first companies that really pushed is
completed digitization and that’s where the saying comes from that if you pick up
a gallon of milk in Walmart calls the cow to produce another gallon of milk the digitalization
between supply and demand in real time means that pricing is being digitalized because
prices are what intermediate between supply and demand and digital networks enable us
to adjust for prices in real time for example when I started work in this field in the early
2000's there was this guy who wrote a book on digital marketing and he decided to sell
it through the theory of dynamic online pricing so offered online for sixty dollars and if
nobody bought it because there was no demand the price dropped overtime and if somebody
bought it the price went up again so you could also than just program and I will say I only
buy this book if it's down to twenty dollars because it's not worth it for me and on a
Wednesday morning at 3am that was bought and the price went up again at because the wasp
and you demand so also the digitization only an hour through it just for prize in real
time it also allows to digitalized the buying and selling decisions the market that pioneer
these digitalization logic and of course the stock market a surprisingly big percentage
of transaction on the stock market are not executed by people but autonomously by algorithms
eighty percent of the buying and selling decisions on stock markets are often executed by algorithms
alone without adult supervision that can some times have severe consequences the so-called
flash crashes or very funny ones for example private and sellers not banks private started
to use these algorithm uses of buying and selling decisions as well as these two book
companies here who sold a book on flies on Amazon so this just ok on the genetics of
my nothing special a seller offered 1.7 million dollars and the other one offered for two
million dollars and that's when you should have bought it because the following day the
one of thirty for eighteen million dollars in the other 23 million dollars what happened
there? well it was a bidding war between two algorithms
without adult supervision and I don't think anybody bought book I think somebody with
$23 million dollars would rather buy a penthouse in Manhattan or something but these things
they can happen algorithms are learning to make these decisions for us and the real time
adjustment between supply and demand combined with algorithm decision-making has some very
interesting consequences check out this video by Keven Slavin about how algorithms shape
our world digitalisation does not only change the interactions between supply and demand
in digital marketplaces but also enters inside companies and digitalized the entire internal
workflow for example here you can see a modern car company you can see that biological workers
have basically been replaced by robotic arms by robots and human decision making has been
replaced by digital decision-making through artificial intelligence for example in this
situation here you can see 275 robots autonomously communicating through digital means with each
other executing all the necessary steps to produce a car humans don’t need to apply
robert igital there's a complication is the basis that enables that and you can see that
a lot nowadays sometimes even on the unexpected for example every time you buy a product on
Amazon check out what's happening back in inventory storage on Amazon

pexels photo 270637

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