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Posts Tagged ‘Digital Economy’

China’s Rapid Shift to a Digital Economy

Posted by hkarner - 9. September 2020

Date: 08‑09‑2020

Source: Project Syndicate by Zhang Jun

Zhang Jun is Dean of the School of Economics at Fudan University and Director of the China Center for Economic Studies, a Shanghai‑based think tank.

China may well be the only major economy to achieve positive growth this year. It owes this, in no small measure, to a decade of commitment to heavy investment in technology‑driven structural transformation.

SHANGHAI – Despite taking a serious hit from COVID‑19 lockdowns, China’s economy has proved resilient. It has not, however, fully bounced back: some activities, especially in the service sector, simply cannot be revived. Yet, unlike most of the world, China seems unlikely to become mired in a long recession, not least because of its rapid digital transformation.

China’s digital economy was growing strongly before the pandemic. In 2018, it already accounted for CN¥31.3 trillion ($4.7 trillion), or 34.8% of GDP. While this is only about one‑third the size of America’s digital economy, it represents years of growth that outpaced that of nominal GDP. The COVID‑19 crisis is set to reinforce this trend. Den Rest des Beitrags lesen »

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Who will benefit most from the data economy?

Posted by hkarner - 23. Februar 2020

Date: 20‑02‑2020

Source: The Economist

It is already unequal and that inequality could get worse

The data economy is a work in progress. Its economics still have to be worked out; its infrastructure and its businesses need to be fully built; geopolitical arrangements must be found. But there is one final major tension: between the wealth the data economy will create and how it will be distributed. The data economy—or the “second economy”, as Brian Arthur of the Santa Fe Institute terms it—will make the world a more productive place no matter what, he predicts. But who gets what and how is less clear. “We will move from an economy where the main challenge is to produce more and more efficiently,” says Mr Arthur, “to one where distribution of the wealth produced becomes the biggest issue.”

The data economy as it exists today is already very unequal. It is dominated by a few big platforms. In the most recent quarter, Amazon, Apple, Alphabet, Microsoft and Facebook made a combined profit of $55bn, more than the next five most valuable American tech firms over the past 12 months. This corporate inequality is largely the result of network effects—economic forces that mean size begets size. A firm that can collect a lot of data, for instance, can make better use of artificial intelligence and attract more users, who in turn supply more data. Such firms can also recruit the best data scientists and have the cash to buy the best ai startups. Den Rest des Beitrags lesen »

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The digital side of the Belt and Road Initiative is growing

Posted by hkarner - 9. Februar 2020

Date: 06‑02‑2020

Source: The Economist

Many believe it is where much of the rivalry over the plan will play out in future

One tropical evening in November, the 9,800‑tonne Ile de Bréhat slipped from the quay at Honiara, capital of the Solomon Islands, and steamed out of Iron Bottom Sound. For weeks the boat had been a familiar sight as it finished its job of laying 4,700km of fibre‑optic cable from Sydney to Honiara on Guadalcanal and 730km among the main outlying islands, with another branch heading to Port Moresby, capital of neighbouring Papua New Guinea. Less than a fifth of Solomon Islanders have access to the internet. The Ile de Bréhat is about to transform more lives than any ship since the Los Reyes, the first European vessel to discover the islands, in 1567.

Two‑thirds of the $93m cost of the Coral Sea Cable System was borne by the Australian government. It got wind that China was proposing to do the job, led by Huawei, China’s telecoms giant. Australian intelligence types view Huawei as a national‑security concern. Australia is also the biggest donor to Pacific Island nations and is used to being top dog in its backyard. It told leaders in Honiara and Port Moresby that Huawei was not to be considered.

Yet Australia has taken its eye off the Pacific in recent years, as China has stolen a march. Two‑way trade with the Pacific has grown tenfold, from under $1bn in 2005 to over $8bn in 2018. Chinese tourists to the region jumped from under 4,000 a year a decade ago to more than 140,000 in 2017. China’s leaders extol the potential for bri co‑operation with Pacific nations. A “new Pacific diplomacy” has gathered pace since President Xi Jinping made his first trip to the region in late 2014. Pacific Island leaders frequently head for China. Den Rest des Beitrags lesen »

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Das Ende des Paradigmas vom freien Markt

Posted by hkarner - 10. Januar 2020

Diane Coyle is Professor of Public Policy at the University of Cambridge.

CAMBRIDGE – In den 2020er Jahren werden wir die Vorstellung, wonach die Lösung wirtschaftlicher Probleme „dem Markt überlassen” werden könne, endgültig begraben –  nach rund 40 Jahren, in denen diese Überzeugung der Gesellschaft und der Umwelt unermesslichen Schaden zugefügt hat.

Diese Prognose kann aufgrund des Wesens der digitalen Ökonomie mit derartiger Gewissheit gestellt werden. Die seit langem bestehende Wirtschaftstheorie, der zufolge Firmen oder Menschen durch individuelles Handeln zur Maximierung der Gewinne oder des „Nutzens“ das beste Ergebnis für die Gesellschaft erzielen, war nie stichhaltig. Denn wenn es so wäre, würden Unternehmen keinen Vorteil darin erblicken, stark zu wachsen und Werbetreibende würden niemals sozialen Druck anwenden, um Verbraucher zu manipulieren. In der digitalen Welt ist es aber schlicht nicht möglich, unsere gegenseitige Abhängigkeit außer Acht zu lassen.  Man denke an die allgegenwärtigen digitalen Plattformen von heute. Ein Grund, warum es nur wenige weltweit dominierende Akteure gibt, sind die Netzwerkeffekte: unabhängig davon, ob eine Plattform potenziellen Gästen Restaurantvorschläge bietet oder Nutzern ermöglicht, sich untereinander zu verbinden, gilt die Formel, dass es für alle Anwender am besten ist, je mehr Nutzer sich auf der Plattform tummeln. Den Rest des Beitrags lesen »

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Rethinking Productivity

Posted by hkarner - 6. November 2019

Diane Coyle is Professor of Public Policy at the University of Cambridge.

Today, about four out of every five dollars spent in the OECD economies purchases services or intangible goods. This “dematerialization” of economies demands a more nuanced understanding of what drives productivity.

CAMBRIDGE – The word “productivity” typically calls to mind industrial assembly lines pumping out cars or washing machines, breakfast cereal or shoes. The word may also conjure images of crops being harvested, livestock being butchered, or houses being built. It is less likely to elicit thoughts of haircuts, streaming television, or mortgages. Yet nowadays, it is largely these kinds of intangible goods and services that define economies.

Many economists equate “total factor productivity” with technological progress. Northwestern University’s Robert Gordon, for example, predicts that productivity growth will continue to slow – as it has done in most developed economies since the mid-2000s – because today’s digital innovations are, in his view, less transformative than earlier advances like the flush toilet, radio, and the internal combustion engine. Den Rest des Beitrags lesen »

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MIT on the Work of the Future

Posted by hkarner - 28. Oktober 2019

Date: 27-10-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

Automation fears have understandably accelerated in recent years, as our increasingly smart machines are now being applied to activities requiring intelligence and cognitive capabilities that not long ago were viewed as the exclusive domain of humans. While the majority of economists wave such fears away, we don’t really know whether this time might be different.

Tackling the topic, Massachusetts Institute of Technology President Rafael Reif last year convened a task force on the „Work of the Future“ to address what might be the most critical question of the digital economy: As emerging technologies raise aggregate economic output and the wealth of nations, will they also enable people to attain greater economic security and improved health and longevity?

The task force recently released an interim report concluding that the likelihood that AI and automation will wipe out major workforce sectors in the near future is exaggerated. However, we’ve already seen important reasons for concern, especially the rising polarization of employment and wage distribution over the past few decades, which has disproportionately benefited high-skilled professionals while reducing opportunities for mid- and low-skilled workers. Den Rest des Beitrags lesen »

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The Economics of Data

Posted by hkarner - 24. September 2019

By Yan Carrière-Swallow and Vikram Haksar

Look around the global economy and you’ll see an American company developing the next generation of driverless cars, a Chinese financier extending loans to “mom-and-pop” stores that used to lack access to credit, and researchers at a Swiss pharmaceutical company developing a treatment for a chronic health condition.

What do all these valuable economic activities have in common, despite taking place on different continents and in different sectors of the economy?

Had we asked the question of global firms thirty years ago, the answer would probably have been “not much.” But today, the answer is clear. They all rely on the same indispensable input: data. And lots of it.

Global cooperation is needed to ward off the risk that the digital economy becomes fragmented, with data access limited by national borders.

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China Will Live Or Die by Its Digital Economy

Posted by hkarner - 24. September 2019

Date: 23-09-2019
Source: The Wall Street Journal By Nathaniel Taplin

The digital economy is one of the few good options China has to keep growing rapidly

China’s dynamic, entrepreneurial information-technology sector is a reason for optimism.

For China, technological leadership is an existential question.

The world’s second-largest economy has a lot of problems: heavy debt, a rapidly aging population and increasing hostility from its largest trading partner, the U.S. Yet the nation’s dynamic, entrepreneurial information-technology sector is a reason for optimism.

Recent research from the International Monetary Fund highlights just how important this growth driver has become in recent years—and how critical keeping up the momentum is for the nation’s prospects.

Technological innovation is key to all economies, but the fate of China’s high-productivity IT sector has taken on outsize importance. One reason is the government’s failure in recent years—partly for ideological reasons—to make many key reforms which could boost the productivity of the rest of the economy and keep growth chugging along. Den Rest des Beitrags lesen »

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The Digitalization of the American Workforce

Posted by hkarner - 9. September 2019

Date: 07-09-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

Going digital has remade the American economy and the world of work. “And yet, for all of the evidence that big changes are underway, surprisingly little data exists to track the spread of digital adoption,” the Brookings Institution said in its Digitalization and the American Workforce report.

The Brookings report quantified the spread of digitalization by analyzing the changes in 545 occupations between 2002 and 2016 based on O*NET, or the Occupational Information Network, the most comprehensive database on U.S. occupations sponsored by the Labor Department. O*NET includes highly detailed, task-level information on hundreds of occupations. The 545 occupations Brookings studied accounted for 90% of the U.S. workforce. Den Rest des Beitrags lesen »

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Looking Ahead After a Quarter Century Into the Digital Age

Posted by hkarner - 21. August 2019

Date: 20-08-2019
Source: The Wall Street Journal By Irving Wladawsky-Berger

The digital age was born nearly 25 years ago with the public release of the Netscape browser in December 1994. The browser made it much, much easier for the average person to access information over the internet, sparking the explosive growth of users, websites and online applications. This was a truly historic point, marking the transition from the industrial economy of the past couple of centuries to a new kind of digital economy.

The McKinsey Global Institute recently published Twenty-Five Years of Digitization, a report offering 10 insights to help business leaders navigate this still relatively new digital world. Let me first list the 10 insights, and then briefly comment on a few of them.

Ÿ       Large economic potential is linked to digitization—and much of it is yet to be captured
Ÿ       Digital superstars are rising far beyond the U.S. big four and China’s big three
Ÿ       Digital natives are calling the shots
Ÿ       Digital changes everything—even industry boundaries
Ÿ       Agile is the new way to compete
Ÿ       Playing the platform economy can boost earnings
Ÿ        Self-cannibalization and innovation are a necessity for digital reinvention
Ÿ       Going after the right M&A is key
Ÿ       Effective management of digital transformation is vital—but challenging
Ÿ       Leveraging and transitioning from digital to new frontier technologies is an imperative

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