(10 minute read)

When I speak to a variety of audiences on the changing global landscape of digital technologies, I often provide a brief summary of a few tech related pick-ups that I think have been a common feature over the past few years. As with most things tech, many of these are apt to change rapidly but some of these key features have tended to remain constant. 

For more in-depth insights, I like to push my audiences to understand the many ways in which technology is changing the global economy and creating several connected New Economies. I often find that my older audiences, from mature MBA students to clients, conference delegates, or policy makers, are more focused on areas such as automation, B2B e-commerce, and machine learning. In contrast my younger audiences like undergraduate students or school leavers are more familiar with the practical implications of mobile and social as these are closer to their own daily experiences.

As a speaker and educator I find it rewarding to bring together these assorted ways of thinking and get my audiences to understand how these new economies thrive and co-exist thanks to technology developments and the changing nature of marketplace transactions.

Global B2B E-Commerce

The global B2B e-commerce market is valued at around US$13 trillion (2019 figures) and outperforms comparative B2C market figures 6 times over. It accounts for over 90% of all global volume transactions including stock exchanges, global commodities markets, trading on metals, minerals, oil and gas futures etc. Much of this dominant area of e-commerce is entirely a ‘machine and technology-intense’ environment that runs with very little human support. EDIs, automated systems, AI, and machine learning feature prominently in managing global purchase, procurement, tendering, supply, logistics, distribution chains, manufacturing, and payment systems while smartphones, email, and apps are also increasingly in use. This is a marketspace and economy that most people don’t see, that is not very visible to the general public. This is a world dominated by cloud, Big Data analytics, and global interchanges.

Unsurprisingly it’s the Asia-Pacific region that is leading the way with a market share of over 80%, leaving North America and Europe far behind. Amazon Business and Alibaba are some of the biggest players in this market.

Social and Mobile Economies

Social and mobile economies, more familiar to my younger audiences, are made up of over 5 billion socially networked people worldwide who connect digitally, and buy, sell, and transact over their social networks as a matter of course. They seamlessly move across smartphones, apps, and social networks to create ‘digital marketplaces’ with endless market opportunities that blend online, offline, social, virtual, and mobile commerce. This marketspace impacts tremendously on a variety of consumer packaged goods, financial and professional services, and even advanced manufacturing.

What drives this even more is the insatiable appetite for mobile subscriptions from developing economies and a rapidly expanding middle class with growing purchasing power. Many large firms in turn including tech giants like Google, Apple, and Amazon are driving heavy investment in mobile infrastructure and wireless connectivity in these regions. A country’s mobile infrastructure is considered just as if not more important than its energy or transportation grid networks.

New Ways of Understanding:

One interesting feature to emerge out of developments in new economies is how they’ve transformed our understanding of basic ideas like money, markets, and marketplace exchange. Traditional, fiat currency now competes with new forms of money like digital, virtual, and cryptocurrencies, ‘money’ issued by Big Tech firms, and even crowdfunding, loyalty points, and social media following. The internet has fostered a renewed growth in online bartering systems. Cash and traditional payment forms are slowly being phased out and replaced by the growth in online payments and mobile digital wallets.

What is also striking is the convergence of different types of ‘money’ and monetisation, such as online reviews, ratings, social media following, money earned within apps, MMORPG, virtual games that can be ‘converted’ into cryptocurrency, PayPal cash, Amazon points etc.

It is also remarkable how well these new economies have evolved to accommodate a wide range of new forms of markets and marketplace exchanges. Market transactions are increasingly not always about purchase and possession. Ownership patterns are changing in favour of rentals, and monetary transactions are supplemented by bartering and other non-monetary methods exchanges including peer-to-peer sharing. Much has already been written about the Sharing or Collaborative Economy that doesn’t need repeating here. What makes these economies thrive however is the central role played by digital technologies which enable consumers to come together to collaborate and co-create consumption and peer-to-peer market opportunities. The emergence of big brands like Uber and Airbnb challenge traditional industries but also throw up new ideas for regulation.

This creates new challenges for businesses as well as opportunities. The sharing or collaborative economy brings together multiple users to connect and network on a platform, run by start-ups or dominant eco-systems. This has given rise to the Platform Economy where multiple types of intermediaries come together to connect, collaborate, and create value.  It also changes the rules of the game in competitive strategy and network effects. It signals a shift from the traditional pipe model of competitive advantage to a flatter, more collaborative platform model of competitive strategy and advantage, and has huge implications for business strategy, resource uses, and capacity monetisation.

The ideas I have summarised in this piece and the one on the global landscape is intended to provoke discussion and exchange among audience participants and get them to understand the far-reaching implications of technology in the modern world.