Introduction
My chosen job role and career path is that of a business manager. Business and marketing have come through a wide variety of changes since the arrival of the digital economy. Business and marketing ventures have been revolutionised completely. Continue reading to discover how the digital economy has impacted the role of a business manager in recent times!
What is the Digital Economy?
The digital economy is the complex whole of all combinations of public relations which have emerged through electronic exchanges and helped to optimise production, manufacturing, distribution, and consumption to increase the economic development of the region (Liferay, n.d.).
Business in the Digital Economy
Traditional business and marketing involve brick and mortar stores, and wherein there is direct tangible interaction between the seller and the customer. The influx of ICT in the realm of business has truly transformed the sector. There are new opportunities and value chains that traditional businesses could never afford! Before the digitalisation of the economy, businesses had to deal with the cost of infrastructure, staff employment, and investments in the maintenance of stocks. Small businesses had little to no scope for expansion (Molotkova, Khazanova, & Ivanova, 2019). However, the influence of technology has changed things completely.
All business and marketing ventures have adopted ICT to increase productivity, sales, and market reach, and to reduce any extra operational costs (Brauner & Moreno, 2015). The simultaneous increase in technological performance and decline in technological costs are leading to various changes in both the public and the private sector alike. Production processes are now globally dispersed so that a specific region can account for specific advantages. This is known as the cross-border relocation of production sites. New products and services are also emerging. Moreover, the method of sale of these products and services has also transformed!
For instance, my grandmother exclaims how she walked numerous miles to get a loaf of bread from the nearest market, whereas, I can order a loaf of bread with just a click of the finger while sitting at home! Even the payment mechanisms in business and marketing have evolved through digital currencies. Business managers are increasingly building their models, based on available technological capabilities to increase flexibility and to transcend the boundaries of conventional marketing by extending to the global markets. The apparent mode of advertising has also shifted. Through online advertising, a business manager can segment their target audiences with more precision. Online advertising also allows them to monitor the performance of the ads, which is not possible through conventional advertisement means. ICT is now the general-purpose technology utilised in all business models. For example, business managers now put customers in the center of their business strategy because customers are linked with technological implements. Customer experience has gained significance, as there is now a hyper-focus on customer satisfaction (Zimmermann, 2000). All of these changes have taken place after the liberalisation of trade policies and the subsequent globalisation of business and marketing across the world.
Scope of Change – Digital Economy and Business in the Future
Nearly every economist agrees that the influence of the digital economy on business and marketing will only increase in the coming years because technology is speedily gaining precedence in the production and distribution process.
Specific expected changes in the functioning of business enterprises, according to Petersen are:
- The complete robotisation of the labour force and sharp falls in production costs, because there is no intermediary labour force employed in the production process that would require daily wages.
- The complete collapse of traditional market players in response to the rising competitive advantage of digital businesses. All those businesses that fail the process of digital transformation will lose their competitive edge and slowly disappear
- Creation of a new and innovative standardised business model with no role of middlemen
- Redistribution of global prosperity owing to the shift in the advancement of digital technologies across the globe. This will also lead to a change in the poverty and social capability disparity.
- Greater development of cloud computing, which includes configurable online services available for computing, storage purposes, and data management.
- Chances of ‘leapfrogging’ in under-developed countries because of technological revolutions. For instance, a poor country having no telephone services can be seen directly jumping to the establishment of mobile networks because it is at par with the technologically advanced industrialised countries of the west (Petersen, 2019).
Many more changes are yet to arrive in the business and marketing scene. At the same time, many changes are expected in the technological realm as well! The ICT world is continually evolving, and newer methodologies of applied science are emerging daily. Hence, there is a vast scope for the development of business and marketing in the digital economy even now.
Conclusion
Business managers have successfully established their enterprises through significant investment in research and development of the opportunities provided by the digital economy. The fast-paced digitalisation of businesses has allowed business managers to bring innovative ideas into action and continuously evolve and evaluate business models to leverage their current position and steer towards growth and development in the global market. Furthermore, there is also a strong realisation that chances of further change and development also exist within the business and marketing sphere.
References
Brauner, Y., & Baez Moreno, A. (2015). Withholding taxes in the service of BEPS action 1: address the tax challenges of the digital economy. WU International Taxation Research Paper Series, 14.
Liferay. (n.d.) “What is Digital Business?” Retrieved from https://www.liferay.com/resources/l/digital-business
Molotkova, N. V., Khazanova, D. L., & Ivanova, E. V. (2019). Small Business in Digital Economy. In SHS Web of Conferences, 62, 04003. EDP Sciences.
Petersen, T. (2019, September 13). “Digital Economy: How is digitalisation changing global competitiveness and economic prosperity?” Global Economics Dynamics.Retrieved from https://ged-project.de/blogpostsen/digital-economy-how-is-digitalization-changing-global-competitiveness-and-economic-prosperity/
Zimmermann, H. D. (2000). Understanding the digital economy: Challenges for new business models. Zimmermann, Hans-Dieter,” Understanding the Digital Economy: Challengers for New Business Models”(2000). AMCIS 2000 Proceedings. Paper, 402.
Shuo Tan 