Blueprint to the digital economy

The digital economy is causing major realignments across industries, with entire sectors merging together and evolving into new, hybrid business models. Banks and Financial Services

The nature of banking is rapidly evolving in response to new technologies. The fundamentals of banking are shifting as institutions start competing with non-bank companies, organize around global rather than regional markets, seek new ways to provide greater value to customers, and focus more on information products rather than simple transactions.

Publishing

While publishing may seem threatened by the digital economy, the industry also has an unprecedented opportunity to leverage the internet to improve its position. Key changes include moving from an emphasis on reach to providing valuable services, allowing consumers to choose content rather than editors, continuously updating information instead of fixed deadlines, prioritizing context over content through links, gathering more data on users, becoming gateways to communities of interest, building global specialized audiences unrestricted by geography, earning trust and authority by capitalizing on existing brands or launching new ones, and adding value by contextualizing information.

Imaging

Since images can now be digitally captured, edited, and transmitted, it may appear that film and analog photography will become obsolete. However, film remains an extremely cost-effective means of storing visual information at scale compared to digital formats. A hybrid model may emerge where images are initially captured on film, then scanned and distributed electronically. This would apply across key imaging uses like information, memories and personal sharing, and entertainment. Companies like Kodak are establishing new standards, licensing proprietary technology, and developing integrated solutions to smooth the transition. While digital cameras will displace film for some uses, conventional cameras will likely remain the choice of most mainstream consumers for years to come.

The main challenge facing a digital business is finding the best infrastructure, technologies and applications. This search can be guided by several key themes. First is understanding the conceptual model for computing in the Information Era. This era didn't begin with the transistor or computer, but will start when information access becomes inexpensive and simple enough for anyone. Internet access doesn't yet meet that criteria since less than 3% of the population uses computers. The solution is network computing where anyone can access information networks through devices as easy to use as a phone or TV, combined with computer and device access. In network computing, anyone anywhere can create, store, exchange and share information with others using intuitive software. Data and applications are stored on large central servers while users only need a network connection and web browsing ability. Network computing is based on the idea that personal data and manipulation ability is more valuable than the gathering and storage technology. So it focuses on the data rather than the technology debates. Network computing will be operating system, hardware and application independent - able to encompass any system, hardware or application. Many specialized and general information appliances will join the network too. Barriers hindering information network growth will be resolved as benefits become clearer and more compelling. The information era hasn't really begun yet - once network computing reaches fruition, business and society changes will be impressive.

The second key theme is the need to bring partners, suppliers and customers together to serve them better. Historically, competitive advantage was exclusive as companies that had it stopped competitors copying. In the digital economy, the greatest advantage goes to inclusive companies using technology to bring partners, workers, suppliers and customers together seamlessly to create customer value. This is the internetworked business model, including intranets, business-to-business extranets and the Internet as suited. This model aligns supply chains as transactions, markets, channels and processes converge in the digital economy. A robust three layer infrastructure is required. The top layer has electronic business solutions for consumers - collaborative processes, e-commerce and e-publishing. The middle layer has enabling technologies to fuel Internet growth - security, management and process systems, imaging, payments. The base layer has network platforms and devices for interconnection - servers, browsers, web devices, scanners and routers. Early corporate intranets were popular because they centralized information flow, reduced solution development time and provided cost savings. The internetworked enterprise challenge is moving from closed to open Internet-based networks, freeing competition potential. This completely rewrites business competition rules.

The digital economy will fundamentally transform the nature and practice of government in two critical ways. First, the availability of technology to efficiently collect, process and disseminate information will impact how governments carry out core functions like maintaining national security, providing infrastructure and public services, enforcing laws, ensuring access to education, promoting economic development, assisting with disaster relief, and protecting the environment. In fact, the role of government will likely change more in the next 10-20 years as the digital economy matures than it has in the past 200+ years. With bottom-up organization and information empowerment of citizens made possible by technology, governments could become more cost-effective and responsive by ensuring people have access to information while otherwise staying out of their way. However, it is difficult to predict exactly how technologies will develop and be used over time. While wonderful aspects like openness and resistance to regulation underlie the internet, users must help police their own digital neighborhoods by checking facts, confirming sources, and not automatically believing everything they see online.