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Operating a business in the digital economy

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Presentation on theme: "Operating a business in the digital economy"— Presentation transcript:

1 Operating a business in the digital economy
Challenges, opportunities and skills Presentation by Felix Ritchie Professor of Applied Economics Director, Bristol Centre for Economics and Finance 26th january 2017

2 Contents Big changes Little or no change Markets Employment Skills
geography basic good business

3 Markets – who gains? Businesses that can exploit information
initially, at least… Who has benefited? firms who can exploit information margins reduced by pricing information consumers gain at expense of producers firms looking to service the ‘long tail’ spammers digital product development times reduced digital inputs and outputs free of geography Internet changes calculations of return Free-at-point-of-delivery models Possible to identify and service ‘long tail’ Spam is cost-effective…

4 Markets – who gains? Businesses that can exploit information
Businesses that can exploit behaviour Who has benefited? firms who can exploit information margins reduced by pricing information consumers gain at expense of producers firms looking to service the ‘long tail’ spammers digital product development times reduced digital inputs and outputs free of geography Internet changes calculations of return Free-at-point-of-delivery models Possible to identify and service ‘long tail’ Spam is cost-effective…

5 Markets – who gains? Businesses that can exploit information
Businesses that can exploit behaviour Businesses servicing the ‘long tail’ Who has benefited? firms who can exploit information margins reduced by pricing information consumers gain at expense of producers firms looking to service the ‘long tail’ spammers digital product development times reduced digital inputs and outputs free of geography Internet changes calculations of return Free-at-point-of-delivery models Possible to identify and service ‘long tail’ Spam is cost-effective…

6 Markets – who gains? Businesses that can exploit information
Businesses that can exploit behaviour Businesses servicing the ‘long tail’ In the long run: consumers/purchasers Who has benefited? firms who can exploit information margins reduced by pricing information consumers gain at expense of producers firms looking to service the ‘long tail’ spammers digital product development times reduced digital inputs and outputs free of geography Internet changes calculations of return Free-at-point-of-delivery models Possible to identify and service ‘long tail’ Spam is cost-effective…

7 Employment Are computers replacing humans? In the long run, no
Recent conventional wisdom: machines… replace ‘repetitive’ workers augment ‘creative’ workers True in the future…? ‘Computer’ jobs versus ‘human’ jobs expert systems doing the jobs that were thought to need human skill/insight received wisdom: technology replaces manual workers and enhances service workers no longer true? Longer term – technology enhances productivity and growth – does that help in short term?

8 Employment Are computers replacing humans?
Opportunities for flexible employment or risks, for employer and employee? in the long term, integration seems to have the advantage Do you have employees, and if so, how many? sure? Digital assets are mobile how much do you trust your employees?

9 Employment Are computers replacing humans?
Opportunities for flexible employment How trustworthy are your staff? Do you have employees, and if so, how many? sure? Digital assets are mobile how much do you trust your employees?

10 Skills Education levels increasing across the world
is this education well targeted? good news: training older workers now less of a problem bad news: we don’t know how young people learn At UWE, aim to give students practical skills eg training in Office tools, lots of practice at presentations and group work But is our education system suited to this? Evidence that young people learn very differently

11 Skills Education levels increasing across the world
is this education well targeted? Do we still need to instill ‘knowledge’? are analytical skills more important? It seems likely that the ability to analyse information correctly is becoming more important than finding it

12 What isn’t changing? Geography matters, even for digital goods

13 What isn’t changing? Geography matters, even for digital goods
businesses still cluster trading networking employing training reputation ie production advantages Becoming even more important as market advantages disappear?

14 What isn’t changing? Geography matters, even for digital goods
Basic business rules even digital products need a market

15 What isn’t changing? Geography matters, even for digital goods
Basic business rules Surprisingly little, conceptually but digital economy changes scale and speed of business

16 Summary Reasonable idea of who the commercial gainers and losers are, in short and long term so far Lot more uncertainty about employment and business structure Uncertainty about future skills but likely to value adaptability skills analytical skills


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