Implications of the Digital Economy on Policy-Making

Policy Studies, 2020

In an era where digital data is becoming an increasingly important element in the production of knowledge, wealth, and power, it takes radical solutions to ensure that digital data is not used to merely increase power and profits for the privileged. As the contributions to this Special Issue show, it also takes new regulatory approaches, institutions, and research fields to ensure that the political economy of digital data contributes to justice and wellbeing of people and societies. Rather than merely analysing the shortcomings of the current situation, we need visions and instruments to build new institutions: institutions in and through which human expertise, experience, and interaction are seen as equally important as high-tech precision; where new norms and policy instruments ensure that the benefits of data use accrue for society at large, and in particular for the marginalised and vulnerable; and where the datafication of the bodies, lives, and practices of people who have no realistic chance to opt out is recognised and condemned for what it is: robotic brutality (Mick Chisnall).

Visnyk of the Lviv University. Series Economics

. During the last decades, the world has entered the era of an information economy, in which knowledge, information, and services are more valuable than manufacturing. The key role in the development of such an economy is the large-scale implementation of digital technologies, which sharply reduce the costs of data storage, processing, and transmission. So, the analysis of these changes’ eff ects on the economic processes and economic agents’ decision-making is an important current task. J. Stiglitz was the fi rst to proclaim the transition to the information paradigm in economics. Current research in this sphere is focused on the analysis of digital markets effi ciency, pricing on digital marketplaces, peculiarities of consumer behavior in a digital world, prospects of successful price discrimination and targeted advertising on digital markets, the importance of feedback and reputation for digital marketplaces design. The purpose of the article is to examine the effects of digital technologies’ mass implementation on the different types of economic costs and economic behavior of individuals and firms. The widespread implementation of digital technologies caused a radical decline in diff erent kinds of costs in the economy, namely search costs, replication costs, transportation costs, tracking costs, and verifi cation costs. The important consequences of search cost reduction are the increased variety of products and lower prices for many goods and services, while price dispersion has persisted. One more fundamental result is the rapid development of digital marketplaces designed to help buyers and seller to fi nd each other. The task of improvement matching between buyers and sellers can be solved in two opposite ways: either by developing some kind of centralized assignment mechanism or by providing eff ective search procedures. To be successful, digital marketplaces should maintain an appropriate level of trust on market and make a tradeoff between two important objectives: effi cient use of all information available and keeping transaction costs low. As any digital activity is fi xed and automatically stored, the easiness of tracking all individuals’ online actions off ers promising perspectives for consumer behavior study and effi cient infl uence on it. The scales of information collected about consumer preferences and habits even today make possible successful price discrimination and highly targeted advertising. That also means an increased threat to consumer privacy because of potential personal data leaks. On the other hand, the reduction of tracking costs means that the identity of any person can be rather easily determined. This decline in the verifi cation costs can help to create new instruments of digital reputation. On e of the key prerequisites for digital marketplace success is the application and permanent improvement of effi cient feedback mechanisms using reputation scores. Summarizing, the large-scale implementation of digital technologies caused a sharp reduction in many important types of economic costs. The decline in search costs resulted in the rapid development of numerous digital marketplaces aimed to improve matching between sellers and buyers in diverse spheres of the economy. The reduction in tracking and verifi cation costs provided prominent opportunities both for consumer behavior advanced research and targeted infl uence on it, and for innovative mechanisms of market participants’ reputation formation. Keywords: information economy, digital technologies, information search costs, digital marketplace, information goods, tracking costs, price discrimination, verifi cation costs.

OECD Observer, 2017

Recent years have seen a rapid rise in digital transactions, notably through web-based "sharing economy" platforms that have bridged, and indeed blurred, the gap between consumers and producers. But this upsurge has also created new challenges for measuring GDP, and, against a backdrop of slowing rates of productivity growth, has led some to question whether the slowdown reflects these new transactions. The underlying activities related to consumer-to-consumer transactions, which characterise the so-called "sharing economy", are not that new. Households have long engaged in renting out their homes, offering taxi services and selling secondhand goods via the small ads in newspapers. Conceptually, GDP captures these activities and in practice countries have used a variety of approaches to measure them. However, these activities have generally been small scale in nature, and so the approaches used to measure them have tended to elude scrutiny. What is "new" is © Serpix

Journal of Social Policy, 2022

We undoubtably live in a digitally infused world. From government administrative processes to financial transactions and social media posts, digital technologies automatically collect, collate, combine and circulate digital traces of our actions and thoughts, which are in turn used to construct digital personas of us. More significantly, government decisions are increasingly automated with real world effect; companies subvert human workers to automated processes; while social media algorithms prioritise outrage and ‘fake news’ with destabilizing and devastating effects for public trust in social institutions. Accordingly, what it means to be a person, a citizen, and a consumer, and what constitutes society and the economy in the 21st century is profoundly different to that in the 20th century.

Technological Forecasting and Social Change, 2018

As revealed by Tapscott in his bestseller The Digital Economy published in 1994, the Internet has dramatically changed the way of conducting business and our daily lives. Further advancement of digital innovation, including cloud, mobile services, and artificial intelligence, has augmented this change significantly and provided us with extraordinary services and welfare never anticipated before. However, contrary to such an accomplishment, productivity in industrialized countries now confronts an apparent decline raising the question of a possible productivity paradox in the digital economy. The limitations of gross domestic product (GDP) statistics in measuring the advancement of the digital economy have become an important subject. While this mismatch is an old problem rooted in the dynamics of product innovations, since mismatch brought about by information and communication technology (ICT) is very strong, finding a solution to this critical issue has become highly crucial in the digital economy. Based on an intensive review of preceding studies and empirical analyses of national, industrial and individual behaviors in the digital economy, this paper attempted to draw a perspective on this critical issue. By means of an analysis of co-evolution among a shift in people's preferences from economic functionality to supra-functionality beyond economic value, the advancement of ICT and paradigm change to uncaptured GDP, a solution to this critical issue was investigated. New insights for measuring the digital economy were explored which provide insight into integration of national accounts with product-oriented micro-analysis efforts.

2020

Digitalization and Firm Performance, 2021

Milena Ratajczak-Mrozek and Paweł Marszałek discuss how digitalization and digital technologies are impacting markets, firms and financial institutions. They stress the need for adopting the interdisciplinary (taking into account not only economic, but also legal and social dimensions) approach in research on digitalization, as such approach provides a comprehensive view of the process, its manifestations, features and impact. The authors also identify six channels through which digitalization has had an impact on the economy. They argue that digitalization may be considered in the context of both challenges and opportunities set by digital technologies for business models and business operations and markets, as well as the main driver of growth and competitiveness for markets and firms/businesses. In this context, the authors introduce 10 chapters of the book and present the links between different level of analysis—micro, mezzo and macro.

2023

This short piece lays down some elements for a research and policy agenda concerning the taxation of data conceived as capital in itself. It notes that digital constitutionalism literature has so far overlooked issues of economic extraction and redistribution linked to so-called digital capitalism. Legal scholarship has long investigated the relationship between the digital revolution, social justice, and its surrounding political economy but few authors thematise these issues within a comprehensive constitutional-theoretical framework. Scholars using constitutionalist frameworks generally focus on issues such as access to the Internet; free speech online; privacy; procedural guarantees such as transparency, participation, fairness; digital administration and justice; and, more generally, the application of constitutional law standards to private powers. However, most works take the regulatory capacities of states for granted and few analyses combine the impact of digital technologies on the legitimation of political institutions with their capacity to pursue social justice goals. Moreover, constitutional lawyers hardly thematise the dangers coming from the excessive datafication of social relations as a self-standing problem. In contrast, this piece argues that scholars and policymakers need to address as part of a single research and policy agenda at least four macro-questions: 1) the negative impact of excessive, profit-driven datafication on modern societies; 2) the appropriate legal conceptualization of data for the purposes of the extraction and redistribution of its value; 3) the appropriate design of taxes targeting data; 4) the interaction of data taxation proposals with other legal regimes and entitlements and issues of social justice at the global level. In its final part, the paper points to some interrelated questions concerning each of these macro-issues, as building blocks of a comprehensive (economic) digital constitutionalism.

Microfinanza n° 40/2022 Anno X bimestrale issn 2282-099X., 2022

The historical passage we are going through is not described by the category of crisis but by that of Transition. The transition described by Transition is defined as that which indicates the advent of a new mode of value production. New factors of production grow and assert themselves, and new forms of interest protection claim their place in society. The new areas of value production are characterized by an incessant laboratory of start-ups where solutions, products and services that increasingly base their innovativeness on the digital technologies of Artificial Intelligence, Big Data, and Blockchain are being tested. These innovations seem to be pushing only towards the classic path of the production of 'goods' while the society of the coming years will need solutions capable of directly activating social bodies in the generation of the satisfaction of individual and collective needs. Precisely because of the quality of the Transition, public intervention to support it must be able to look at both needs.

2016