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The Digital Economy

The economy is being transformed through the continuous advance of technology. This new digital economy that arises from this junction is causing big shifts in the world economy.

To segment this big topic, we can cluster the subjects into five categories and we will present each one with a brief explanation:

1- Value Propositions

Everything that can be digital, will be digital. A whole class of products will be digitized. Music, video, maps and currency are some examples. An even broader class of products will be hybrid, part physical and part digital. Products will be augmented with digital apps to provide digital services. Subscription based models will be standard, as they provide a continuous stream of income in contrast with the sale of a single physical product. Products' adoption and life cycle will change with the rapidly evolving digital technologies. Though the pace of adoption of products is shorter, also is their life cycles. The concept of possession of a product will shrink, as digital products need not be owned to be used and physical products can be shared with the help of technology. Personalization of products, through 3D printing, and of the delivery process will allow much more flexibility for the customer.

2- Customer Segments, Customer relationships and Channels

Transparency is another trend, as there are lots of technical information about products and customers' opinions about them online. Today, trust and reputation are vital, as social media gives each individual a voice that can be heard by all. Digital is the new normal. People are already used to look for easier ways to shop and the entire process must be redesign to meet customers' needs and expectations. In digital economy, flexibility is everything. Specially when it comes to time and place. People are not interested in what others want to show them, they want to find what they are interested in. Online channels also favor a direct-to-customer strategy, eliminating intermediaries from the value chain.

3- Key activities and Key Resources

Manual work tends to disappear as they are automated/robotized. This allows less error prone processes and 24*7 operation with lower costs. Jobs with new skills and competences will emerge, such as those that work with data and analytics. Mobile solutions cause information and processes to be available at the time and location they are needed. That helps companies to put the right people and assets in place with short times. This is crucial as in the digital economy the main focus is no longer efficiency, but the ability to adapt products and services quickly to stay ahead of competition.

4- Key Partners

In the digital economy, a new economic landscape is emerging with two trends: fragmentation and concentration. Fragmentation focuses on niches, while Concentration provide infrastructure, platforms and services for fragmented niche players. Fragmentation and concentration reinforce each other because when combined they reduce exponentially cost and performance of digital technologies.

5- Cost Structure and Revenue Streams

New business models for revenue streams, like advertising based services and digital products, subscription and pay-per-use programs to allow users to consume digital content and services, and data monetization as behavior and preferences of users are collected while they use one's programs or services.

The use of digital technology with personal computing power improved B2C transactions and communications, and it lowered information management and collaboration softwares costs by replacing manual work.

A fundamental difference between the digital economy and the physical economy is the widespread availability of free content and services. Only a part of all value that is created in the digital economy is paid for by users. Digital content and services have very low marginal costs and they are often a key element of the business model. The question of which content/services is provided for free and which is paid-for is one of the main strategic choices for digital companies.


Nobiletec is a multi-national consultancy firm specializes in B2B, B2C and P2P FinTech solutions.

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