The Digital Era 2

Political Economy Revisited

Jean-Pierre Chamoux

• Publisher: Wiley-ISTE
• Year: 2019
• ISBN:
  9781119585756
• Edition: 1
• Topic: Sozialwissenschaften
• Subtopic: Popkultur

Over 200 years, industry has mastered iron, fire, power and energy. Today, electronics shape our everyday objects with the widespread integration of chips; from computers and telephones to keys, games and white goods. Data, software and computation structure our behavior and the organization of our lives. Everything is translated into data: the digit is king. Consisting of three volumes, The Digital Era explores technical, economic and social phenomena that result from the generalization of the Internet. This second volume discusses the impact of digital technology on the evolution of market relations and the media and examines the reasons why such changes put political economy to the test.

PART 1
A Disruptive Economy

Introduction to Part 1

Digital devices and services are sufficiently well known today that they do not need to be described in detail. Personal experience is enough. On the other hand, the growth of applications and the great variety of concrete situations that flourish in all directions require careful analysis in order to identify and understand the mechanics of change brought about by new means of communication and trade. Their influence is growing rapidly, with more intensity than one would have believed a few years ago. The society at large reacts very strongly to disruptions, even if many activities adapt under the pressure of necessity.

This first part of the volume seeks to distinguish the nature, ways and means of change brought about by the digitization of operators and that of economic circuits. The three chapters deal respectively with business transformation (Chapter 1), media (Chapter 2) and the new class of intermediaries that is called digital platforms (Chapter 3).

In Chapter 1, Godefroy Dang N’Guyen discusses the problems brought forward to companies by the multiplication of networks, procedures and relationships using digital instruments. A first disruption concerns the market, competition and customer approach: in these three areas, information processing, distance communication and services available on the Internet force companies to change their practices and act imaginatively. The author points out that transition to digital processes favors imaginative, adaptive and reactive companies, including, someday, the digital supporters of tomorrow. In industry, traditional routines are also put to the test, which sometimes requires profound organizational and managerial adaptations. Often governed by rules of public order, corporate practices are put to the test by new digital operators who disrupt social relations, as is the case with taxis and tourist accommodation; this phenomenon, known as uberization, which has become common parlance, provokes strong reactions. Digital technology also requires in-depth reflection on firms’ relationships to their environment: geographical proximity is being overrun by the rules of cyberspace that are defined by social networks and platforms, which blur many references. In conclusion, the author suggests that beyond the adaptations of individuals, certain institutions can also be called into question, which implies a possible mediation by the public authorities.

Chapter 2 expands on the media. All aspects of the media are deeply shaken by the emergence of digital procedures and tools. Jean-Paul Simon particularly focuses his attention on four of them: writing, audiovisual media, music and games. Newspapers and magazines, which had been altered very early on by computerization, were disrupted as early as the 1980s because digital technology had already altered press production, writing, distribution and management. After the generalized incursion of computerization in editorial offices and in printing shops, the uses of the press have again been subdued today. The author notes that major changes have also affected other media, but that the redistribution of tasks and relations between producers and consumers have not had the same disruptive effect everywhere. The appearance of a class of self-producers has marked several areas such as games and music. In 10 years, the content produced by users has even imposed profound restructuring in certain cultural industries because of the Internet. However, that surprise aside, it seems that professional practices have absorbed the shock, especially in video games, and that media companies are adapting, a slope they have been climbing for some time, just as we have seen for recorded music. The author suggests that the digital shock was therefore sometimes beneficial. The crisis of adaptation seems to be calming down, with the notable exception of the press, whose future looks quite bad due to the trauma imposed by the fall in advertising resources and the head-on competition from platforms that overtake on readership and advertising resources, thanks to the redistribution of advertising budgets which are drying up the newspapers’ resources. Lastly, a few poles of creativity are reviving the audiovisual scene, in which self-production remains of secondary importance.

Chapter 3 looks at the new intermediaries that are Internet platforms, a number and variety of which are changing entire areas of commerce and distribution. Stéphane Grumbach describes the empirical laws that characterize platform economics; he highlights their profound influence on market organization and resource management. Taking advantage of the numerous traces left by buyers, sellers and curious individuals on the platforms, the operator of these services can multiply the opportunities for targeted meetings; they thus improve the probability of concluding transactions on one or another of the markets that they lead; they match customers, suppliers and platform auxiliaries in order to instigate usage. The exploitation of traces left by users is an “over-the-top” operator privilege. Implicit rules allow them to take advantage of it and to value the mass of formless data that they handle. Bringing two unknown parties closer together is then child’s play for those who are experts of big data. The experience acquired and the wide market coverage give a significant advantage to very large operators who are becoming dominant, just like Google for search engines and Amazon for distribution.

Platforms, digital media and new-look companies are attracting more and more new talent to the new economy. It thus seems, interpreting the following contributions, that digital disruption is not ready to stop!

Introduction written by Jean-Pierre CHAMOUX.

1
Companies: the Great Transformation

Closely integrated into the vast majority of economic activities, digital technology is disrupting habits, transforming the market approach and profoundly modifying industrial organization. This a microeconomic debate, since digital mastery allows new entrants to approach customers directly, a way of being that companies have rarely experienced: the new digital economy is thus giving rise to imaginative and adaptive companies that are breaking from the past. Entire sections of commercial activity like big hotel chains are, therefore, forced to question their own organization and their priorities in order to stem the losses suffered by their customers captured by digital platforms that are specifically built for the web.

Initially insidious and with a marginal effect, the disruption introduced by digital technology is now plainly noticeable; one may describe the disturbances that destabilize the previous trade balances as a disruption, particularly for these services that have long lived under a regulated regime such as transport, housing or distribution to the general public¹. A real disruption is much more disturbing for our habits than was the “new economy” that was promised by records at the end of the 20^th Century before being [wrongly!] forgetten after the Internet crisis, which befell the United States and the industrial countries around the year 2000²! As a direct consequence of digital technology, a transformation is underway that must be clearly understood before the next steps are to be considered!

During 2014, three consultative reports [MCK 14, ROL 14, LEM 14] reflected the same antiphon, that of French companies falling behind in digital transformation. Although their perspective differed somewhat, their conclusions were fairly homogeneous: at that time, French companies had not yet grasped all the potential benefits of digital technology. As a result, this was and still is translated into missed opportunities, unrealized growth and job creation potential. Roland Berger put five conclusions forward, three of which are worth mentioning here:

• – the most digitally advan...

Table of contents

• Cover
• Table of Contents
• Note to Reader
• Preface: Assessing Digital Society
• Introduction: Political Economy Under Pressure
• PART 1: A Disruptive Economy
• PART 2: New Perspectives
• Conclusion: Wealthy Nations, Healthy Global Firms
• Appendices
• List of Authors
• Index of Names and Brands
• Index of Notions
• End User License Agreement