19-04-2023 16:00 EKONOMİ

Internet Economy

Internet Economy


Beginning with the privatization of the Internet in the United States in the mid-1990s, networks have grown at an accelerating rate.


This deployment was accompanied by a wave of innovation in information technology. At the same time, many online services and new business models have emerged in many application areas.


At the same time, the common ground of these two developments, the United States of America, experienced unprecedented growth. This merger has changed the way some view the Internet.


It started around companies involved in the Internet. It was later adopted as a new growth regime called the new economy that helped the internet grow.


At the same time, there were many comments regarding the use of information and communication technologies (ICT). The predictions of a number of economists who emphasized that information goods and services did not lead to an improvement in microeconomic performance were subsequently confirmed.

 These estimates cannot escape the ground rules of the economy and the fact that American growth in the 1990s was not necessarily based on the innovations associated with the use of ICT.


However, these analyzes do not claim that nothing has changed with the large-scale spread of digital networks and their associated applications.


Expanding on older reflections, they point out that ongoing changes are slower and more complex precisely because they have a fundamental nature.


Digital technologies are general technologies whose effects on economic performance are linked to changes in practice in all aspects of economic and social life.


Consumption standards, forms of production, forms of organization, etc. Like the great inventions of the late 19th century, these technologies will turn the economy upside down. It will also accelerate growth in the long run and change the face of society.


In this long-term perspective, the Internet is at the crossroads of two already ancient histories:


• First, the history of telecommunications networks that were created in the 19th century and became electronic in the second half of the 20th century;

• Second, the history of computers born during the Second World War.

The changes in societies under the influence of these technologies began long before the emergence of networks. Therefore, it does not mark the beginning of the transformations associated with ICT.


On the contrary, most of the trajectories of change have only just begun. It is therefore premature to think that the Internet has produced a result. It is difficult to comment on the final outcome of the still emerging and unstable movements.

However, the Internet and, more generally, digital networks have certain characteristics: circulation and processing of information, market operations, organizational coordination, network management, etc.


The purpose of this series of articles is to highlight what seems truly innovative on the Internet, both in terms of economic applications and analytical concepts.


From the 1980s, telecommunications networks have been involved in the management of public services, regulation of competition, design of network services, etc. created an area where new applications take place.


Competitive market, criteria competition, incentive pricing, etc., which are then applied to all industries. concepts emerged. Similarly, the Internet today gives rise to innovative applications that require renewed conceptualizations.

Three main reasons contribute to explaining this dual role of practices and theories.


First of all, the Internet does not support technical potentials, especially very different information management. Digitization is nothing but a planetary federation of digital networks.


This provides access to interconnected and flexible information. It encourages economic players to increase the information density of their services and to increase their exchange of information.


It then makes it an example of contemporary economies in a globalized space, serving as a support for knowledge and innovation-based services.

Finally, organizational innovations brought about by the digital networks brought together by the Internet are gradually spreading throughout the economy.


We mention that one of the main features of the Internet is the very fine filtering of the information used. Moreover, this management can be completely decentralized using interface standards.

This duality underlies both the uniqueness of the Internet as a network and the authenticity of the digital economy it supports.


Other frequently mentioned features, such as the global and multimedia nature of the Internet or its impact on information costs, are certainly important. But they probably wouldn't in themselves justify our showing such a marked interest in the Internet economy.


So, what awaits you in our next articles :)


This series of articles is divided into three important parts. In the first, we will touch on some principles and factual elements to better understand the nature of the Internet network and the challenges it represents for economic activity.


Next, we will reveal the connection between the internal morphology and economy of the Internet network and the new types of relationships and exchanges that accompany its development. We will try to identify what we call the term "Digital Economy".

We will show that this link is more a matter of generation than causation.


In other words, we will move beyond seeing the Internet as just a support technology, a determining factor for a new type of economic development.  It would be much more efficient to analyze these connections.


The Internet economy is at the root of the future digital economy, where the capacities to manage information in a decentralized and personalized way will be used on a large scale.


Finally, we will look at the research program triggered by the multifaceted development of the Internet network and the accompanying emergence of a digital economy.


Stay tuned to read our other articles on this subject :)

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