206
10 The Economy 4.0
while those which engage in a fair partnership with their customers will thrive. Therefore, we will see a shift from a company-centric market to a user-centric market.
16
Cooperative networks between consumers and producers will also play an increasingly important role for providing the information that is necessary to create better
services and products.
This trend towards more personalized and individually customized products will
create a “hyper-variety market”. In fact, the digital economy will open up a vast
array of business opportunities and new product categories, as the information age
unleashes a wave of creativity. The possibilities to produce creative products such
as music, news, blogs, and videos will be endless. The current growth in the market
for smartphone apps and virtual goods and services is a harbinger of this potential.
For example, every minute, more than 500,000 posts are published on Facebook.
Moreover, there are now more than half a million smart phone apps in existence
and about as many app developers in Europe. In 2013, Apple alone generated more
than $10 billion dollars in revenue for developers through its AppStore. In December
2013, more than three billion apps were downloaded.
This has very interesting implications for the future structure of markets. While
today, we have a few monopolies or core businesses and some peripheral business
activities, it is likely that peripheral products will become increasingly important
in future.
17 This doesn’t mean that large companies wouldn’t grow any further. We
should rather imagine this transition like a digital desert turning into a digital rain
forest, where species of all kinds and sizes coexist.
18 This transition will benefit from
a number of facts: First, in the emerging “zero marginal cost society”,
19 producing
copies of a digital service or product is cheap, and creating more copies doesn’t cause
much higher costs. Second, it is important to realize that the digital economy isn’t
a zero-sum game, where one can only gain when others lose.
20 Therefore, besides
getting rich by cutting costs and rationalization, where immaterial (informationbased and cultural) goods are produced, co-creation and social synergy effects
offer a second way of creating value. Third, participatory information platforms
can act like “catalysts”. In some sense, they are the “humus” fueling the evolution of a thriving digital information, innovation, production and service ecosystem.
Such digital ecosystems enable exponential innovation (rather than producing a new
version of a certain product every few years, as we often have it today). To allow this
exponential innovation to happen, we need interoperability and suitable intellectual
property rights (IPR) (see Appendix 10.1). Even the G8 Open Data report points
16 This also implies a transition from a push economy to a pull or “on demand” economy.
17 One may visualize this by representing today’s core businesses by the core of a sphere and
peripheral businesses at its surface. Interestingly, the relationship between the surface area A of
an n-dimensional sphere of radius r and its volume V is V = rA/n. Therefore, the higher the
dimensionality n of a market, the more economic activity happens at the surface, i.e. in peripheral
businesses!
18 See https://horizon-magazine.eu/article/open-data-could-turn-europe-s-digital-desert-digital-rai
nforest-prof-dirkhelbing.html.
19 Rifkin [7].
20 Wright [8].
10 The Economy 4.0
while those which engage in a fair partnership with their customers will thrive. Therefore, we will see a shift from a company-centric market to a user-centric market.
16
Cooperative networks between consumers and producers will also play an increasingly important role for providing the information that is necessary to create better
services and products.
This trend towards more personalized and individually customized products will
create a “hyper-variety market”. In fact, the digital economy will open up a vast
array of business opportunities and new product categories, as the information age
unleashes a wave of creativity. The possibilities to produce creative products such
as music, news, blogs, and videos will be endless. The current growth in the market
for smartphone apps and virtual goods and services is a harbinger of this potential.
For example, every minute, more than 500,000 posts are published on Facebook.
Moreover, there are now more than half a million smart phone apps in existence
and about as many app developers in Europe. In 2013, Apple alone generated more
than $10 billion dollars in revenue for developers through its AppStore. In December
2013, more than three billion apps were downloaded.
This has very interesting implications for the future structure of markets. While
today, we have a few monopolies or core businesses and some peripheral business
activities, it is likely that peripheral products will become increasingly important
in future.
17 This doesn’t mean that large companies wouldn’t grow any further. We
should rather imagine this transition like a digital desert turning into a digital rain
forest, where species of all kinds and sizes coexist.
18 This transition will benefit from
a number of facts: First, in the emerging “zero marginal cost society”,
19 producing
copies of a digital service or product is cheap, and creating more copies doesn’t cause
much higher costs. Second, it is important to realize that the digital economy isn’t
a zero-sum game, where one can only gain when others lose.
20 Therefore, besides
getting rich by cutting costs and rationalization, where immaterial (informationbased and cultural) goods are produced, co-creation and social synergy effects
offer a second way of creating value. Third, participatory information platforms
can act like “catalysts”. In some sense, they are the “humus” fueling the evolution of a thriving digital information, innovation, production and service ecosystem.
Such digital ecosystems enable exponential innovation (rather than producing a new
version of a certain product every few years, as we often have it today). To allow this
exponential innovation to happen, we need interoperability and suitable intellectual
property rights (IPR) (see Appendix 10.1). Even the G8 Open Data report points
16 This also implies a transition from a push economy to a pull or “on demand” economy.
17 One may visualize this by representing today’s core businesses by the core of a sphere and
peripheral businesses at its surface. Interestingly, the relationship between the surface area A of
an n-dimensional sphere of radius r and its volume V is V = rA/n. Therefore, the higher the
dimensionality n of a market, the more economic activity happens at the surface, i.e. in peripheral
businesses!
18 See https://horizon-magazine.eu/article/open-data-could-turn-europe-s-digital-desert-digital-rai
nforest-prof-dirkhelbing.html.
19 Rifkin [7].
20 Wright [8].