DIGITAL ECONOMY
Instructional goals
The aim of the course is to:
-review of the economic literature
-extrapolate conceptual economic model for Digital and AI Industry
-measure how/ how much Digital and AI impacts in the economic systems.
The ubiquitous nature of the Digital technologies makes its modeling and evaluation of the impact a matter of great interest ( both academic and industrial ) but also very complex and difficult to analyze.
A new framework of analysis of the Internet industry named :the LIIF Framework
. This conceptual framework represents Digital Economy and in particura Internet technologies as a meta-platform, multi-layer, an ecosystem where a variety of specialized platforms are created and could evolve , within the different layers that make up the ‘Digital Industry".
Intended learning outcomes
The student will ;
- know and understand the key digital market mechanics
-apply aquired knowledge to specific digital business case
-be able to use ols and theorical concepts in order to analyze digital markets
-be able to use the discipline terminology and apply to a digital business case
-develop the Learning and critical capabilities in order to update and deepen the digital economy knowledge
Course Contents
The organization of the course includes the study of the Digital Economy on several dimensions:
• The Distinctive Features – what are the distinctive features that have made the Digital Economy as an Internet centered platform different from the others technological systems and the evolution and the social impact from its origins to the present . with an analysis of current developments and and future developments .
• The Demand – Key dimensions for measuring the demand for Digital Economy in each layer of the framework LIIF, trying to capture the salient aspects that explain the rapid growth and success of the web, and specify the Online industries characteristics as well the economic weight of Digital Economy in respect of largest economies GDP
• The Supply – main factors/technologies insisting on the supply side, in particular, the analysis of some of the key platforms of the Digital Economy , such as Search Platform, Startup Industry or the creation of new web based companies,.
• The Economic Models – Model Digital specific , with particular reference to multi-sided markets (markets with different customer groups linked together by an enabling platform), the economic impacts of the network in traditional markets, and new online markets created from scratch. Key market characteristics such as by improved measurement, high customization, rapid innovation and design market more aware.
• The Business Models – Literature Review classifications and a new Business model classification taking into account the latest developments of the Internet, based on three main categories identified by the author: Transaction-based model, Advertising based model and Free based model.
• The Markets – Major markets in the Internet industry with a focus : on the largest ones : Online Advertising and E-Commerce, analyzed both in terms of size and key economic operating dynamics.
• the program will include lesson from key managers of the Industry in order to investigate specific cases.
Reference Books
Paolo Cellini :La Rivoluzione Digitale , Luiss , 2018
Teaching Methods
traditional lecture
team works -
role-playing or other kinds of simulation
- business games
cases studies
methods for stimulating active participation by students , such as problem solving, systemic reasoning,
Assessment Method
presence to 8 /10 seminars
pass to the written examination
Thesis assignment criteria
Presence to 8/10 seminars
pass to written e xamination
Week 1
1°
The importance of Digital Economy
The seminar will examine the importance of the Digital Economy , highlighting the weight that has in global economies and will identify and examine the different economic and social impacts which it is responsible.
The weight of the Digital Economy in global economies
Main impacts of the Digital Economy and Internet
o Impacts in global economies
o Impacts on markets
o Impact on the supply chain
o Impact on consumers
o Impacts on productivity
o impacts on innovation
o Social and environmental impacts
Week 2
2°
Digital economy as a meta-platform: the origins, history and future developments
The seminar will explore what the Digital Economy is, what are the characteristics that have made it a technology platform unlike any other, what are the founding principles of the Web, the evolution and the social impacts of the Internet from its origins to the present day, also going to identify current developments and future trends.
The unique and substantial differences between the Digital Economy and other technological platforms
Main economic impacts of the Internet
The history of the Internet through the study of the main evolutionary phases that have characterized it:
o Scientific Platform
o Informative Platform
o Searchable Platform
o Social Platform
The ongoing evolution of the Internet, and what are the impacts that have:
o Mobile Platform
o Things Platform
Week 3
3°
The frameworks models of the Digital Economy
The seminar will explore the Digital Economy from the point of view of the main models in the academic literature, going from general models that frame the Internet as a unified system related with the outside world, to specific models, that trying to break the Internet in its various components.
The seminar will then introduced the framework of the study of the Digital economy , the LIIF, that will be used to analyze specific aspects of the Digital and Internet. With this framework we analyze the Internet industry by separating it into five specific layers.
Internet as Complex Adaptative System
Internet as General Purpose Technology
Internet as Large Technological System
Internet layers models
Internet money flow models
Internet value chain
The LIIF framework
Week 4
The distinctive features of Digital Economy
The seminar will analyze the distinctive features of the Internet in the various layers that make up the industry.
The distinctive features in the layer infrastructure of the Digital Economy :
o Cumulative
o open
o programmable
o time and space reducer
The distinctive features in the access to internet layer industry:
o universality
o mobility
o Multi-platform
o Multi-device
The distinctive features in the IT industry layer :
o Rapid evolution of technology
o centralized computing
o infinite Data storage
The distinctive features of the intermediary layer :
o Reducing information asymmetries
o mediation
o increase efficiency
The distinctive features in the content layer :
o Reduction of transaction costs
o Facilitating the creation of content
o Content unbundling
Week 5
The demand in Digital Economy
The seminar will explore the Internet from the point of view of demand, defining what are the key dimensions for measuring the demand in each layer of the framework LIIF, trying to capture the salient aspects that explain the rapid growth and success of the network. Then we will analyze the dimension of internet industry calculating the economic weight of Digital in GDP of the world's major economies.
Size of the Digital industry in the world
Size of the Digital industry in Italy
Specificity of application data: evolution of internet traffic with particular reference to the increase of the share of the mobile
Specificity of the demand for devices of Internet access and analysis of the evolution from fixed devices to mobile devices
Specificity of consumer demand for Digital
Week 6
6°
The supply in the Digital industry
The seminar will explore the Digital industry from a supply perspective, defining what are the main factors that insist on the supply side, in particular, we focused on the analysis of some of the key platforms of the Internet, such as Search Platform, and it is also studied the phenomenon of Startup, namely the creation of new businesses based on the Net, which sees numbers and distinguishing features in the Internet industry
Specificity of the industry of Search
o Specific elements of the search platform
o innovative elements
o How the search creates value
o Economic factors that affect search
o Evolution of market and concentration phenomena
Specificity of the online publishing
o Specific elements of the inventory pricing advertising
Specificity of the phenomenon of the creation of startups:
o Why are created so many startup
o The lowering of the cost to create a startup
o The approach of the lean startup
o The role of venture capital in the creation of startups
Week 7
Economic models of the Digital Industry
The seminar will analyze what are the patterns and specificity of the Digital economy, with particular reference to the multi-sided markets (markets with different customer groups linked together by an enabling platform), the economic impacts of the network within the traditional markets, and the new online markets created from scratch, characterized by better measurement, high customization and rapid innovation.
The driver in the creation of a market
o Demand Pull Market
o Supply Push Market
The role of technology in the creation of the Digital markets
How evolve new Digital markets
o Colonization of new markets
o Consolidation of new markets
o The barriers to entry are typical of Digital markets
Creation of Internet market by design
o Sponsored Research Auction Market
o Consumer auction Market
Multisided markets
o Digital multisided platform
o The definition of pricing in multisided markets
The size of the Digitalmarkets
Short Tail and Long Tail
Niche markets
Week 8
The typical business model of the Digital economy
The seminar will analyze the different taxonomies created over the last few years concerning the type of Internet business model, to arrive at an original synthesis that collects and summarizes all the major and current business models on the web, identifying for each real-world examples and identifying the salient features.
Main classifications of Digital Business Model in the literature analyzed for:
o Differentiation criteria
o categories
Knowledge of the major Digital Business Models and their characteristics:
o Transaction Based models:
Brokerage models
Merchant models
Subscription models
Utility models
o Advertising Based models
Advertising models
Intermediary models
o Free Based models
Community models
Free models
Week 9
9°
The main markets of the Digital industry
The seminar will analyze what are the main markets in the layers of the Internet industry with a focus on most characteristic of the sector: the Online Advertising and E-Commerce, analyzed both in terms of weight, size and economic dynamics.
Online Advertising: size, structure, specificity, leading players. Focus on sub-segments:
o Search Advertising
o Display Advertising
o Advertising Networks
E-Commerce: size, structure, specificity, leading players. Focus on sub-segments:
o Online Marketplace
o Online Auction
o Group Buying
o Social Commerce
Week 10
Seminar: 10°
Title: The products and services of the Digital Economy
Description: The seminar will examine the types of products and services on the Internet today, by organizing them into a detailed taxonomic tree structure. For every product and service we will analyze the key features referring to real-world examples.
Knowledge acquired by the student: Classification, definition and characteristics of the types of websites:
o Content sites
o E-commercesites
o Social sites
Classification, definition and characteristics of the types of web technology platforms:
o Search Platforms
o Productivity Platforms
o CMS Platforms
o Communication Platforms
Classification, definition and characteristics of the types of web services:
o Creative services
o Infrastructure services
o Analytics services
o Advertising services
o Security services
Week 11
Seminar 11:
Economics of the "Multi stage and gate" model
During these seminars the Multi-stage model that illustrates and predicts the development status of startups will be illustrated in its dimensions and implications
Week 12
Seminar 12 :
Venture capital funds: functioning and decision making model
In this seminar the Venture capital industry will be described, its functioning and its decision-making models