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".
Prerequisites
no
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 examination
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
Week 4
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