Currently in the globalized world in which we live, using the internet is not a privilege, it is a necessity. Through this technology, Mexico and China are only a click away.
It is evident that the Internet is the first means of communication used by millions of people around the world to carry out; from commercial transactions, to other activities related to health, research and entertainment. Therefore, the Internet is affecting not only organizations, but the daily processes that people live.
The use of Information and Communication Technologies (ICT), have revolutionized the way in which organizations and individuals currently work, it would be enough to see the success of Netflix, Amazon, Google, and even any company that, within Its value proposition, will prevail innovation and the correct use of ICT, in individuals the same has happened, from the form of communication, which is currently given through social networks, to the way of making a bank payment, making use of electronic banking, to name a few examples.
And it is in this context, that we cannot leave aside the issue of digital economy, that its use has increased the profitability not only of organizations, but of entire countries, we could simply say that it is the integration of the Internet into processes production and satisfaction of needs. But the digital economy is bigger than a simple definition, therefore, in this article we will mention its characteristics, its applications and we will mention statistical data that supports its importance and need.
DIGITAL ECONOMY
Digital is everything that can be expressed with numbers, in a binary pattern. Therefore, when referring to digital products or services, it is understood that these products or services can be translated entirely into numbers and subsequently decoded, without losing their characteristics in this process.
The ability to transfer information encoded by the world, which has shaped the face of the digital economy, in a dialectical relationship between the ability to process information and the means to transmit it.
From the previous paragraphs it follows that the concept of digital economy refers to an information-based economy, and supported by Information and Communication Technologies (ICT)
The term Digital Economy is not a new concept, since as we can see, in this article, Spanish authors begin to mention the term since 2001. However, it is in 2016, when Mexico, when hosting the Magisterial Meeting of Digital Economy, which becomes aware as a country of its importance.
(Vergés, Serarols, del Águila, & Padilla, 2001) give us an explanation of what the Digital Economy is, they define it as a sector of the economy that includes the goods and services in which its development, production, sale or supply They depend critically on digital technologies. It is made up of four subsectors: infrastructure and applications, on the one hand; and electronic commerce and new intermediaries, on the other.
The development of ICT or digital technologies in recent decades and the business innovations associated with them have defined an economic space that receives different names, among others, post-industrial society, knowledge economy, innovation economy, network economy, new economy, e-conomy and digital economy.
The digital economy is an emerging and complex phenomenon, related to Microeconomics, Macroeconomics, and Organization and Administration Theory.
According to (Vergés et al., 2001) the digital economy defines a new socio-political and economic system, characterized by an intelligent space that is made up of information, instruments for accessing and processing information, and communication capabilities.
The components of the Digital Economy, according to (Vergés et al., 2001), are the following:
- The ICT IndustryE-commerce between companiesDigital distribution of goods and servicesSupport for the sale of tangible goods
The digital economy is based on the digitization of information and on the respective ICT infrastructure. This concept is the one that best defines the global impact of ICTs, not just Internet-based technologies, on the economy. From the macroeconomic and microeconomic point of view, the intersection between technological advances and innovation in business processes in companies is considered.
On the other hand, (Vergés et al., 2001) quotes (Kling & Lamb., 1999) to present another perspective of the Digital Economy, explaining that it is a sector of the economy that includes the goods and services in which its development, production, sale or supply depend critically on digital technologies.
Today, one can speak of a new economy or a digital economy as ICTs, especially the Internet, are transforming, the management and organization of companies and the competition between them.
The impact of the digital economy on organizations can range from the location of the plant, the size, the organizational and physical structure, as well as the relationships it develops with other companies, since the Digital Economy has affected the size and structure of the current markets, the prices of goods and services, as well as the characteristics of the labor market.
The use of networks, such as the Internet, can reduce the costs of an organization, in terms of transactions, which previously was done through third parties, now, with electronic commerce, it is over.
The effects that the Internet can have on customer-supplier relationships will be mentioned below:
- Reduction of the distance between the two parties.Reduction of the profit margin of suppliers.Increase of exchange costs.
We have to consider that the digital economy is made up of those organizations and individuals that generate their income directly or partially from the internet or those that offer products and services related to the use of the internet.
The internet allows organizations to expand their geographic reach in an exponential economy. In the digital economy, organizations do not have to be large to be global. For the first time, small organizations can reach potential customers anywhere in the world, however they will need to develop new criteria and more important competencies, as well as reconsider their business strategies. (Vidal, 2015)
According to (Vidal, 2015) process reengineering is no longer a strategy for the new economy, as well as quality, reengineering is a necessary condition, but not sufficient for competitiveness, since the economy and the rules of Businesses are in a constant process of transformation.
CHARACTERISTICS OF THE DIGITAL ECONOMY
According to (Vidal, 2015) if we could mention some of the characteristics of the Digital Economy, they would be the following:
- It is a global economy
- Based on knowledge, it eliminates borders. Products and services become highly mobile, exploring advantages in regions. Globalization and technology act as cause and effect of the same world development process.
- Individual ideas, information and technology become part of products. The organization's key assets lie with knowledge workers. Lifelong organizational learning becomes the only sustainable competitive advantage.
- Very short product and service life cycles. The innovation activity is committed to the continuous renewal of products, systems, processes, marketing and personnel management.
- New media, the information highway and the new economy are built on the basis of the bit. The means of transmission, reproduction and presentation of information converge towards a digital world. Digitization of professional services.
- Virtual educationVirtual congressesVirtual workChange from analog to digital and physical elements become virtual.Virtual shopping centers.
- The development of communications hardware and bandwidth opens the way for new gains to be in the information services sector where value is created for consumers.
- New business operating models are created through exclusive segmentation for a single-client market. The advantages of large companies (economies of scale and access to resources) are overcome and it eliminates bureaucracy, the necessary hierarchy and inability to change. There is an increase in Outsourcing.
- Molecular, dynamic and flexible forms. Process reengineering initiates transformations towards more productive forms oriented to the client. The knowledge worker functions as a business unit, creating and incorporating value into production. Mass markets are replaced by an active market with specific niches.
- Companies, functions and people will need to climb the chain of creating value or they will disappear.
- Just-in-time systems change the nature of many businesses. Electronic document exchange signals the wave of new ways of doing business and a metabolism of business towards real time.
- Little labor mobility between an industrial economy and a knowledge-based one. Strong pressures for decentralization of economic and political power. The tendency of those without access to the new knowledge infrastructure is to lag behind. Educational systems are reconfigured.
SUBSECTORS IN THE DIGITAL ECONOMY
In (Vergés et al., 2001) four subsectors in the digital economy are identified:
- Digital goods and services: this can be the transfer of funds, online information services, electronic media, sales of software and the like, sale of music, movies, applications, books and distance education. Goods and services digital media: sales, via the internet, books, music, electrical appliances, or tourist services and reservations. ICT-intensive goods and services production: market research, computer-aided design and production of tangible goods that require the use of ICTs. The ICT industry: is responsible for supporting the three previous segments; hardware, software and services, equipment and communications services.
Subsectors of the Digital Economy. Source: (Mexico Connected, 2015)
DIGITAL ECONOMY APPLICATIONS
In his book "Working in the digital age", Luis Lombardero explains that there are various applications of the digital economy that will be exemplified by the following infographic:
Applications of the Digital Economy. Source: (Lombardero, 2015)
TRENDS IN THE DIGITAL ECONOMY
(ESIC Business Marketing School, 2017) briefly informs us of the trends for 2017 that will affect the digital economy.
- Business transformation: to become a digital company, which will affect processes, technologies and people.
- Social Networks Cloud Computing Mobility Big Data
- Read: small projects Agile: small teams collaborating from their specialization in large projects, in less time.
- Among objects: weareablesVisual web: communicate in images and videos and not so much in words.
- Assistants in the cloud (Chatbox): improving e-commerce.
These trends in the Digital Economy may mark the end of the "era of the customer" by welcoming the "era of algorithms".
RULES FOR BUSINESSES IN THE DIGITAL ECONOMY
(Vidal, 2015) argues that there were five fundamental assumptions that underpinned the success of the leading organizations in the market:
- Interaction and transformation costs are high Physical assets play a fundamental role in generating supply Company size conditions benefits Access to information is expensive and restricted Large capital and several years in the market are needed to establish a business to world scale.
Currently, technological convergence has meant more than a change in the way business is managed, it has made obsolete the fundamental economic assumptions on which most successful organizations were based.
- The costs of interaction and transformation are no longer so high Vertical disintegration: organizations in the digital economy must be flexible and gradual. Physical assets do not play a fundamental role in generating supply: intellectual property and relationships with Customers have come to the fore.The company size does not condition profits: Information, intellectual property, and customer relationships are not limited by the capacity of the factory, as they hardly have a physical component. Access to information is no longer expensive and restricted: information is cheaper and easier to obtain. Information about customers can be easily collected and used to provide them with a better product or service.Large capital and several years in the market are no longer needed to establish a business on a global scale: virtual channels can be used to search for sources of products and services and to promote, sell and support them. In the digital economy, you must first focus on customers' businesses and then configure the business to meet their demands.
CURRENT SITUATION IN MEXICO
In the National Productivity and Competitiveness Survey (INADEM, BANCOMEXT, INEGI, & SE, 2016) it reveals that 74.5% of Micro-enterprises do not use computer equipment, a percentage that decreases in Small and Medium-sized Companies with 6.6% and 0.9% respectively.
The reasons for not using the computer equipment provided by Micro, Small and Medium Enterprises (MiPyMes) is that they do not need them and do not have access to them mainly.
Therefore, the following statistic is not surprising, since 73.9% of Microenterprises indicate that they do not use the internet. This situation represents 7.6% and 1.6% in Small and Medium-sized Enterprises, respectively, arguing that they do not need it, and that they do not have the financial resources to access it.
These statistics are interesting, because according to the research article they carry out (Anvari & Norouzi, 2016) reveals that a country that uses ICT and the Internet and therefore the Digital Economy, will grow and its profitability will increase.
Therefore, it is transcendental that Mexico, as a country, generates greater opportunities for MSMEs and can soon integrate into the digital economy.
According to the 2014 Economic Censuses, presented by the National Institute of Statistics and Geography (INEGI), of the total number of companies in Mexico, Micro-businesses represent 94.3%, generate 38.9% of employment, and their contribution to GDP is 9.8%; while Small and Medium-sized Enterprises (SMEs) represent 5.5% and currently generate 35.1% of jobs, making a contribution to GDP of 26.1%. (INEGI, 2014)
If Microenterprises currently contribute to GDP about 10%, with 74% of them outside the Digital Economy, it would be logical to think that the contribution to GDP would increase considerably if that 74% of Microenterprises were integrated into the Digital Economy.
Integrating into the Digital Economy is a preponderant situation in MSMEs, if they want to increase their profitability and competitiveness, compared to other organizations, since in 2015, according to the Survey carried out by the National Institute of Statistics and Geography, 57.4% of the population in Mexico make use of the internet, with 62.4 million people having access to the internet, in that same year the survey revealed that 46.3% of the population in Mexico do not use the internet, with 46.3 million people respectively (INEGI, 2016).
ACKNOWLEDGMENTS AND THESIS THEME
I thank God for all his blessings, also for the opportunity to work in the process of improving myself. I thank my parents for supporting me at all times in this new adventure, the National Council of Science and Technology for their support in my postgraduate studies, the Orizaba Technological Institute, the Master of Administrative Engineering, as well as the subject of Fundamentals of Administrative Engineering, for providing me with the necessary bases to be better as a professional and human being.
Topic: Implementation of digital economy tools to increase profitability in the sales area of an organization.
Objective: Implement digital economy tools within the marketing and product promotion processes to increase profitability in the organization's sales area.
CONSULTED REFERENCES
- Anvari, RD, & Norouzi, D. (2016). The Impact of E-commerce and R&D on Economic Development in Some Selected Countries. Procedia - Social and Behavioral Sciences, 229, 354–362.https: //doi.org/10.1016/j.sbspro.2016.07.146ESIC Business Marketing School. (2017). Digital Economy - Joost Van Nispen - Trends 2017. Retrieved from https://www.youtube.com/watch?v=zK6sqrx8C_oINADEM, BANCOMEXT, INEGI, & SE. (2016, July). ENAPROCE: National Survey of Productivity and Competitiveness of Micro, Small and Medium Enterprises. Press release. Retrieved from http://www.sidalc.net/cgibin/wxis.exe/?IsisScript=UCC.xis&B1=Buscar&formato=1&cantidad=50&exp resion = Martinez% 20Espinosa,% 20Yulkeidi.INEGI. (2014). 2014 Economic Censuses. Definitive Results. Retrieved on May 3, 2017, from http: // www.inegi.org.mx/est/contenidos/proyectos/ce/ce2014/INEGI. (2016). Expectations of electronic distribution of food in Mexico Expectations of electronic distribution of food in Mexico. Retrieved from http://www.ciad.mx/estudiosociales/index.php/es/article/view/365Lombardero, L. (2015). Working in the digital age: Technology and skills for digital transformation. LID Editorial.Mexico Conectado. (2015). What is the digital economy? Retrieved on May 3, 2017, from http://mexicoconectado.gob.mx/notas.php?id=285Vergés, JMV, Serarols, CS, del Águila, AR, & Padilla, AP (2001). The digital economy and its impact on the company: theoretical bases and situation in Spain. ICE Economic Bulletin, Spanish Commercial Information, (2705), 7–24. Vidal, MA (2015). The digital age and its role in the economy.La Caixa Research. Retrieved from
