E-economy: We haven’t seen anything yet

economy

In the West, we are still much too invested in the real economy. Looking at China, however, we can get an idea of ​​what an e-economy will look like. In August 2017, China accounted for 40% of global online transactions, making 11 times more online transactions than the United States.[1] In this instance, China has the immense advantage over the West to build its market economy directly on the Internet. Emerging powers like Africa[2] and India,[3] in particular, will also have this advantage. Also, e-economy is not just real economy duplicated on the web. It is a whole new ecosystem, or even ‘eco-paradigm’, developed from specific principles (so specific that the economy is built purely on this new foundation, free from any previous reference).[4]

To give a particularly eloquent example of the growing divergence between the economy and the e-economy: The current inflation rates recorded in the material economy are not found in e-economy! Online prices are falling in absolute terms and relative to traditional inflation measures. Online inflation is literally 200 points below the official consumer price index (CPI). Incidentally, this says a lot about our mantra on the need to create new statistical tools[5] measuring economic activity.[6]

In other words, the GDP curves we examined at the beginning of this article are unable to take account of the growth of activity and virtual wealth of this e-economy. If they could, the start of this exponential development would probably be reflected in them.[7] But it is not clear that the figures of the ‘real’ and virtual ecosystems are intended to be mixed up, according to the good old adage: ‘Don’t compare apples with oranges.’ Instead, they should have two separate statistical systems… Read the entire report in the Bulletin GEAB 126 / June 2018

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[1]   Source: McKinsey, 08/2017
[2]  We estimate that in 2050 Africa will be the most modern continent in the world, to which Europeans will emigrate if they have not properly addressed the challenges specific to their own economic transition!
[3]   About India, we published a rather complete article on the challenges to its development by 2040 in the April edition of the GEAB. Source: GEAB N°124, 15/04/2018
[4]   Digital Transformation Is About Ecosystems And Thinking Differently. Source: DigitalistMag, 12/07/2017
[5]  That’s why we invite you to check Mary Meeker’s Internet Trends 2018 report, where we found this information regarding the real / virtual inflation differences. Source: kpcbweb, 30/06/2018
[6]   That said, we find that the media are gradually getting there. Trends or BusinessInsider magazines have, for example, extremely serious “tech” editions (we are no longer in the folklorism of the future), which we recommend reading.
[7]   Measuring the digital economy – A New Perspective. Source: OCDE, 08/12/2014