IT economics

I have a friend who makes money in selling accessories through multiply and ebay. Her capital is just the cost of her product and very minimal overhead cost. She pays no rent, no other employee, and most importantly she could work in her own time in her own home.

While it is undeniable that IT has revolutionized the way we live our lives and has given us numerous benefits, perhaps the most important benefit of the IT revolution is its impact on economic growth. It made possible to for those who has minimal capital to offer products to the market. Moreover, the boundaries of the physical market are also blurred and definition of market has expanded to include whoever has access to the internet.

IT also helps businesses to increase productivity, to improve product quality and to create new products and services. It increases productivity because it enable organizations automate tasks resulting to freeing up workers to create value in other tasks. It also allows redefining the business processes for more efficient use of capital. It boosts product quality by making information accessible and for businesses to customize their products that will fit the desires of consumers. It also makes it easier to create new products and services by giving researchers powerful and revolutionary tools that make discovery easier.

But just because IT has been the leading engine of growth does not mean that policymakers can afford to be complacent. Policymakers must actively encourage digital innovation and transformation of economic sectors and promote digital literacy and digital technology adaptation. They can also provide tax incentives to those giving additional investments in new IT. And most importantly, the policies and programs they put in place spur digital transformation so that all, not only the big companies and also the small scale entrepreneurs like my friend, can fully benefit.