Economics and Value of IS

Excerpt

After the first and the second industrial revolution (textile industry enabled by water- and steam-powered mechanical manufacturing facilities in the 18th century, and mass production enabled by electric power in the early 20th century), a third, digital revolution is under way, radically transforming not just business but also social life (Economist 2012). In the digital transformation age, information technologies (IT) and information systems (IS) are the key drivers behind ‘disruptive innovations’, so called because new digital technologies enable new business models to emerge which create new markets and value networks and thereby disrupt existing markets by displacing an earlier technology (cf., Manyika et al. 2013). A prime example of disruptive innovation is online social networking which has changed the way people communicate and connect with each other. Another, even more radical and much debated, potential disruptive innovation is collaborative consumption, also known as the sharing of durable goods (Matzler et al. 2015), which is predicted to replace ownership. Both these phenomena rest on new business models that were made possible by Internet-based IS (e.g., facebook.com as online social networking platform and airbnb.com as online sharing platform) and Web 2.0 as a new version of the world wide web allowing users to interact and collaborate with each other. Other debated disruptive technologies that may have far-reaching consequences for consumers, firms, policy makers and societies as a whole include, for instance, big data technologies, mobile Internet, Internet of Things (including wearables), cloud technologies, and 3D printing (see, e.g., Manyika et al. 2013). …