ABSTRACT
This chapter discusses the economics of digital business, some of the key technologies firms use, risks arising from digital disruption, and how digital businesses create and capture value. It looks at technologies such as artificial intelligence (AI) through the lens of business capabilities and applications, not technology per se. Digital products are intangible, meaning they do not have a physical presence. They have at least five important characteristics that distinguish them from physical products—zero marginal cost, nonrivalry, network effects, no need for inventory, and customizability. The chapter discusses some of the information technologies that underpin the digital economy: AI, robotics, three-dimensional (3D) printing, cloud computing, blockchain, and fifth-generation (5G). 3D printing, which has been around since the 1980s, has lately been experiencing much development, innovation, and applications. Building the 5G infrastructure is hugely expensive and requires billions of dollars in annual spending.
