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Digital Economy

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Value Creation in Digital Economy

Value Creation in Digital Economy


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  • 1. Change of the World “CHANGES IN PRACTICE ARE EVOLUTIONARY. CHANGES IN PRINCIPLE ARE REVOLUTIONARY”PHMC GPE LLC Richard Nolan (HBS) INDUSTRIALISM => INFORMATIONALISM Production Economy Digital Economy - land, labor, capital - technology, knowledge, networks Materialism “Mind Age” Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 2. Short Economic History of MankindPHMC GPE LLC - Hunting and Gathering 100 000 yrs - Agrarian Economics 10 000 “ - Industrialism/Production Economics 200 “ - Informationalism/Digital Economics ? Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 3. Value Creation in Digital EconomyPHMC GPE LLC Microsoft Market Value (-97) USD 120 mrd Assets USD 10 mrd Explanation: INTELLECTUAL CAPITAL Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 4. Drivers of Digital EconomyPHMC GPE LLC SPEED - Anytime Customer Response CONNECTIVITY - Online, Interactive - Anyplace Customer Response INTANGIBLES - Learning, Knowledge - Anticipating - Customizing - Upgrading Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 5. Intellectual Capital MARKET CAPITAL KNOWLEGDE CAPITAL - Brands - PatentsPHMC GPE LLC - Customer Base - Copyrights - Permanent Business - Business Secrets - Company Name - Know-how - Business Relationships - Design HUMAN CAPITAL INFRASTRUCTURE - Training and learning - Mgt systems - Knowledge - Company Culture - Leadership - Networks - Capabilities - Finance Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 6. Human Intensity Definition:PHMC GPE LLC “Human Intensity is the ability of companies to combine large amounts of human qualities such as insight, imagination, know-how, sensitivity and passion for excellence, in ways which make a Value added difference to customers ” => COMPANY VALUE Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 7. Increasing the Company Value Mission and Put the ExcitingPHMC GPE LLC Human Challenges Center Stage AMPLIFY THE HUMAN CAPITAL Effective Investing in Intelligence Future Learning and Leading Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 8. Principles for the Development of a Complete Mind 1. Study the Science of ArtPHMC GPE LLC 2. Study the Art of Science 3. Develop your Senses - especially learn how to see 4. Realize that Everything connects to Everything else (Leonardo da Vinci) Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 9. The Use of Human Capital “Unlike Capital, Knowledge is most valuable when it is controlled andPHMC GPE LLC used by those on the Front Lines of the Organisation.” Bartlett&Ghoshal, HBR 1997 Nordstrom Policy Manual: “Use your own best judgement at all times.” Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 10. Lane Exchange HighwayPHMC GPE LLC Seller INFO MONEY EMOTION MONEY EMOTION INFO Buyer Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved
  • 11. Development of the Exchange From Industrialism to Informationalism TRADITIONAL TRANSACTIONS NEW TRANSACTIONSPHMC GPE LLC Seller Buyer Exchange Value Role CREATE CONSUME BOTH CREATE&CONSUME Value Received MONEY PRODUCT/SERVICE MONEY/INFO/EMOTION Communication SENDER RECEIVER INTERACTER Information IN CONTROL LIMITED ACCESS SHARED ACCESS/CREATION Time BUSINESS HOURS BUSINESS HOURS CONTINUAL/CONNECTED Space POINT OF SALE MARKETPLACE CONNECTED ANYWHERE Copyright© PHMC GPE LLC 2001-2011 sqq All rights reserved