Major Issues and consideration in a networked Economy

Networked Economy
It’s an emerging type of economic environment arising from the digitization of fast-growing,
multilayered, highly interactive, real-time connections among people, devices, and
businesses.
Three Pillars of the Networked Economy
 Earning Customer Loyalty
 Enabling Open Innovation
 Enhancing Resource Optimization
 Earning Customer Loyalty
 Enabling Open Innovation
 Enhancing Resource Optimization

1. EARNING CUSTOMER LOYALTY. The Networked Economy is already helping companies

provide better, more personalized customer experiences. But there’s much more
opportunity on the near horizon. For example, a “smart” vending machine could recognize
you and provide beverage choices based on its knowledge of your preferences: a diet cola
with lime, a classic root beer, unsweetened iced tea, spring water, or a favorite sports drink.
Such customized delivery capability opens up all kinds of bundling and promotional
opportunities. And the information is tied directly back to the company’s supply chain,
enabling more precise fulfillment and logistics based on real-time purchases.

2. ENABLING OPEN INNOVATION. The Networked Economy will create entirely new ways of
working. “It will change the contract between employers and workers that’s been in place for
decades, if not centuries. The whole idea of employees and their relationship to business will
be reimagined.”
As the first generation of digital natives — people who have never known the world without
computers and the Internet — millennials are natural networkers. They’re completely at
home in highly connected, collaborative spaces like those underlying the Networked
Economy. In fact, they thrive there. That’s a reality that businesses must embrace to attract
the best employees and leverage their talents to fuel true innovation.
3. ENHANCING RESOURCE OPTIMIZATION. The Networked Economy will make it possible for
businesses to use all kinds of resources more efficiently and to move from a world of scarcity
to one of abundance.
Social Implications of Networked Economy
From a societal point of view, the networked economy is built on three cornerstones:
– education,
– free movement of ideas and trade, and
– the widespread use of computers and communications technology.
Education and the free movement of ideas and trade were also cornerstones of the industrial
economy. For example, you could argue that the growth of Western economies began with
the invention of the printing press. It made knowledge in printed form available to the
majority of citizens, whereas before its invention only an elite few had access to extremely
scarce, handlettered books. The access to knowledge facilitated by the printing press, coupled
with the freedom to express ideas and to trade goods freely, led to more inventions and new
ways of doing things that spurred economic growth.
The shift to the networked economy, with its heavy use of the Internet and networked
communications, has resulted in three consequences that you have probably already noticed
or been affected by:
> Death of distance
> Homogenization of time
> Disintegration of borders
The death of distance means that geography no longer restricts human activities. That is, you
can work from just about anywhere and share your results with co-workers around the world
in a matter of seconds. The death of distance has made it possible for many people to work
from home using the Internet or private networks, thereby avoiding long commutes to their
places of employment.
The homogenization of time means that we live in a 2417 world where business continues
somewhere all of the time. Because network servers and software are designed to always
remain available, people can work or conduct commerce around the clock, an effect that blurs
the boundaries between work and home. For example, as part of an information systems
development project, development teams in widely separated time zones might collaborate,
so that work on the project could progress continuously. The homogenization of time also
means that workers who work at home must be careful to separate their professional and
home lives; otherwise, they may have a tendency to work all the time.
The disintegration of borders means that ideas and electronic goods can flow freely into
countries around the world without being subject to search or duties. The rise of the Internet
and Web has made it possible to access information, buy goods and services at lower prices
with no sales tax, and engage in interactive activities from virtually anywhere in the world. In
fact, many social researchers have predicted that the disintegration of borders will lead to a
global democratization of society.
Uneven distribution of ICT Infrastructure: The ICT infrastructure of a country is determined
through a number of measures like number of PCs, tele-density etc. There is lack of resources
to invest in information infrastructure, and research and development in most of the
developing countries. Secondly there are problems in accessing the internet regularly.
Connectivity Issues: There is the problem of connectivity i.e. availability of a fast, reliable and
cost effective internet connection. Then there is the cost of accessing the internet which
includes telephone tariff and line rental and cost of Internet Service Provider (ISP). To this
may be added the replacement cost of computer. Cost of Internet access may be prohibitive
for many low-income households. The quality of service provided by ISP is also important.
Technology Issues : Because of poor quality of services available due to backward technology
it becomes difficult to exploit benefits of ICT. Thirdly education is one of the major factors
hampering diffusion of ICT amongst masses. Only those who are not only literates but
computer literates can really benefit from ICT. In developing countries where Governments
are still trying to universalize elementary education computer literacy is a far cry. Hence the
divide is bound to exist.
Non availability of learning material in native language: Fourth reason is the availability of
relevant material in one’s own language. The most important benefit of the internet is that it
is the vast reservoir of knowledge & information. However this knowledge should be
comprehensible to those who actually require it i.e. there must be availability of web content
in the language of the user. Another challenge for the user is to find the information. The
absence of relevant content may act as a barrier to Internet access.
Digital capacity of the society: E-readiness is the capacity of the society to incorporate ICT in
all its pursuits. The e-readiness of the society primarily depends upon availability of skilled
human resource that is capable of using, improving, innovating and adapting the new
technologies. The different segments of the society viz the households, business, the
government etc. should be willing to accept and absorb ICT. The government must provide a
regulatory framework by making necessary laws & rules to govern the use of ICT in different
sectors of the society. Lesser the readiness, wider the divide and vice-versa.
Employment : There is huge demand of software professionals. The creation of jobs, the
nature, content and quality of work, the location of work, the education & skills required etc.
is to be determined by ICT. Use of the technologies is nevertheless associated with new
patterns of job creation and job loss. And despite the hopeful signs of employment creation,
it is clear that jobs will also be lost through three main channels: obsolescence, automation,
and disintermediation. Certain kind of works, for example, manual record keepers will
become obsolete. The producers & consumers can directly interact on-line so that there is no
longer requirement of channels of distribution. ICT replaces old tasks and occupations
through automation,
Development: ICT is associated with productivity improvements. The exploitation of the ICT
gives industries of a country a competitive advantage. ICT opens up a whole new avenue of
economic activities including development of hardware and software, online services, and
many others. ICT offers tools that accelerate development and may become shortcut to
economic growth.
National and Social Interest Access to the ICT is an important component of civil life.
Telephone (including mobile services) is often considered important for of security, and in
emergencies. Internet is an important source of many vital information regarding career, civic
life, safety, etcMany social welfare services are delivered through ICT. ICT improves social
mobility by enabling people to remain in touch with others
Government policies and support
Networked Economy has Enhanced governmental support in the form of budgetary
allocations, lower taxes and a regulatory framework are essential for the transition to the ICT
society.
Online content Issues
The Internet has brought a tremendous advance in the availability of information, resources,
and activities. Unfortunately, some of the content made available online raises issues about
defamatory messages, adult-oriented Web sites, and Web-based gambling.
Economic Issues in the Networked Economy
The networked economy has already brought about many changes in our lives. One dramatic
change involves the definition of scarcity. Like land, labor, and capital, consumer attention
span has become a scarce commodity. Companies seeking to do business in the networked
economy must take this change into account. In addition to this new version of scarcity, the
networked economy has created or amplified other economic issues, including the division
between those who have access to the Internet and electronic communication and those who
do not, and whether and how to tax electronic commerce.
There are economic challenges in e-commerce when crossing international borders. Different
countries have different policies on collecting sales or value-added taxes on purchases.
Shipping items through customs in various locations requires a lot of knowledge and patience.
Currencies and exchange rates vary from nation to nation as well.
Although business to consumer (B2C) global e-commerce is growing rapidly due to rising
incomes and improved Internet access, the vast majority of e-commerce is business to
business (B2B). Businesses have been doing electronic transactions since electronic data
interchange (EDI) networks came into existence in the 1970s and 1980s. EDI allowed two
businesses to electronically send each other invoices and payments. The speed of these
transactions allows international companies to rapidly react to changing world market
conditions.

Digital Divide

 The digital divide is a phenomenon wherein those who have access to ICT are
benefited by the use of it.
 Their economic well being is ensured in the form of highly paid jobs and more business
opportunities, while those who do not have the access to ICT remain aloof of these
benefits and hence comparatively they are in a disadvantageous position.
 The divide does not affect only economically but socially as well. Hence the digital
divide is the socio-economic difference between peoples in their access to ICT.
  The term also refers to gaps between groups in their ability to use ICTs due to varying
literacy and technical skills, and the gap in availability of quality, useful digital content.
The divide is seen as a socioeconomic problem.
Taxation Issues in Ecommerce
Business conducted through the Internet caters to globally located customers. This raises
cross-border legal issues. Transactions that may be legal and valid in one jurisdiction may not
be enforceable in others. Issues relating to the conclusion and enforcement of contracts and
choice of appropriate jurisdiction create interpretational issues.
The Virtual Workplace
A concept relating the capability of a worker to work at any place and any time. Related to
the death of distance and homogenization of time is the concept of the virtual workplace, in
which a worker can work at any place and any time. The increased availability of wireless
networking has enhanced the attractiveness of the virtual workplace by no longer requiring
that the worker use a wired connection. The most popular approach to the virtual office is
teleworking from home, temporary or shared office space, or a mobile office
e-Iancing
Electronically connected freelancers working together on project teams for a week, a month,
or however long it takes to complete a project.
In addition, a new concept called e-lancing is becoming more popular. With e-Iancing,
electronically connected freelancers work together on project teams for a week, a month, or
however long it takes to complete a project. Several Web sites operate to connect e-lancers
with companies looking for people with particular skills to work on a project including
www.elance.com and www.FreeAgent.com. Another version of this idea is the virtual
assistant, a person who works as an assistant on as-needed basis over the Internet for a
number of employers.
Teleworking
(also known as telecommuting), the use of networks to engage in work outside the traditional
workplace, is an increasingly popular approach to work

1. Borderless economies
Mobile technology has empowered consumers in myriad ways. It has opened doors to a
digital economy, taking globalization to a new level. Traditional boundaries are clearly
blurring, with online retailers expanding to new geographies. This leaves companies to deal
with government regulations, geopolitical status, "stateless income", and extensive local
and international competition. Modern e-Commerce businesses are in a race to provide the
best premiu ..

Ethical Issues
Rules created by cultures and economies about whether certain acts ore "good" or "bod: or
"right or "wrong."
All cultures and economies have developed rules about whether certain acts are "good" or
"bad," or "right" or "wrong."These rules, known as ethics, are inherently value judgments that
have resulted from a consensus in society. Such rules are often expressed or supported by
laws. The networked economy is no different from previous economies in terms of ethical
issues. For example, is it ethical to write virus programs that annoy users without destroying
anything? Is it ethical for employers to read their employees' e-mail with no reason (it is
certainly legal, but is it ethical ? Similarly, is it ethical to compile personal information on
customers with or without their knowledge

1. Using computer networks to harm other people: . The key term is harm, which you can
interpret to mean any type of harm-physical, emotional, monetary, or otherwise. For
example, just as it is unethical to harm people by planting a bomb in a public building,
according to this rule, it is also unethical to post instructions for bomb making on the Internet.
Hacking into a credit union database and accessing personal financial data would also be
considered unethical (as well as illegal) under this commandment, as would purposefully
exposing personal data on the Web or collecting personal data without an individual's
permission.
2. Interfering with other people's computer work. : Programmers can readily send viruses
and other programs over the Internet to interfere with or even destroy other people's
computer work. Sending even non-destructive viruses to other computer users violates this
commandment if they interfere with work by taking over internal memory. Also, sending an
overwhelming number of e-mails or requests for Web pages to a server with the intention of
crashing it would be considered unethical, no matter what your feelings are about the
purpose of the server.
3. Snooping around in other people's files: Files on computers owned by individuals (not
organizations) either are the personal property of the individuals or are software that has
been licensed to that person. In either case, it is unethical (and, in many cases, illegal) to
access these files, including e-mail sent from personally owned computers. On the other
hand, files on computers owned by organizations have been ruled to be the property of the
organizations, although some employee organizations insist that it is unethical for employers
to read their employees' e-mail.
4. Using computer network to steal: Using a computer to steal from individuals or
organizations is both unethical and illegal. The networked economy has inspired many new
types of fraud as well as old schemes repackaged for the Internet.
5. Using a computer (or network) to bear false witness. One well-known fact about the
Internet is that bad or unflattering news spreads like wildfire. Using a Web page to spread an
untruth or inaccurate information and sending an unfounded rumor to a newsgroup are
examples of using a computer to bear false witness. The volatility of Internet-related stocks
means that good or bad news can cause a large number of investors to gain or lose a great
deal of money very quickly before the validity of the news can be determined.
6. Using copyrighted proprietary software for which you have not paid. Although software
piracy is clearly illegal, you may think that borrowing a copy of a software program from a
friend is okay. It is definitely not! The software is licensed to a single user (unless a site license
has been purchased), and that user is the only person who should use it. Allowing others to
use software is both illegal and unethical in the same way as photocopying a copyrighted
textbook. Although not always illegal, it is definitely unethical to download shareware and
then not pay for it. (Shareware is software that can be downloaded from Web sites on the
Internet for free, but you are expected to pay a nominal fee to its author. If you choose to use
it, then you are "on your honor" to pay for the shareware.)
7. Using other people's computer resources (or network) without authorization or proper
compensation: Your school computer account probably allows you to access your university's
computer system, including its e-mail program. You may also have an AOL or local ISP account
for which you pay a monthly user fee. In either case, you would not want someone else to
break into the computer system and use your account. The same applies to other people's
accounts-hacking into them is considered unethical.

8. Appropriating other people's intellectual output: Just as copying someone else's math
homework or English term paper is cheating, so, too, is copying someone else's computer
program. This statement includes copying text, illustrations, or photos from a Web site.
Although most would concede that it is appropriate to learn design and programming
techniques by investigating a Web site, outright copying of such a site is unethical, and, if the
material is copyrighted, illegal as well. You should cite any quoting or paraphrasing of material
from a Web site just like any other research source, as this book has done

9. Not considering the social consequences of the program you write or the system you
design: One should take into consideration if the Web site they have created/ or software
they have written will in some way harm society. Does it provide information that can be used
in a harmful way-say, in the hands of someone with psychological problems? Will the Web
site incite anger or other hurtful emotions in those who read it? Will it degrade a group of the
population or harm children. E-mail users and others using Internet communication protocols
sometimes feel that they can write things that they would not say in a face-to-face
conversation. Sending angry e-mail messages to someone or an organization would be
considered unethical under this commandment. As with any communications media,
politeness and consideration remain the best policy, regardless of how you feel about the
other party. Although these commandments may not cover all possible situations, they
provide an overview of ethical use of computers in the networked economy.
Privacy Issues
 Identity Theft
The process of stealing a person's identification for purposes of purchasing goods and
services using his or her credit.
when even a small amount of information about a person falls into the hands of criminals,
the worst type of privacy invasion can occur-identity theft, in which criminals steal a
person's identification for purposes of purchasing goods and services using that
individual's credit.
This information can be obtained in a number of ways, including the following:
> Theft of a pocketbook, purse, wallet, or mail
> Dumpster diving-going into a trash bin to retrieve credit card receipt carbons, medical
records, and so on
> Using inside connections to credit agencies to access information about employees or
others
> Fraudulent schemes in which the criminal fills out a change-of-address form and has the
victim's mail sent to a new address
> Pretexting to fool people into providing information on the victim.
In addition, criminals can go to genealogy Web sites to determine a person's mother's
maiden name, thereby providing a key answer to a question often asked to confirm
identity. Armed with this information, criminals can use it to apply for driver's licenses,
telephone service, and credit cards, or to steal benefits such as pensions and Social
Security payments. Often, identity thieves are individuals who have credit problems;
sometimes, however, members of organized crime are the culprits. Victims often don't
find out that their identity has been stolen until they are denied a loan because of unpaid
bills or until bill collectors try to collect on credit card bills the criminal has run up

 Information Exposure
 Exposure of confidential information can pose a threat to an individual's financial and
personal well-being, whether such exposure occurs accidentally or intentionally.
Accidental exposures are usually caused by gaps in the security of servers on which the
information resides. A server administrator may have failed to close security holes, install
required software files, or fix known bugs in server software. To prevent accidental
exposure, the person or technical group running the servers should fix all security holes
and software bugs immediately upon discovery. Organizations face this same problem in
providing security for their networks. Intentional exposure can occur when a hacker
breaks into the network, when information is "grabbed" by a Web site that is set up to
harvest e-mail address and other data, or through the sale of information. Hackers might
search for information on a specific person, seek to expose an entire database to the
outside world to embarrass an organization, or use the data for criminal purposes. For
example, a hacker was able to download thousands of credit card numbers from a
company's database. The hacker tried to blackmail the company by threatening to release
the credit card numbers to the public.
Information brokers
Individuals who use databases and other sources to find information on individuals.
With the proliferation of both private and public databases, a new breed of people and
organizations called information brokers has found ways to profit from these databases.
Information brokers will use almost any means-usually legal, but sometimes not so legal-
to provide information). on an individual of interest to their customers. Typical
information provided by these brokers includes credit reports, criminal histories, unlisted
phone numbers, and so on. Information brokers find this information in a variety of ways-
--some the electronic way, and some the old-fashioned way, through personal contact.
One such approach involves a process known as pretexting, in which an unscrupulous
information broker calls a business or agency under the pretext of being the person on
whom they are seeking information and asks about that individual's account. If the
information broker has the person's Social Security number, he or she can find almost any
type of information on the target individual; if not, the information broker must work a
little harder, but eventually may find the needed information.
Data Survellienace
The systematic use of information technology in the investigation or monitoring of the
actions or communications of one or more people
Although most uses of information technology to find groups of people who fall into
certain categories do not pose problems, governments or private groups that use
information technology for surveillance purposes can present a threat to privacy.
From a privacy point of view, this process is referred to as data surveillance and entails
the systematic use of information technology in the investigation or monitoring of the
actions or communications of one or more people. T
Spyware
 Software that gathers information about online activities and transfers it back to a server
without your knowledge or permission. A recent threat to privacy comes from a type of
software known as spyware. Spyware gathers information about online activities and
transfers it back to a server without your knowledge or permission. Three types of
spyware exist: spyware that is part of other software, a Web bug, or a virus or worm
In the first case, spyware can unknowingly be installed on a computer as part of a commerCial
software package on CD or as a module of a freeware or shareware package that is
downloaded over the Internet. In either case, the spyware runs in the background, watching
online activities and reporting them back to a server.
Junk Emails
Just as junk mail and telemarketing calls were used in the industrial economy to advertise or
attempt to sell products and services, e-mail is now being heavily used in the networked
economy for similar purposes. This chapter on privacy covers this topic because many people
feel that their privacy has been breached when they receive offending junk e-mail. Commonly
referred to as spam,9 junk e-mail is extremely inexpensive to send and (at least in monetary
terms) to receive. Because of the low cost, an organization can send spam to enormous
numbers of people, and only a small proportion of those receiving the e-mail need to respond
for it to be cost-effective. Individuals who post messages to particular newsgroups often
receive spam. Others unknowingly sign up for it when they register at a Web site. Because
many people replied to spam by flaming the sender (that is, sending a nasty reply) or by
overloading the spammer's server by sending many messages or very large messages,
spammers now use non-repliable messages in which they omit the reply-to address.
Health Issues
In general, computers and the Internet have proved beneficial to society and have allowed us
to do many things not otherwise possible. For example, they have created virtual
communities of people who otherwise would never have met. However, working at the speed
of the Internet can cause health problems associated with long-term use of computers,
especially the keyboard and mouse. These problems cost employers large sums in worker's
compensation costs and lost productivity. In addition, some psychological health problems
are associated with use of the Internet. This section covers the various health problems and
possible solutions.
Repetitive Stress Injuries
repetitive stress injury (RSI) A condition in which workers suffer from moderate to severe
muscle and joint problems in the hand, wrist, arm, and shoulder.
These repetitive stress injuries (RSI), in which workers suffer from \ moderate to severe
muscle and joint problems in the hand, wrist, arm, and shoulder, are becoming epidemic in
computer-related jobs. In fact, the use of the computer has created a dimension in
occupational health and safety unique to computer users
RSI is also called cumulative trauma disorder (CTD) and typing injury (TI).
Regardless of the exact name used, RSI always involves numbness and tingling in the hands
as well as pain and edema (swelling) of the hands, arms, shoulders, neck, and/or back. It
occurs when muscles, tendons, and nerves become damaged by irritation resulting from
prolonged use of a keyboard with the body in an unnatural, unrelaxed position. Often the
injury results from using an improperly designed workstation (in this context, a workstation
comprises the computer and supporting furniture). RSI can put a worker out of work for weeks
or even months, and be very expensive to treat. RSI can take several forms, including carpal
tunnel syndrome and tendonitis. Carpal tunnel syndrome (CTS) results when the median
nerve in the arm becomes compressed because swollen, inflamed tendons exert pressure on
a nerve. Tendonitis entails a general inflammation and swelling of the tendons in the hands,
wrists, or arms. An irritation of the tendons connecting the forearm to the elbow joint is
known as tennis elbow.

Mouse Problems
Although not nearly as problematic as keyboard use, improper use of a mouse can also cause
shoulder, back, and arm pain. People who use a mouse positioned to the side of their
computer keyboard often have greater muscle tension in the upper shoulder, back, and arm
than those who use a centrally located trackball pointer. Because the mouse is used 30
percent of the time in word processing and 80 percent of the time in graphics work, proper
positioning can be critical to avoiding "mouse shoulder" or "mouse arm." Training and short
breaks can also cut this tension in half
Ergonomics
– Ergonomics is the science of designing the workplace in such a way as to keep people
healthy while they work, resulting in higher morale and more productivity. The
increase in heavy computer usage and rising numbers of RSIs have made ergonomics
essential. Ergonomics combines the knowledge of engineers, architects, physiologists,
behavioral scientists, environmental scientists, physicians, and furniture designers
and manufacturers to determine the best design of tools, tasks, and environments.
The goal of ergonomics is to create an optimal balance between productivity and well-
being. An ergonomically designed workstation allows a worker to work in a
comfortable posture, thereby reducing the risk of developing a repetitive stress injury.
Ergonomic design includes consideration of the height and position of the monitor,
the height and angle of the keyboard, the task chair, proper indirect and task lighting,
proper ventilation, noise reduction, and a footrest if the user's feet do not rest
 squarely on the floor. Of these factors, the task chair or seat is probably the most
important element. It should have an adjustable back and arm supports and an
adjustable height.
Psychological Problems
The psychologically healthy person uses the computer in healthy ways but may also suffer
some negative effects. As a tool, the computer extends the expectation of work productivity.
When results fall short of expectations-and they frequently do-a slow process of frustration
and anxiety may result in a gradual erosion of selfesteem, leading to feelings of inadequacy
and depression. After all, self-esteem is enhanced by success. When perceived failures, no
matter how minor, occur, disappointments and depression may ensue. Pressures to produce
may take time from the worker that was previously available to family, which can create
problems in his or her relationships with a spouse, children, and significant others
Web Addiction
The Internet has made life a lot easier by making information more accessible to all and
creating connections with different people around the world. However, it has also led a lot of
people to spend too much time in front of the computer, so much so that it becomes the
center of their lives. This can lead to an Internet or computer addiction. Internet or computer
addictions manifest in several ways that cover various degrees and areas of Internet usage.
They are the following:
– Information overload. Too much online surfing leads to decreased productivity at
work and fewer interactions with family members.
– Compulsions. Excessive time spent in online activities such as gaming, trading of
stocks, gambling and even auctions often leads to overspending and problems at
work.
– Cyber-relationship addiction. Excessive use of social networking sites to create
relationships rather than spending time with family or friends may destroy real-life
relationships.
The following symptoms are typical of online addicts:
 Feelings of guilt  No sense of time
 Anxiety  Isolation
 Depression  Defensiveness
 Dishonesty  Avoiding doing work
 Euphoric feelings when in front of the computer  Agitation

 Unable to keep schedules