to Throsby’s concerns about the difficulties of definition; indeed, the main aim of this introduction has involved the contradictory purposes of establishing the importance of the digital economy while noting that it is hard to know what ‘digital economy’ means. The statistical data I have presented broadly suggests that there is something about the digital economy that deserves serious attention. Many other indications point toward the need to grasp what has happened since the 1970s in economic terms, with the rise of digital and internet socio-technologies. For example, in 2018, first Apple and then Amazon became the first companies ever to be valued at over 1 trillion US dollars (Axon 2018). The difference between Amazon and Apple is again illustrative of the difficulties of deciding what kind of economic activity constitutes the digital economy, given the former’s origins as a digital and internet company and the latter’s as a design and manufacturing company.
What is missing is a definition and model of the digital economy as a sector within the wider economy. Modelling the digital as a sector is key to discovering if there is anything distinctive about the digital amid the complexity of the everyday, in which all kinds of different and hybrid economic practices will be present. The qualitative method adopted here is to follow digital economic practices in their patterned interactions until there is a strong enough base to posit a model. This conforms to Keynes’s suggestion regarding economic thought:
one cannot get very far except by devising new and improved models. This requires … ‘a vigilant observation of the actual working of our system’. Progress in economics consists almost entirely in a progressive improvement in the choice of models … The object of statistical study is not so much to fill in missing variables with a view to prediction, as to test the relevance and validity of the model. (Keynes 1938)
The plan of this book is to move from the questions posed by this introduction, and more generally by the hype surrounding the significance of digital economic activities, to examine a range of ways the digital economy operates in practice. This will be achieved in two phases: in the next five chapters case studies of digital economic practices will be presented; following this, three chapters will provide concepts for, a model of, and policy questions about the digital economy.
The five case studies will cover search, social media, disintermediation, free digital economic practices and games. Chapter 2, on search, will examine Google as well as Baidu and other search engines. The importance of the collective activities that construct the World Wide Web (WWW) – which are then ‘read’ to produce search results that are combined with subsequent personalisation based on data collected from users – will be stressed in order to demonstrate how the value of Google’s search results depends on the community of practice that it ‘reads’. Monetisation will be examined to show how the search engine platform privatises the information it collects, generates new information, and then monetises that information through targeted advertising. Chapter 3, on social media, identifies a similar economic practice, though here the ‘value’ resides in the very stuff of emotional and social life. This is explored in relation to Facebook, Snapchat and WeChat, among other social media sites. Again, the way in which a set of collective activities is created and then ‘read’ in order to be monetised will be demonstrated.
The third case study examines disintermediation, looking primarily at Uber, Airbnb and blockchain technologies. Here the economic practice involves a digital platform intervening into an existing service in a society (taxis for example) by disintermediating existing service providers and the various regulatory requirements imposed on them. Monetisation then occurs as the platform sits between the service user who pays and the service provider who is paid, allowing the platform to dip into that monetary flow.
The fourth case study looks at not-for-profit digital economic practices, including free software, the World Wide Web Consortium and Wikipedia. These offer a contrast to the previous case studies in demonstrating that, while digital economic practices create a kind of value which is realised by the collective activities of users, this value can exist separately from its monetisation for profit. Digital economic practices that refuse monetisation produce different conceptions of information as property, in particular how information may be treated as a property that is distributed freely by right, instead of one that is privately and exclusively owned.
The final case study is of online, computerised and networked gaming. Here the economic practice of renting and not buying a commodity is examined more closely, having been mentioned briefly in prior case studies. This practice is one in which what appears to have been bought by a consumer is in fact rented to them and may be withdrawn by the digital company that has been paid. It is also closely related to subscriptions for access to digital platforms. Moreover, the study of gaming allows different digital economic practices to be seen operating together, particularly in the rise of ‘free to play’ models of monetisation, and in the intersection of digital with non-digital economic practices – after all, many games are bought in much the same way as a book is bought online. Massive multiplayer online games, including World of Warcraft, are examined here, as are a range of other games, in particular mobile games like Candy Crush and ‘battle royale’ games like Fortnite and PlayerUnknown’s Battleground.
While these case studies do not comprehensively map digital economic companies – neither Amazon nor Spotify, for example, are addressed in detail – they do qualitatively examine a multiplicity of digital economic practices, both successful and unsuccessful. This case study work will then be developed with concepts drawn from key debates in existing digital economy theory. The three debates examined are free labour, information surpluses as exploitation, and the breakdown of the producer/consumer divide. All three have substantial existing literatures, but Chapter 7 will show that, in the face of case study evidence and conceptual analysis, all three have significant failings needing further theorisation. Such a plan, it should be noted, means that there will be a significant shift in tone as the argument moves into theoretical debates. Whereas the case study chapters engage with the daily matters of digital economic practices, attempting to both follow and excavate how such practices are formed from different actions and perspectives among users, platform owners, platform workers and so on, examining existing theories of these practices involves conceptualisation. Issues such as the information drawn from freely given activities that users provide to social media, that in turn underpin revenue through advertising, will be repeatedly mentioned within the complexity and materiality of practices, and it requires a shift of emphasis to start drawing out such issues by exploring conceptualisations of them. Practices always involve ideas about what is happening within them, and ideas always refer to (even if obliquely) and rely on a sense of relevant practices; in this sense the shift is one of emphasis from primarily diagnosing the meaning of economic actions in digital contexts to theorising across such contexts how recurrent actions are structured and may be conceived.
This move to conceptualisation will provide the basis for a model of digital economic practices to be proposed through three linked divisions – value, property and profit – to be set out in Chapter 8. The first two divisions address the creation of a value that is realised by collective activities, such as search or gaming, linked to different forms of information property. Once a digital platform instantiates such a connection, it becomes possible for the third division of profit to be added through a monetisation strategy. Three main monetisation strategies are identified: targeted advertising, disintermediation and reintermediation, and rent not buy. Within this model, the possibility always remains that a digital economic practice may refuse to seek monetisation for profit and instead offer information as a distributed property. In the latter case, radical options open up for digital economic practices that offer information able to be used simultaneously and completely by everyone who can access it.
Following this modelling of the digital economy, Chapter
