Introduction

Digital Economy Concept

The ‘Digital economy’ is sometimes used synonymously with ‘information society’, which emerged back in the 1960s to describe a futuristic society that is highly dependent on information (Bridges.org, 2001; Computer Systems Policy Projects, 2000). Martin (1997:87) further associates the concept with ‘information economics’ by defining it as a society in which there is a growing rate in the production, distribution and use of information. The ‘Digital economy’, as term and concept, has been used in this book in keeping with ‘information society’ as espoused by Schienstock et al. (1999), who view it from an interdisciplinary perspective to describe:

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  An information economy;

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  A post-industrial society;

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  The end of the industrial labour society;

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  A knowledge society;

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  An ‘informatized’ industrial society; and

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  A learning society.

The concept of the information society as a synonym for an information economy was put forward by the anthropologist and biologist Todao Umesao. Later, in 1963, Joho Sangyo Ron wrote about “knowledge industries” and postulated that the “electronic industries”, especially information, communication, and education, would be as pivotal for the structural transformation of the industrial society as the intermediary industries - transportation and heavy industries - were for the transition from the agricultural to the industrial society. The notion of an information society as a post-industrial society was proposed by Daniel Bell (1989) when he perceived social change as a multidimensional process, wherein economic sectors, vocational groups, fundamentals of technology, and basic social principles are radically shifted. Consequently, the post-industrial society is founded on the growing importance of the information sector as opposed to the production of goods. Production in such a society is primarily dependent on information rather than on raw materials and energy. Bell further observed that in the industrial society, goods were produced primarily by machines, whereas in the post-industrial society or information society, production is centred on acquiring and utilising information and knowledge through Information and Communication Technologies (ICTs).

The current transformation from the industrial to the knowledge economy is characterised by all sectors and industries of an economy relying largely on information. Moreover, the transformation to a knowledge society is characterised by human work occurring more and more using ICTs. Steinmüller (1981) perceives today’s information or knowledge society as an ‘informatized’ industrial society. Regardless of whether one refers to the knowledge society, the information society or the digital economy, these terms and concepts are all founded on the importance of the computer as a knowledge-based machine that incorporates the knowledge bases and conclusions of experts. Such a society is characterized by an enormous growth in the amount of scientific and non-scientific knowledge; different knowledge-based techniques and types of mechanized knowledge; an expanding information sector; investment of information in technical development or industrial products; and the information explosion (Schienstock et al., 1999). This characterization mirrors Luhmann’s view (as cited by Qvortrup, 2007) that the knowledge society is typified by functional systems which are bound to a knowledge base. A knowledge society is therefore characterized by the provision of more products with built-in intelligence and the transformation of organizations into knowledge-based entities. Castells (1997) opines that it is the immediate relationship between knowledge generation and knowledge application through learning that becomes the most fundamental aspect of an information society.