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Socio-Economic Impacts and Influences of E-Commerce in a Digital Economy (2)Filed Under: General

Adoption of new information technologies, particularly e-commerce, is expected to result in improvements in firm performance, such as reducing transaction costs and closer coordination of economic activity among business partners (e.g., Malone et al., 1987; Mukhopadhyay et al., 1995). E-commerce specifically (especially B2B) is predicted to result in lower coordination or transaction costs due to automation of transactions online, as well as productivity and efficiency gains (Amit and Zott, 2001; Lucking-Reiley
and Spulbur, 2001; Wigand and Benjamin, 1995). E-commerce also is expected to facilitate entry into new markets and the extension of existing markets (Garicano and Kaplan, 2001), and greater integration of systems with suppliers and customers (OECD, 1999; Timmers, 1999; Wigand and Benjamin, 1995). As e-commerce continues to grow rapidly, it could have significant effects on the social and economic structures of economy. The impacts of these changes are diverse and may even widen the digital divide among nations, alter the composition of trade, disrupt labor markets, and change taxation (Anonymous, 2000). Widespread use of the Internet for e-commerce may have ramifications for intellectual property rights, privacy protection, and data filtering, etc. Therefore, in the digital economy, it is becoming imperative to know how e-commerce affects organizations and society and raises social concerns. Some of these effects of e-commerce are unintentional and create adverse business and personal conditions that could have societal consequences. Social and economic aspects of ICTs have been studied by a wide variety of researchers and practitioners for over 50 years (Dutton, 1999a; 1999b). However, the influences of e-commerce are far bigger than imagined before (Sharma and Gupta, 2003b).

This chapter describes the various socio-economic impacts and influences that have been created by e-commerce in a digital economy. The chapter is divided into four sections. The first section provides the definition and components of the digital economy. The second section discusses the positive influences of e-commerce for businesses. The third section discusses the details of sociological influences of ecommerce. The fourth and concluding section discusses the economic impact of ecommerce in the digital economy.

Taken From : Digital Economy – Impacts, Influences and Challenges