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Effects of Data on the New Economy

The article published by the economist in 2017 was focused on the various ways through

which data has changed the modern world. In this article, data was compared to the effects of oil

refinery since both industries have resulted in similar effects. Introduction of data was identified

as an occurrence which has introduced major advancements in the modern century (The

Economist). Digital information has changed various sectors such as business field,

infrastructure, politics, and economics. The flow of data has changed the operations of

businesses in that management have identified the ways through which they can expand their

operations. Other fields such as new economics have been introduced as a result of the

development of various platforms such as the social media where industries such as business

marketing and advertisement have been enabled to grow (The Economist). Digital information

was identified as one of the primary reasons why the introduction of globalization was possible

especially in the modern century.

According to the information provided by this article, digital information is unique due to

various reasons. Unlike other resources, the processes of extraction, refining, and marketing of

this resource are conducted in different ways. The rules of markets have therefore been changed

by these aspects since various parties such as investors have been forced to come up with

strategies which are effective in each process (The Economist). The introduction of data has
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therefore forced different companies to employ relevant approaches to its control since the

process contributes to the growth of their economies.

The relationship between data and oil refinery in this article was based on various factors

such as their role. According to the Economist, data and oil are resources which play similar

roles in terms of the production of feedstocks for the modern economy. The process of an oil

refinery has made it possible for human beings to exist in the modern world especially due to the

production of products such as plastics and drugs (The Economist). Likewise, data has made it

possible for the business sectors of various nations to operate effectively. The flow of digital

information has also been applied in the operations of governments, a factor which plays a key

role in the growth of their economies. The purpose of data in the new economy has therefore

been significant due to the contribution in various sectors such as the business field and

infrastructure.

According to this article, the quality of data continues to change. This factor has

contributed to the profits which are experienced by companies which operate in the e-commerce

industry such as Amazon. Such companies have employed the process of data refineries to

dominate in the global market and gain a competitive advantage. The growth of the new

economy has been based on the analysis of rapid real-time flows of unstructured data (The

Economist). Nearly all sorts of devices have been transformed into sources of data. Digital

information has therefore transformed the modern world since people have been forced to adapt

to the application of data in their routine activities this factor has forced the quality of data to

develop to improve the performance of such devices.

Data economy has forced most companies to apply the use of digital information in their

operations. Modern companies have been required to attract new users through the application of
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data in various processes such as advertisement and marketing. Users, on the other hand, have

also been forced to employ the use of data to gain access to the services provided by customers

through the application of equipment such as computer systems. Digital information has

therefore transformed the relationship between companies and users of their services especially

those who rely on e-commerce services.

Information obtained in this article can be related to various course topics such as perfect

competition, monopoly, production and costs, and supply and demand. Modern organizations

have been enabled to make super-normal profits as a result of the application of digital

information. The process of perfect competition has therefore been enhanced by the introduction

of the data economy in the current century. The entry of data in the field of business has

interfered with the operations of businesses in that they have been forced to operate based on the

achievement of their super-normal profits. Digital information has also contributed to the growth

of the number of sellers and buyers (The Economist). This factor has influenced the state of

perfect competition in both local and global markets. Both buyers and sellers have gained more

insight concerning the market as a result of data application. This feature has changed the overall

state of perfect competition.

Production and costs have also been influenced by the introduction of digital information.

The use of data has introduced new strategies which are currently being employed by companies

to minimize the costs experienced in the production process. An example of such strategies

includes the most effective ways through which raw materials can be obtained. Suppliers who

provide the best terms have also been identified by companies as a result of the application of

digital information (The Economist). As a result, modern companies have been able to minimize

their production costs as a result of data refinery.


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Supply and demand is a topic which can be related to the information provided in this

article. Digital information has led to the introduction of social media platforms where customers

are capable of sharing information with their sellers concerning a particular product and its price

(The Economist). Such information is currently being employed to dictate the state of demand

and supply. Modern companies are employing such platforms to improve the supply of their

products through various processes such as marketing and advertising. It has, therefore, become

possible for most organizations to obtain a balance between demand and supply due to the

application of digital information.

From this discussion, it can be concluded that the introduction of data is an occurrence

which has changed several fields in the current century. Some of the fields which have been

influenced by this introduction include business and the economies of different nations.

Businesses have been able to take advantage of digital information in processes such as

marketing and advertising. The competition among both local and global firms has been boosted

by the application of digital information. Other topics which have been influenced by the data

refinery include supply and demand. It can, therefore, be argued that the information provided in

this article is related to various course topics such as perfect competition, supply and demand,

and production and costs. The article provides a detailed review of the various ways through

which various field such as business have benefited from the process of data refinery.
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Work Cited

The Economist. "Data Is Giving Rise to A New Economy." 2017.

https://www.economist.com/briefing/2017/05/06/data-is-giving-rise-to-a-new-economy.

Accessed 22 May 2019.

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