The Global Information Infrastructure: From the Virtual Enterprise to the Virtual Economy

Abstract

Today’s economic landscape is characterized in the popular press by the metaphors “globalization”, “knowledge-based economy”, and “information society.” Globalization refers to the worldwide scale of production, distribution and ownership. Transnational corporations organize their production from facilities in several countries. Financial markets are integrated and R&D is spread around the globe. “Knowledge-based society” refers to the recognition of knowledge as a proxy for technological change and as a key factor in economic growth. Competition in new products and improved product quality replaces the traditional price competition. “Information society” refers to the information and communication technologies (ICT) as a new techno-economic paradigm, revolutionizing how we do business and affecting many aspects of our daily life. These three facets are, of course, interrelated and mutually reinforcing. One feature of the new economic order, which also relates to the other three, and which we want to bring to the forefront in this paper, is the growing importance of virtual enterprises and their impact on the emergence of a virtual or digital economy. The “virtual” or “digital” economy refers to an era of business without borders (temporal, geographical, functional or organizational) fueled by the activities of entities called “virtual enterprises” which operate in high-performance networks of suppliers, competitors and consumers.