In traditional concept of economy, place and time were the major boundaries for economic activities to expand. Local sellers have difficulties to sell their product outside their region and consumers have limited choices of products to buy.
People activities in economic term begin as gatherer then develop into agricultural societies. As the industry revolution changes the face of the world in early past decade, the world societies transform into industrial era.Although the industrialization changes the face of economy system, it cannot fully tackle the problems of speed and span of products and information that can reach to customers globally. These difficulties now can be coped because of rapid growth of information system and technologies. The globally using of television, mobile phone and internet promote the new era of economy.
Based on the knowledge and connection and through the computer network have promoted the new type of economy – the network economy. Information and Communication Technology (ICT) is the basic element of applying the network economy.The reformation and development in ICT have change many countries to become new forces of economy in the world.
China, South Korea, and India are examples of the country that successful using ICT as major element to increase their economic growth. The ICT changes dramatically the way of economic activities. Places and times are no longer become barrier for economic activities. The on-line shopping, using computers in manufactures and applying information technologies in banking transaction bring convenience way for people in new economic activities.Several factors as foundation of the network economy are connectivity, innovation, participation and efficiency. Many years before, because of geographical place and no certain connection tools have make difficulties for people to reach other people in other societies. The invention of mobile phones, facsimiles, internet and the rapid development of computer technologies have remove the barriers. The world now is connected and companies easier to maintain their business.
The connectivity promotes business not only for local area but also for entire global area.The rapid development in ICT also promotes the new innovation of economic activities way. For example, in education area people who live in other continent can get diploma without the obligation to attend the class which location in the different continent.
They can have on-line courses and on-line exams in process of getting the bachelor. Another example, someone who lives in Dubai can easily buy a bottle of expensive wine from seller in French via e-bay because new innovation way of business transaction.Furthermore, the economy will become a network because the presence of participation of people who involve in the economic activities. The company such as You Tube, Face Book and Google were established from participation of small amount of people who had bright innovations to make new way of business.
Participations and collaborations in Small Business Enterprises are the key factors for company to extend their business globally. Finally, the efficiency is the last factors that build the network economy. The new way of handling activities in business result in cost reduction of materials and times.Using of compact disc, flash disk and soft copy form of data as external storage have decline the cost of paper materials in business.
Video conferences through the internet reduce the time of exchange information as compare using of mail in past years. Although the network economy system seems to be applied in all business activities in the world today, does the network truly global? Dr. Pekka Tarjane, a secretary of general International Telecommunication Union (ITU) in his paper “Is the Network Economy Truly Global?” stated that there are three steps of network economy to reach actually the global world space. First is the communication must be able to across geographical space in certain speed of time.
Second is the network economy have to walk on connectivity and inter-operability which mean that people can reach the world, and finally to meet the criteria of global, network economy have to give availability and affordability for people which mean that the world must have ability to reach people in everywhere and every place. According to those steps, to establish a truly global network economy is not an easy way.The different absorption and development of information and technologies among countries in the world provoke several problems of implementation of global network economy. Based on data of Dr. Pekka Tarjane’s paper, there was unequal distribution of utilization of internet technologies in the world. He stated that almost 97 percent internet hosts are located in the high income countries which their population just contribute 16 percent from total world’s population.
In almost 6 billion of people population in the world, there is just small numbers of people have access to the internet.This situation makes the perspective that the network economy is not truly global. As conclusion of his paper, Dr. Pekka Tarjane stated that if people can reach the world then the world has to reach the people too. This argument stand for the several reasons which are social justice that people have right to communicate, market potential lies in the emerging economies and information technologies are freedom technologies.
It is fact that the network economy is not apply globally in recent era, however the process of continuing of the application this new economy will bring bright results in the future for the people.