Digital is at the heart of the significant societal changes of the 21st century. It shapes new work practices (despatialization of work, leading role of digital platforms, applications, startups, agile methods, etc.). Digitalization is the adoption and application of digital technologies, thus generating new opportunities for value creation for companies. However, we must still understand how and why digital technologies are transforming entrepreneurial practices.
So, what do digital technologies bring about new opportunities for business creation digital technologies bring about new opportunities for business creation? How and why do they transform entrepreneurial practices? And what are the economic models and entrepreneurial strategies that stand out? To answer these questions, we will dissect entrepreneurship in the digital age.
What Do We Mean By “Digital Technologies”?
The significant transformations in entrepreneurship brought about by digital.
What Do We Mean By “Digital Technologies”?
To understand the digital transformation of companies, we still need to agree on the definition of digital technologies, also called digital technologies.
Digital technologies include computing, telecommunications (smartphone, radio, television, computer, etc.) and the Internet. In other words, they combine all the technological means, making it possible to share, store, send, read, display and use digital information.
Have you noticed the interconnectivity of digital equipment? Indeed, your digital devices can communicate with each other since they use the same language and the same information: bits ( the contraction of “binary”, binary, and “digit”, figure). This language is based on homogeneous data, coded in a 1/0 binary system, that all digital technologies can display, use and store. In short, digital technologies are capable of informing and communicating.
In short, digital technologies make representing information as a number possible. You will therefore not be surprised to learn that the English terms “digit” (number) and “digital” (which uses numbers) are derivatives of the Latin digits, “finger”: we used to count with our fingers!
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It is possible to distinguish three types of digital technologies: digital artefacts, digital platforms and digital infrastructures.
Digital artefacts refer to a new product or service’s digital components, applications, or features. Let’s take the example of the connected toothbrush, which details the brushing zones with monitoring by mobile application.
Digital platforms are virtual intermediaries that facilitate, directly or indirectly, the exchange of products/services, information and content between users. Uber, Amazon, Airbnb and Netflix are digital platforms.
Digital infrastructure encompasses the digital technology tools and systems that provide the communication, collaboration and IT skills necessary for innovation and entrepreneurship. Examples include fab labs, maker spaces and hackerspaces.
GOOD. Now that we have covered digital technologies, it is appropriate to ask ourselves the following question: how and why are digital technologies transforming entrepreneurial practices?
The significant transformations in entrepreneurship brought about by digital.
Ease Of Scaling
Scale up. It is the spearhead of the startup nation, which nevertheless struggles to find such a simple and impactful French translation. Digital technologies indeed allow companies to scale up more quickly, that is to say, to generate income with increasing returns to scale.
The principle of scale is simple: each unit produced costs less than the previous one, thanks to economies of scale. How can we reduce unit costs in this case? Increasing production volumes spreads fixed costs over a more significant number of units produced. So, how do digital technologies enable businesses to scale up?
Driven by digital technology, everything is going drastically faster: connections, sharing of information, massive collection and processing of data, decision-making processes, collection of feedback, interaction with users… Digital technologies completely bypass the entrepreneurial process. In addition, they give companies a dynamic, very flexible organization, allowing them to constantly and quickly adapt their infrastructure to market requirements. Finally, in addition to providing a new scope to strategic alliances and partnerships, digital technologies create “network effects”: the more the number of users of the product/service increases, the more the product’s value increases. Same product/service.
From then on, the scale makes it possible to aim for a growth curve that is no longer linear but exponential. Digital technologies facilitate this.
A Tenfold Strategic Reach
Creating value is good, but delivering this value proposition to your customers is even better.
Digital technologies enable the involvement of an ever-larger, more diverse, constantly evolving set of stakeholders. Implementing an effective digital strategy is an excellent way for businesses to reach more prospects. In fact, for entrepreneurship in the digital age, it is essential.
Digital involves creating and mobilizing different networks, which bring together all the material and intangible resources that entrepreneurs share by making connections and relationships (information networks, personal entourage, technological resources, networks of alliances, networks of investors, social networks, etc.). Digital technologies multiply connections, allowing you to reach previously inaccessible markets, customers or partners easily.
Particularly Rapid Operationalization Speed
Bringing a product or service to market has never been faster than in the digital age. And yet, many entrepreneurs are slow to move from ideation to action. Do you not know where to start? Are you having trouble getting feedback from your users? Are you getting bogged down in developing a business plan, preventing you from moving forward a little more daily? In this case, it may be time to rethink your digital strategy.
Digital technologies are short-circuiting the speed of companies’ commercial strategy in four aspects:
they accelerate the speed of product launches
they make decision-making faster
They greatly accelerate the creation and mobilization of different networks.
So why not enjoy it?
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