Digital Economy

МИНИСТЕРСТВО ТРАНСПОРТА РОССИЙСКОЙ 

ФЕДЕРАЦИИ 

ФЕДЕРАЛЬНОЕ ГОСУДАРСТВЕННОЕ БЮДЖЕТНОЕ 

ОБРАЗОВАТЕЛЬНОЕ УЧРЕЖДЕНИЕ ВЫСШЕГО ОБРАЗОВАНИЯ 

«РОССИЙСКИЙ УНИВЕРСИТЕТ ТРАНСПОРТА (МИИТ)» 

____________________________________________________________ 

Институт экономики и финансов 

Кафедра «Экономика и управление на транспорте» 

 
 
 
 
 
 

L.V. Lapidus  

 
 
 
 

 
 

DIGITAL ECONOMY 

 
 
 

Учебное пособие  

 
 
 
 
 
 
 
 
 
 
 
 
 

Москва – 2018 

 

МИНИСТЕРСТВО ТРАНСПОРТА РОССИЙСКОЙ ФЕДЕРАЦИИ 
ФЕДЕРАЛЬНОЕ ГОСУДАРСТВЕННОЕ БЮДЖЕТНОЕ ОБРАЗОВАТЕЛЬНОЕ 

УЧРЕЖДЕНИЕ ВЫСШЕГО ОБРАЗОВАНИЯ 

«РОССИЙСКИЙ УНИВЕРСИТЕТ ТРАНСПОРТА (МИИТ)» 

____________________________________________________________ 

Институт экономики и финансов 

Кафедра «Экономика и управление на транспорте» 

 
 
 
 
 
 

L.V. Lapidus  

 
 
 
 

 
 

DIGITAL ECONOMY 

 
 
 

Учебное пособие для бакалавров и магистров по направлениям «Экономика» 

и «Менеджмент» 

 
 
 
 
 
 
 
 
 
 
 
 
 

Москва – 2018 

 

УДК 004 

Л 24 

 

             Lapidus L.V. Digital Economy (на англ. яз.): Учебное пособие для бакалавров и 

магистров по направлениям «Экономика» и «Менеджмент».  – М.: РУТ (МИИТ), 2018. - 42 с. 

 

The basics of the digital economy are disclosed in this tutorial. The correlations between the 

concepts “digital economy”, “Industry 4.0”, “fourth industrial revolution” are substantiated. The 

digital economy evolution is analyzed and the transition to new models of production, distribution, 

exchange and consumption is justified. It is shown, that at present, the main goal is to trigger a 

systemic transformation, what implies the search for new mechanisms and tools to strengthen the 

participation of the state, business, and every citizen in the development of the digital economy in 

order to achieve a comprehensive result at all levels, from small businesses to the state as a whole.  

 

 

Рецензенты: 

Профессор кафедры «Экономика, организация производства и менеджмент» РУТ (МИИТ), 

д.э.н. О.В. Ефимова. 

Начальник отдела управления доходностью АО «Федеральная пассажирская компания», 

к.э.н. А.А. Губанова. 

  

 

 

 

 РУТ (МИИТ), 2018 

 

 

 

 

 

 

 

 

CONTENT 

 

Introduction.

1. What is the Digital Economy?

2. The Reference of the Concepts of "Industry 4.0" and "Digital economy".

3. What is the Fourth Industrial Revolution?

4. Evolution of the Society and the new Technological shift.

5. The Digital Economy Evolution.

6. The Origin of Online Business and The Dotcom Crisis.

7. The Digital Products and Electronic Services New markets.

8. Industry 4.0 Technologies and Business Benefits.

9. Signs of the Digital Economy.

10. Transformation of Business Models.

11. Decentralized Production.

12. Digital Leadership Strategies and Business Prospects.

13. The Industry Features of Digital Transformation.

14. The Key Principles of Digitalization and Industry 4.0.

15. System Digital Transformation: Objectives and the Necessary Conditions for 

Successful Transformation.

Conclusion.

Bibliography.

Glossary.

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Introduction 

 

To live in the era of technological change is pure luck.  

Digital economy, Industry 4.0, e-business, blockchain and bitcoins - every day brings new 

questions that you seek answers to. Everyone caught the "digital fever". Companies 

are launching digital transformation, restructuring business processes and designing 

new business models. States direct all efforts towards improving the country's 
competitiveness and the quality of life of the population. Citizens improve their 
digital literacy and develop future competencies. The world is preparing for the 

fourth industrial revolution.  

(L.V. Lapidus) 

 

The digital economy is a “living”, constantly evolving “organism”, whose behavior cannot 

be fully studied. Every day brings more and more new technological solutions with the according 

terms that are the results of the latest transformations and the need to make decisions on the choice 

of alternatives. The most important goal is the one of gaining, obtaining knowledge in the field of 

digital economics and technology, and of understanding of cause-effect links and correlations 

brought to light since 1990. 

For example, many countries caught the real “digital fever”, when Bitcoin (Bitcoin, BTC), 

which appeared in 2009, only in 2017 showed a rapid growth from $ 800 to $ 11,000. The total 

capitalization of the Bitcoin market by the end of 2017 reached 300 billion US dollars. For 

comparison, the world turnover of bitcoins at the beginning of 2014 was estimated at 11 billion US 

dollars [coinmarketcap.com]. Other popular cryptocurrencies are Peercoin (PPC, 2012), Dogecoin 

(DOGE, 2013), Etherium (ETH, 2015), etc. The market of all cryptocurrencies at the beginning of 

2018 was $573.98 billion. New terms appeared (ICO, token, mining farms, etc.). All this led to the 

emergence of new types of electronic services: services of crypto farms, bitcoin farms, crypto 

funds, etc. 

According to the world practice, the evaluation of the digital economy is done with respect 

to the Internet markets, whereas Internet-dependent markets are appraised separately. The same 

practice is adopted in the Russian Federation. Thus, by the end of 2016, the share of the digital 

economy in the GDP of the Russian Federation was estimated at 2.8% of GDP (Internet markets) 

and 19% of GDP (Internet-dependent markets). The e-commerce market was estimated at 1238 

billion rubles, the digital content market at 63 billion rubles, marketing and advertising - 171 billion 

rubles, infrastructure and software - 2000 billion rubles. 2.5 million jobs have been created in the 

Internet industry1.  

 

1 According to the Russian Association of Electronic Communications (RAEC). Zvereva T. Internet economics: zones 
of stability. Thematic pages of RBC +. April 13, 2016. P. 3; Economy Runet. Study “Economics of Internet Services 
and Content Markets in Russia 2014–2015» / RAEC, HSE. ЭкономикаРунета.рф. P. 5.  

The aim of this tutorial is to reveal the methodological foundations of the digital economy, 

the nature and essence of the main definitions of “digital economy”, “Industry 4.0”, “fourth 

industrial revolution”, and the technologies massive penetration of which will lead to the transition 

to Economy 4.0. Let us describe the key principles of digitalization that lie in the basis of 

transformation of business processes and business models of modern companies in all sectors of the 

economy. To substantiate the importance of digital technologies in the formation of a new 

technological shift and to show the role of the digital economy in launching the process of large-

scale digitization of social and economic systems at all levels. 

 

Below are links to resources where you can find additional materials: 

Official Site phd L.V.Lapidus: www.larisalapidus.ru 

Blog phd L.V.Lapidus  of interdepartmental course MSU "Digital Economy: Managing e-

business and e-commerce" group VKontakte: http://vk.com/club76268050 

Blog on YouTube: https://www.youtube.com/user/larisalapidus 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1. What is the Digital Economy? 

 

Changes over the course of almost 30 years, pertained to the evolution of digital 

technologies, led to transformations that few could predict. Since 1990, since the opening of access 

to the Internet for all people on our planet, business has been forced to constantly respond to the 

challenges of the external environment, which is currently described by the highest degree of 

dynamism, complexity and uncertainty, regardless of industry sector2.  

As the President of the Russian Federation V.V. Putin noted, “digital economy is not a 

separate industry, in fact it is a way of life, a new basis for the development of the system of 

government, economy, business, social sphere and the whole society. The formation of the digital 

economy is a matter of national security and independence of Russia, the competitiveness of 

domestic companies”. 3 On July 28th, 2017, the Government of the Russian Federation approved and 

ratified the Program titled “Digital Economy of the Russian Federation”. 

Understanding of the digital economy in the strict sense is associated with the consumption 

of electronic services and services, in a loose sense - with the penetration of cross-cutting digital 

technologies of Industry 4.0. At the end of 2016, the share of the digital economy in the GDP of the 

Russian Federation was estimated to be 2.8% of GDP (Internet markets) and 19% of GDP (Internet-

dependent markets) [RAEC, www.rif.ru].  

In terms of scale and strength of the technological impact of the external environment on 

business, industry and economy of the countries, the transformations that are currently in process 

have no analogues ((On-demand economy, Mobile economy, Sharing Economy, Wikinomics 

[Tapskott D., 2009, p. 104; Howe, Jeff, 2009; Lapidus LV, 2016 (a); Lapidus LV, 2017 (b)], the Hi-

Tech Gift Economy [Barbrook R., 1998], Gig Economy (Gig Economy)).  

In Lapidus L.V.’s opinion, the digital economy is a set of relationships evolving in the 

processes of production, distribution, exchange and consumption, based on the use of online 

technologies and aimed at meeting the needs with respect to life benefits, that, in turn, requires 

development of new ways and methods of management and effective tools of state regulation» 

[Lapidus LV, 2016 (g), p. 4-11]. 

This is primarily due to the reduction of the life cycle of innovations, that is, the acceleration 

of the emergence of new generation digital technologies, which allow us to increase customer 

value, attract the attention of an increasing number of consumers and generate additional demand 

 

2 Lapidus L.V. Electronic Economy: New Opportunities for Business // Prospects for the development of e-business and 
e-commerce. Materials of the II Interfaculty Scientific-Practical Conference of Young Scientists: Moscow, Moscow 
State University named after M. Lomonosov, Faculty of Economics; November 25, 2015: Reports and presentations. M 
.: The Faculty of Economics of the Lomonosov Moscow State University. M., 2016. P. 4–11. 
3 TASS. URL: http://tass.ru/ekonomika/4390974 

for products and/or services. This is a reason why the first sector of the economy that responded 

quickest to the impact of changing in consumer preferences was the sector of services.  

E-commerce, online banking and the media began to transform business models in 1994. 

[Lapidus LV, 2016 (c)] Later, the first trading digital platforms (marketplaces) and virtual 

exchanges are appeared. In the years 2000-2010, it was possible to observe the rapid development 

of new types of digital products and electronic services. Traditional business began to actively 

respond to the opportunities and threats of the digital economy in the early 10s.  The massive 

penetration of Industry 4.0 technology into various industry segments began in the period 2015-

2017. 

Digital economy is a new business environment that forces business to respond first with 

respect to threats, as well as new opportunities of online technologies: reducing transaction costs, 

pointed targeting and wide coverage of the target audience, increasing productivity, reducing time 

spent on online communications with partners and customers, increasing customer satisfaction 

through quick and effective feedback. Omni-channeling has become a determinant of the 

competitiveness of online and offline companies.  

Taking into account the ongoing transformations of business models, the digital economy 

should be defined as the development of business processes and business models on the basis of 

digital technologies and the exchange of big data, aiming at advancing business competitiveness by 

increasing consumer value and achieving such key results like reducing the costs and increasing in 

labor productivity.  

We are talking about both: business models that are typical for companies that have built 

their businesses on the Internet, as well as traditional business that historically conduct business 

offline in various sectors of the economy (mining, agriculture, manufacturing, services). 

  

2. The Reference of the Concepts of "Industry 4.0" and "Digital economy". 

 

The dating of the first mentioning of the terms goes into the distant past: “digital economy” - 

1995, “Internet of things” - 1999, “Industry 4.0” - 2011.  

The term Industry 4.0 originated in 2011 at the Hannover Fair and was intended to mean a 

radical transformation of global value chains4. Currently, the term is popular in Germany as the 

term for the government initiative aimed at transforming industry as an integral part of the country's 

strategic development.  

 

4 Schwab Klaus. The fourth industrial revolution / lane. from English Klaus Schwab. M .: Publishing house "E", 2017. 
P. 16. 

According to BCG, 85% of German enterprises have already adopted or are planning to 

implement the principles of Industry 4.0. in the next 1-2 years5. The PwC report noted that Industry 

4.0 implies cross-cutting digitization of all physical assets and their integration into the digital 

ecosystem along with the partners involved in the value chain. Over the next five years, the 

companies participating in the PwC survey expect an increase in annual revenue on average by 

2.9% and cost reductions of 3.6% on average per year. PwC considers Industry 4.0 as a concept 

with the following main ideas: digitalization and integration of vertical and horizontal value chains; 

digitalization of products and services; digital business models and customer access6. Digitalization 

of internal operations is launched in all countries all over the world, but Japan and Germany are 

considered leaders in this prospect. 

In author’s opinion, Industry 4.0 is a set of relations developing in processes of production, 

pertained to the intromission of digital technologies (Industry 4.0 technologies) and aimed at 

improving the competitiveness of business and the country. 

From the perspective of Ludwig von Bertalanffy’s system theory, Industry 4.0 is a system 

consisting of a chain of interrelated production processes, an integral element of which is the 

exchange of data in digital form between system links (people, machines, cloud (data centers)) 

using digital technologies. Industry 4.0 technologies penetrate both: the production cycle of services 

and the production cycle of goods. Based on this definition, we can conclude that the relationship 

between the concepts of "Industry 4.0" and "Digital Economy" as those of a part and a whole. 

With respect to digital economy, in the Russian Federation one should rather not adhere to 

the term “Industry 4.0”, but “Industry 4.0 technologies”, which are digital. The technologies of 

Industry 4.0 include: Big Data, neurotechnology, artificial intelligence (AI) and machine learning, 

quantum technologies, distributed registry systems, Internet of Things (IoT), Industrial Internet 

(IIoT), wireless technologies, components of robotics and sensor technology, virtual technologies 

and technologies of augmented and mixed reality (VR, AR, Mixed R), cloud and mobile 

technologies, drones, wearable gadgets, blockchain, 3D printers, Agile technologies, new 

production technologies, etc. 

 

 

 

 

 

 

5 BCG. Russmann M. [et al.] Industry 4.0: The Future of Productivity and Growth in Manufacturing Industries, 2015. 
6 PwC Industry 4.0: Digital Enterprise Creation Report. World Review of the implementation of the concept "Industry 
4.0", 2016. 

3. What is the Fourth Industrial Revolution? 

 

Some experts view the terms “Industry 4.0” and “the Fourth Industrial Revolution” as 

synonyms.7 According to the World Economic Forum, The Fourth Industrial Revolution is a 

“mental model” for understanding and defining how the technologies change, how the value is 

created, shared and distributed through economic and social systems8. In fact, these terms are not 

synonyms for the reason that the perspective distinctive feature of the fourth industrial revolution is 

a large-scale transformation of all processes based not only on the digital technologies of Industry 

4.0.  

The technologies of the fourth industrial revolution are digital technologies (technologies 

of Industry 4.0), biotechnologies and technologies of precision medicine, new materials, 

neurotechnologies, new approaches to the conservation and generation of energy (Table 1). 

Table 1. 

Technologies of the forth Industrial Revolution 

 

On-line 

technologies

Industry 4.0 
technologies

Technologies of the 4th
Industrial Revolution

Internet and other 
Web-technologies:

1990-2000

2010-2010

2020-2030

Big Data, neurotechnology, 
artificial intelligence (AI) and 

machine learning, quantum 

technologies, distributed registry 

systems, Internet of Things 

(IoT), industrial Internet (IIoT), 

wireless technologies, 

components of robotics and 
sensor technology, virtual, 

augmented and mixed reality 
technologies ( VR, AR, Mixed 

R), cloud and mobile 

technologies, drones, wearable 

gadgets, blockchain, 3D 

printers, Agile technologies, 
new production technologies, 

etc.

Digital technologies, 

Industry 4.0 technologies, 

biotechnologies, 
precision medicine 

technologies, 
new materials, 

neurotechnologies, 

new approaches to energy 

conservation and generation, 

etc.

Digital economy
Economy 4.0

Author: Lapidus L.V. 

 

The fourth industrial revolution will be marked by the complex and comprehensive 

penetration of new technologies into all spheres of our life, which will entail a transition to the 

Economy 4.0. 

 

7 Schwab Klaus. The fourth industrial revolution / lane. from English Klaus Schwab. M .: Publishing house "E", 2017. 
P. 16. 
8 World Economic Forum, 2017. 

4. Evolution of the Society and the new Technological shift. 

 

The engine of any social lies in innovative technologies. As soon as the innovations appear, 

they begin to influence people, by changing the consumer behavior of the latter, shaping their taste, 

new needs, habits, and that, in turn, leads to an increase in demand and ultimately affects the 

structure of the economy. This formula of evolutionary development is not new. Thus, the 

dominance of the services sector in the structure of GDP became a characteristic feature of the 

developed countries economies at the end of the twentieth century. The share of the service sector 

in the structure of the economies of such countries like the US, France, Great Britain, Germany 

exceeded 70%. This trend was strengthened during the period of rapid development of Internet and 

information and communications technology. 

Information technologies contribute to the emergence of new industries and the growth in 

demand for services based on IT technologies, leading to improved interpersonal communications. 

The impact of IT-technologies in the growth of the share of the services sector is estimated at 15%. 

At the same time, with innovative development, the society brings forward new demands on 

education. 

Let us turn to the ideas of one of the authors of the post-industrial society and the author of 

the book “The Third Wave” Alvin Toffler, according to whom the development of mankind passed 

through three waves, three leaps of scientific and technical progress, which predetermined different 

types of society: agrarian, industrial and postindustrial.  

The agrarian (pre-industrial) society, in other words, the traditional society with the 

dominance of agriculture (90% of the employed) and manual labor, is still inherent in some 

countries of Latin America and Africa. This type pf social development is marked by the fact that 

handicraft production did not contribute to the redistribution of the population in the structure of 

employment towards industry. In order for such a shift to take place, completely new technologies 

were needed that were necessary for the development of mass production. This shift took place 

later, when the industrial revolution was accompanied by accelerated processes of urbanization, the 

transformation of the economy, what ultimately, as a result of the transition from manufactures to 

machine production, led to the predominance of industrial production and the formation of an 

industrial society. 

The development of industry allowed to increase the welfare of the population, which 

affected the consumption that began to shift towards the service sector. There is an objective law: as 

the welfare of the population grows, the paying capacity increases too, as well as the consumption 

of services. People do not want to engage in routine work - be that at work and at home, there is an 

active transition of certain types of work to outsourcing, and therefore the need for services begins