Google glasses provide a view of the Digital Economy

NBN Co and the Federal Government have been raving on for a while about the Digital Economy in their “Digital Economy strategy”.

So what is it, and what’s the big deal?

Essentially, the Digital Economy refers to economic transactions on the internet.  And as Gerry Harvey can tell you, it is a big deal.  Its growth shows the transition from traditional economy (buying and selling in person) to newer ways of transacting (e-commerce) over the web.  The massive growth of Ebay and Google are clear examples of how the Digital Economy is booming.

Why is it so important?

Well, let’s start with a little perspective.  The whole Australian economy GDP is around $1.8 trillion.  Yes, that includes everything, including mining, manufacturing, the lot.

According to research firm IDC, the size of total worldwide e-commerce will be $16 trillion in 2013.

So the “Digital Economy” is an economy that next year, will be almost 10 times the size of the Australian Economy. If the Digital Economy were a country, its GDP would be just smaller than the USA and about twice as large as China.

And that’s just the start.  There are now opportunities to exploit the Digital Economy in ways that would have sounded like science fiction just a few years ago.

Actually, they still sound like science fiction.   That’s how fast this Digital Economy is moving.

Let me give you just one example.  Google glasses, due out later this year (the picture is of Oakley Thump Glasses, said to be very similar to the Google design).

Google glasses are a wearable smart device (including processing power, a smartphone, GPS and a camera) that will link you to Google as you move around the physical world.  Google call it augmented reality.

How so? Well, remember Google is all about targeted advertising.  Their success has been based on being able to learn about the buying characteristics of a person and target advertising to those people who are more likely to buy, based on their preferences.

Let’s say you are wearing your glasses while wandering through the City, and you look at a restaurant.  A pop-up ad will appear in your glasses showing the special deal available right now at that restaurant.

Or maybe you look at a landmark.  The glasses will show you information about that landmark, and also any comments made about that landmark by your friends.

If facial recognition software becomes accurate enough, the glasses could remind a wearer of when and how he met the vaguely familiar person standing in front of him at a party  (I need this now!)

This is a fascinating scenario – one which brings totally new opportunities and challenges.  Like, for example, how will the regulators deal with the potential for an ad in your glasses to be triggered just by looking at a competitor’s ad?

So – yes – the digital economy is a big deal, and it’s only going to get bigger.

Read more about Google glasses here..