Systems and Operations Management - Essay Example

This study tries to bring to light important aspects of the shift from physical to a digital economy and how this digital economy has led to crucial development in the economy of the republic of Korea. A new breed of technology springs out every 60 years or so of which without noticing this new breeds tends to affect the economy positively as a whole; hence, developing it. It introduces new social classes and leads to a different approach to business. In current times, the economy is highly digitised which is characterized as vast, automatic and invisible with adverse effects on employment.

An example given is the digitisation of air travel, whereby 20 years ago one had to visit the airport to book a flight, but in current times one can book a flight and pay for it using online services. It is estimated that in less than two decades the digital economy will be as huge as the physical economy (Sears, 2007, 41). It is growing at an alarming rate and people should not underestimate the rate at which it is changing due to the simple fact that unlike the physical economy, the digital economy has no limits. . As the global economy is interconnected and integrated it is significant to understand the effects of information technology on the economy in general and establish frameworks that will lead to the prosperity of the global economy as a whole (Eui-Hwan, 1999, 2).

Information systems and technology has led to crucial and evident development on the economy. In macroeconomic perspective information technology has affected and enhanced the factors and patterns of productions, investment and employment. In a microeconomic perspective, it has enhanced business transactions in that it has led to effective and efficient modes of communication and an interpretation of information among employees who are key players in economic development (Eui-Hwan, 1999, 2). In Korea informational technology has led to direct and indirect development of its economy.

In 1995, the value of its information and communication industry was 30 trillion won, this figure rose significantly to 43 trillion won three years later in 1998. Surprisingly enough its GDP also from 7.9% to 9.6%. Consequently, that year employment in that industry increased to 507,000 from 395,000 in 1995. In the information and export industry exports increased to 30billion dollars in 1998 and price increase rates in this industry services and equipment are -0.2% and 6.7% in 1998 which is lower than the national average (Eui-Hwan, 1999, 1).

The role of the Korean government while dealing with economic failure has also changed from solving market failure to solving system failure, where system refers to the players involved such as the corporate, the individual person, university etc, and the environment which includes banking systems, labour