Limitless Supply New Economy in the Digital Era (173 Pages)

Scarcity hypothesis is the cornerstone of traditional economic theory. However, in the digital era, new products such as Windows, Android, and Wechat have been introduced to the market. Traditional economic theory may not be able to explain various nez economic phenomena in the digital era. This book creatively proposes the concept of limitless supply and then discusses its implications for economy at both macro and micro-levels.It analyses and summarizes the basic features of limitless supply products, and compares the differences and similarities of how limited supply and limitless supply products are manufactured and marketed. The book also provides reasons for why manufacturers of limitless supply products create intangible assets. It argues that the scale of an enterprise producing limitless supply products depends on the number of users, whereas the scale of an enterprise producing limited supply products depends on the production capacity.This book is mainly written to construct a preliminary, simple, yet relatively comprehensive economic theory framework for limitless supply, and to interpret the phenomena and corporate behaviour. It further explores how enterprises providing limitless supply products grow financially. It also proposes the fundamental difference in growth models between enterprises providing limitless supply products and those providing limited supply products. The book also looks at how growth models can achieve fission growth. Contents 18 Foreword: New Economy Calls for New Theories 6 Foreword: Limitless Supply: Theoretical Innovation in the Era of New Economy 8 Preface 10 About the Authors 14 Acknowledgements 16 Chapter 1 New Economy Driven by Innovation and Digitalization 22 Demand Creation and New Consumption in the Era of Smart and Digital Economy 22 New Economic Increments Driven by Digitalization and Innovation 25 Why is the Acceleration in Technological Innovation Leading to a Deceleration in Economic Growth? 29 Trend of Future Economic Growth 35 Chapter 2 Limitless Supply Triggered by Innovation, Digitalization, and Technology 38 Traditional Economy — Scarcity of Resources and Limited Supply 38 What Exactly are Limitless Supply Products and Limitless Supply Economy? 40 Fundamental Difference between Limitless and Limited Supply Products 43 Overturning Traditional Economic Concepts 47 Intangible Assets and User Capitalization 49 Chapter 3 Influence of Limitless Supply and Technological Development on GDP 54 Categories for Innovation in Economics 54 Limitations of GDP Indicators in the Smart and Digital Age 56 How Important is Technological Innovation to GDP? 58 Influence of Different Types of Technological Innovation on Economy 62 GDP Calculation of Limitless Supply Products 65 Chapter 4 Unique Features of How Limitless Supply Products Generate Profits 68 Limitless Supply and Long-Tail Theory 68 Demand and Pricing of Limitless Supply Products 70 Price Discrimination — Differential Pricing Strategy 74 From 1 to N 77 Paid, Free, or Subsidized 79 Beware of the Deal Hunters 82 Case: Ofo hongbao bikes suffered huge losses caused by deal hunters 83 Integration of Limitless and Limited Supply 85 Chapter 5 How Enterprises Grow with Limitless Supply 88 Review of Traditional Enterprise Growth Models 88 How Do Vendors of Limitless Supply Products Grow? 89 Case: WeChat’s development and customer growth history 91 Viral Marketing and Enterprise Growth 94 User Growth Patterns of Limitless Supply Products 96 Case: History and success of zoom 101 Zoom’s business and profit model 101 Zoom’s rapid growth trajectory 102 What’s behind Zoom’s success? 103 Zoom takes off again 106 Chapter 6 Positive Feedback and Fission-Type Growth 108 Migration Cost and Lock-in Effect 108 Network Effect in Smart and Digital Economy 112 Positive Feedback and Fission-Type Growth 116 Chapter 7 From Product Competition to Ecosystem Strategy 122 Market Structure of Limitless Supply Products 122 Diversification to Overtakes on the Corner 126 Case: How did Google surpass Microsoft? 128 Case: How Toutiao overtook at the corner 129 Track-Seizing, Micro-Innovation, and Disruptive Innovation 130 Case: Competition between Tencent and Toutiao 136 Eight-month-long battle that started from a short video 136 What lit the fuse to this “Tencent–Toutiao legal battle” was a short video 136 Why did Zhang Yiming accuse WeChat of banning Toutiao products? 137 The “comment fight” in WeChat Moments kicked off the “Tencent–Toutiao legal battle” 137 As competition intensifies, will Tencent completely block Toutiao-related products from WeChat’s ecosystem? 138 Is the long-running bitter Tencent–Toutiao legal battle a battle for stock? 140 Douyin “random filming” 141 Crossover and Ecosystem Competition 142 Case: Alibaba’s ecosystem 145 Chapter 8 Reflecting on New Policies in the Era of New Economy 148 From Rivalrous to Non-rivalrous 148 Tragedy and Comedy of the Commons 150 Policy Analysis in the New Economy Era 151 Bibliography 156 Appendix: Theories and Simple Models of Limitless Supply Economics 160 How Limitless Supply Overturns the Scarcity Hypothesis and Market Clearing 160 Supply–Demand Analysis and Equilibrium Pricing of Limitless Supply Products 163 Influence of Derivative Yield on the Price of Limitless Supply Products 165 Economic Analysis of the Bundling of Limitless and Limited Supply Products 167 Index 170 "Scarcity hypothesis is the cornerstone of traditional economic theory. However, in the digital era, new products such as Windows, Android, and WeChat have been introduced to the market. Traditional economic theory may not be able to explain various new economic phenomena in the digital era. This book creatively proposes the concept of limitless supply and then discusses its implications for economy at both macro and micro-levels. It analyses and summarizes the basic features of limitless supply products, and compares the differences and similarities of how limited supply and limitless supply products are manufactured and marketed. The book also provides reasons for why manufacturers of limitless supply products create intangible assets. It argues that the scale of an enterprise producing limitless supply products depends on the number of users, whereas the scale of an enterprise producing limited supply products depends on the production capacity. This book is mainly written to construct a preliminary, simple, yet relatively comprehensive economic theory framework for limitless supply, and to interpret the phenomena and corporate behaviour. It further explores how enterprises providing limitless supply products grow financially. It also proposes the fundamental difference in growth models between enterprises providing limitless supply products and those providing limited supply products. The book also looks at how growth models can achieve fission growth."-- From publisher's website "Scarcity hypothesis is the cornerstone of traditional economic theory. However, in the digital era, new products such as Windows, Android, and Wechat have been introduced to the market. Traditional economic theory may not be able to explain various new economic phenomena in the digital era. This book creatively proposes the concept of limitless supply and then discusses its implications for economy at both macro and micro-levels. It analyses and summarizes the basic features of limitless supply products, and compares the differences and similarities of how limited supply and limitless supply products are manufactured and marketed. The book also provides reasons for why manufacturers of limitless supply products create intangible assets. It argues that the scale of an enterprise producing limitless supply products depends on the number of users, whereas the scale of an enterprise producing limited supply products depends on the production capacity. This book is mainly written to construct a preliminary, simple, yet relatively comprehensive economic theory framework for limitless supply, and to interpret the phenomena and corporate behaviour. It further explores how enterprises providing limitless supply products grow financially. It also proposes the fundamental difference in growth models between enterprises providing limitless supply products and those providing limited supply products. The book also looks at how growth models can achieve fission growth"-- Provided by publisher