Virtual Economies

Dr. Vili Lehdonvirta & Dr. Mirko Ernkvist have written a very interesting report on virtual economies under the sponsorship of the World Bank and the IFC entitled Knowledge Map of the Virtual Economy: Converting the Virtual Economy into Development Potential. To get a small taste, here is the final paragraph of the executive summary:

Besides microwork, development interventions could help promote the development of new digital networks and services that have potential to provide jobs in the virtual economy in the future. In the same way that access to high speed Internet backbone connections helped India develop its business process outsourcing (BPO) industry in the 2000s, so the development of mobile broadband networks (so-called 3G and 4G networks) could assist a wider range of developing countries to create jobs and generate wealth from the new opportunities that the virtual economy brings.

This is naturally just a small taste. The authors identify “two major areas of the existing virtual economy”

1) thirdparty gaming services and

2) microwork.

But still:

This report will focus largely on these two distinct but conceptually related areas. Gaming services is an established industry that provides a rich set of evidence for analysis, while microwork is an emerging industry with apparently significant development potential. Other existing activities within the virtual economy are categorized as 3) marketing related paid-for connections in social media (“cherry blossoming”), and 4) user-created virtual goods in virtual environments.

This report is definitely interesting reading and an important development on the early work of Edward Castronova.

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