CHAPTER 1

Information And Society and

Information Economy
 Topics

• Overview of Information and Society

• Data vs. Information
• Definition of Information Society

• The Historical Background of Information Society

(Reading Assignments)
• Characteristics of Information Society
• Origins and causes of Information Society
• Key Sectors of Information Society
• Definition of Information Economy
• Major Characteristics of the New Economy
 Data

What is Data?
 Raw facts or figures.
 Data is the product of symbols or representations of
an event or facts about the world, like number, letter,
pictures, lines graphs, etc. .
 Data represents facts or figures obtained from
experiments, surveys, or observations used as
basis for making calculations or drawing
conclusions .
 In and of itself, data has no meaning.
 Data
 E.g. If I count the number of students attending this
class, that's data.
 It has no meaning until it is placed in a context.
 It is like an event out of context, without a meaningful
relation to other things.
 It doesn't have a meaning of itself and simply it exists
and has no significance beyond its existence.
 Data
 If we are given a certain data, we can associate it to
different things and give it different meanings.
 E.g. If we take number "5", it can be associated with
different Meaning
– Cardinal number has one meaning, and
– A number greater than 4 and less than 6 with
another meaning
– Age
– Distance
 Therefore
 Data without a context has no meaning .
 Information
• Information is data that has been processed and
organized.
• It is the result of gathering, processing, manipulating and
organizing data in a way that adds to the knowledge of the
receiver.
 Example
 Let's say I want to buy a car. I can collect a lot of data about
makes of cars, performance ratings, prices and so on. Once I
do that, I have a lot of information about cars and the car
market. Unless we think of this collection of data and
put it in context (car/car market), it has no meaning.
 Take a telephone book, it is developed by bringing different
data together (Name, Address and Telephone number )
 Information
 Information is data that has been given a meaning by
way of relational connection.
– This relational connection converts data in to
information.
 Information is data with context. Therefore, information is
context dependent.
• Example: consider the following data
– 15 and
– Raining
 The temperature dropped to 15 degrees and then it
started raining.
 It is the cause and effect relationship between the
two that provides information.
 Information
 Therefore,
 Information = Data sets + understanding of
relationship among data sets
 What we perceive or understand is the relationship
between pieces of data, or between pieces of data and
other information.
 Knowledge
• An organized and processed information to convey
understanding, learning, expertise…. is called
knowledge.
• Information becomes knowledge when one is able to
understand the patterns that exist within information
and their implication.
• For Example
• I put Birr 100 in my saving account and the bank pays
5% per annum, at the end of one year. Interest = Birr
5 and principal = 105 .
• Understanding this pattern represents knowledge
and it enables to understand the results it will
produce.
 Knowledge
 Therefore
– knowledge= Information + understanding
of the pattern.
– understanding and awareness that arises when information
is interpreted, processed, and connected in a meaningful
way. It involves the ability to apply information to solve
problems or make decisions.
 Knowledge
Types of knowledge
– There are two types of knowledge

1. Explicit

2. Tacit
 Knowledge
• Explicit (already documented), and tacit (embedded in the human
mind)
• Up to 95% of information is preserved as tacit knowledge (study)

• Explicit knowledge is knowledge codified & digitized in books,

documents, reports, memos, etc.
– Explicit knowledge is knowledge that is transmittable in formal
language.
– It consists of knowledge that can easily be communicated to
other people.
– It can be shared in the form of data, specifications, books,
manuals, drawings, audio or videotapes, computer programs,
etc.
 Knowledge
• Tacit knowledge is knowledge available in the mind that comes from
years of experience in research, problem solving, decision making, etc.
–Tacit knowledge is more difficult to express & transmit than codified
knowledge and has a personal quality, which makes it hard to
formalize and communicate.
• Insights, intuitions, and hunches/feeling, that are not verbalized
or documented.
• Difficult to express and formalize, and therefore difficult to share
• Likely to be personal and based on individual experiences and
activities
 Definition of Information
Society
 An information society is a society where the creation,
distribution, use, integration and manipulation
of information is a noteworthy economic, political and cultural
activity.

 In common usage, an information society can be simply

understood as a society where the usage and knowledge of
information and computer technology is at a high level.

 An information society is a society where electronic

information technology mainly facilitates the production,
distribution, and consumption of goods and services.
 ….Cont

 "Information society: A society characterized by a high level of

information intensity in the everyday life of most citizens, in
most organizations and workplaces; by the use of common or
compatible technology for a wide range of personal, social,
educational and business activities, and by the ability to
transmit, receive, and exchange digital data rapidly between
places irrespective of distance.“

 a more modern way to view an information society is simply by

understanding it as technology allowing humans to interact
with each other and share information and
content regardless of time or space constraints.
 ….Cont

 An example of the information society can be seen in the widespread

use of smartphones and mobile applications.

 As a result of smartphones, people can access various kinds of data

on-the-fly that could previously only be accessed through browsing
designated pages on a computer.

 This integration of IT into social and business practices of a society

creates new opportunities for consumption, distribution, and
sharing (such as the rise of e-commerce) while accelerating modes
and channels of communication between people spanning
geographical locations, thus accelerating technological globalization.
 Characteristics of Information
Society
Ubiquitous/universal Access To Information
• In an information society, individuals have access to a
vast amount of knowledge and data at their fingertips
through various means, such as internet-connected mobile
devices, widespread internet access, and online databases
or repositories.
Digital Communication
• Communication channels in an information society are
primarily digitally based, such as email, video calling,
social media applications, instant messaging platforms,
etc.
• These enable the faster and more efficient
transmission of ideas, collaboration among masses,
especially on startups/entrepreneurship initiatives, and
cutting traveling overhead for meetings
 Characteristics of Information
Society
Knowledge-Based Economy

• The exchange of information serves as the foundation

for generating economic growth in this type of society
Businesses shift from traditional business methods, like
physical retail outlets, to employing high-tech solutions
such as AI-powered chatbots, e-commerce
ecosystems, and blockchain payments to improve
customer experience.
 Characteristics of Information
Society
Technological Innovation

• In information societies, technological innovation takes

center stage, with ideas constantly being shared As a
result, new concepts usually sprout out, leading to
disruptive technologies and massive digital automation
reforms across different sectors, from healthcare, supply
chains, manufacturing, and digital banking, among
others.

• Innovative digitization also drives smart city initiatives,

including high energy savings techniques and mass
 Characteristics of Information
Society
Global Interconnectedness
• Through social media, which forms the backbone behind the
world wide web, there is a great level of interconnectivity among
people all over the globe.
• With online conferencing enabled by tools such as ‘Zoom,’
people can collaborate despite being apart geographically by
thousands of miles.
• The rise of sharing economy platforms, such as Reedsy,
Upwork, and Fiverr, freelace Ethiopia, has created opportunities
for remote freelancing, crowdsourcing, and outsourcing.
• This means it’s now possible to conduct business or education
without being in the same physical location as your partners
 Benefits of An Information
Society
• Access to Information: Living in an era where information is easily
accessible is truly remarkable.

• Improved Communication: The power of cyberspace and social

networking sites has enormously impacted our capacity to interact with
individuals from across the globe, regardless of their location.

• Economic Growth: Technology advancements have led to new industries

and job opportunities that did not exist before, such as digital marketing
and e-commerce.

• Increased Efficiency: Automation through tech improvements has

increased productivity in various fields, such as manufacturing or
healthcare

• Enhanced Education: In information societies, online courses are

accessible from anywhere worldwide
 Benefits of An Information
Society
• Better Health Care:
Telemedicine or health apps let
patients receive guidance
professionally from certified
medical practitioners when they
need it most.

• Better Participatory
Democracy: Giving citizens
access to information makes it
easier for them to make informed
decisions, especially during
elections. This helps create a more
balanced and fair representation
of interests in the political
 Origins and causes of Information
Society
• The concept of the Information Society emerged as a result of the
widespread adoption and integration of (ICTs) into various aspects of
human life, economy, and society. The origins and causes of the
Information Society can be traced to several interconnected factors:
Technological Advancements:
• Development of computers (HW and SW), Creation and expansion of the
Internet transformed the way information is accessed, shared, and
communicated globally.
Communication Technologies:
• telecommunications, including the development of mobile phones and
high-speed data transmission, facilitated real-time communication
Globalization:
• The increasing globalization of trade and economies necessitated
efficient and rapid information exchange, blurred geographical
boundaries, allowing for the exchange of information and ideas across
cultures and societies.
 Origins and causes of Information
Society
Social Changes:
• Increasing emphasis on education and awareness in societies led to a
growing demand for information.
• Shift towards more information-intensive lifestyles, where people rely on
digital technologies for work, entertainment, and social interactions.
Government Policies:
• Governments and private sectors invested in building information and
communication technology infrastructure,
• Policies promoting the adoption of ICTs and fostering a conducive
environment for technology innovation
Technological Innovation:
• Ongoing innovation in information technology, driven by research and
development, entrepreneurship, and competition, continuously shapes the
evolution of the Information Society.
 Information Economy
• The term "Information Economy" refers to an economic system
where the production, distribution, and use of information and
knowledge play a central role in the creation of wealth and
economic growth.
• In an information economy, the focus shifts from traditional goods
and services to the creation, manipulation, and exchange of
information as a primary driver of economic activities.
• The information economy is “an economy in which knowledge,
information, and services are more valuable than manufacturing”
(Cambridge Dictionary, 2022).
• The Information Economy is a modern paradigm where data is the
currency that powers innovation and growth. In this landscape,
knowledge is a key asset, driving economic activity through the
exchange and analysis of information.
 Information Economy

• An information economy is a global economy based on combined data

from products, prices, and customers throughout the world.

• This combined information makes it possible for consumers to see and

purchase products in the global market.

• In an information economy, consumers have access to information about

inventory and prices for products from multiple vendors.

• Over the last few decades, advances in technology have made it possible
for the quick exchange of information to influence the price of energy, food,
and raw materials.
 Major Characteristics of the New
Economy
Emphasis on Information and Knowledge:

• Information is treated as a valuable resource and a factor of production.

• Knowledge-based activities, such as research, development, and

innovation, become crucial for economic success.

Role of Technology:

• Advanced ICT are essential for the processing, storage, and dissemination
of information.

High Reliance on Intellectual Capital:

• Intellectual property, including patents, copyrights, and trademarks, gains

significance as a form of capital.
 Major Characteristics of the
New Economy
• Shift in Employment Patterns:

• There is a transition from traditional manufacturing jobs to roles that

require specialized knowledge and skills in information-related fields.

• Knowledge workers, such as software developers, data analysts, and

information technology specialists, become essential to the economy.

• Importance of Data:

• Data is a critical asset, and the ability to collect, analyze, and leverage data
becomes a strategic advantage.

• Big data analytics and data-driven decision-making play a significant role in

various sectors.
 . . . Characteristics
Transformation of Business Models:

• Traditional business models may evolve or be replaced by models that

leverage digital platforms, online services, and information-based products.

Emergence of New Industries:

• New industries related to information and communication, such as e-

commerce, digital media, and online services, become major contributors to
economic output.

Policy and Regulatory Considerations:

• Governments and policymakers need to adapt regulations to address the

unique challenges and opportunities presented by the information economy.

• Policies related to intellectual property rights, cybersecurity, and privacy

become crucial in shaping the information economy.
• -------The End of Chapter One-----