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ICT Technologies: Internet Economics Discussion Coursework

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Updated: Jun 19th, 2022

Lock-in effects

The Lock-in effect refers to the ability of a business model to prompt customers to engage in repeat transactions, thus creating loyalty. The significance of lock-in effects is that it creates and enhances product value. The lock-in effect is facilitated by the availability of reward systems, unique design, trust and customization.

Several programs are utilized in promoting repeat transactions; for example, many outlets have loyalty schemes where customers collect loyalty points that are redeemable or reward repeat purchases with discounts. Starbuck Coffee Co. has a loyalty program where customers collect ‘stars’ for every purchase made, which are redeemable for various privileges or discounts.

Essentially, users need to trust a web page in order for them to transact, thus security is of the essence for successful internet economics. Consequently, the design of a site influence customers’ choice to have repeat transaction. Amazon.com is a good example of a company that utilizes the lock-in effect fairly well; the site has a database of its frequent customers’ credit card details, hence simplifying the processing of new transactions.

Additionally, the lock-in effect is maintained by creating high switching costs, which are costs that customers have to incur in order to use other products. For instance, the telecommunication industry uses high interconnection fees to discourage customers from making calls across other networks.

Finally, the site should provide personalized and efficient customer support and feedback portal, which assists the marketing team to collect information from customers. Importantly, customers should be able to make payments using common types of payment modes.

Why are some countries poor and others rich?

Primarily, the difference between wealthy and poor countries is in the existing culture; some cultures promote growth whiles others do not. Similarly, some cultures promote hard work and delayed gratification. According to Kellecioglu (2), “poor nations have less economically efficient cultural mentality while rich countries have a more economically efficient cultural mentality.”

In addition, the strength and capacity of institutions affect a countries’ economic development. Citizens in countries with sound institutions free of corruption and other vices individuals are more motivated to work hard than citizens in countries without proper institutions. Essentially, individuals are motivated to work hard if they are assured of the protection of their gains by government institutions. Therefore, the type of leadership pattern or system ultimately influences economic growth or lack of it.

Some researchers attribute the economic difference between nations to slavery and colonialism where poor nations lost their resources to wealthy nations. According to Kellecioglu (10), economic difference between nations has a positive correlation with the predominant race of the citizen. The author concludes that the ethnicities of black morphological traits are generally poorer than white.

Further, the geography and topology of a nation affect its capacity to develop economically. Notably, African terrains inhibit economic growth due to harsh climate. However, countries endowed with natural resources benefit from the commodity, hence stimulating economic growth.

Can poor countries catch up with the richer nations in this era of ICT technologies?

Poor nations have the advantage of developing due to ICT technologies; however, they do not have the capacity of catching up with rich nations. Generally, poor nations rely on the richer nation for ICT technologies. Besides, the educational standards in poor countries inhibit the use of ICT technologies. Similarly, the costs associated with technologies are unattainable by some poor nations; indeed, ICT technologies are rapidly changing, hence very expensive to catch up with the latest technology for less wealthy nations.

As more Asians get on to the web do you think English will still be predominant on the internet in 5 years?

Web-users of Asian descent are approximately 32.6% of all internet users, and the numbers are rising yearly. As more Asians get on to the web, the dominance of the English language on the internet will surge significantly. The Asians constitute a very large proportion of the earth’s population, hence they are likely to influence the language used on the web in the next five years.

Moreover, Asian countries, including China, India and Japan are hubs of innovation and production of ICT technologies, thus there is easier accessibility to the technologies. Indeed, many ICT companies have established production lines in these countries.

Similarly, the education and competency levels of Asian communities have increased significantly thus Asians are able to use ICT technologies effectively. Indeed, there is faster penetration of internet usage in Asian countries than in Africa, thus fewer English-speaking people are gaining access to the internet.

Furthermore, the economy is shifting to the east, creating new middle-class citizens. Therefore, companies are seeking entry into the Asian market. In particular, the Chinese economy is growing rapidly due to the rapid growth of its industry’s export market and huge local consumption. In order to target this new market, companies are developing web pages in the major Asian languages. Consequently, entrepreneurs will be compelled to learn Chinese and other major Asian languages.

Additionally, the Asian countries are significant players in the international export and import trade, thus with the continued growth of e-commerce, the use of Asian languages on the web would steadily increase.


Kellecioglu, Deniz. Real-world economics review, issue no. 52. 2010. Web.

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