SPEECH DATE:  26/03/2019  SPEAKER:  Deputy Governor Cecilia Skingsley  VENUE:  Entreprenörskapsforum, Stockholm  CLASS:  SVERIGES RIKSBANK SE-103 37 Stockholm (Brunkebergstorg 11) Tel +46 8 787 00 00 Fax +46 8 21 05 31 registratorn@riksbank.se www.riksbank.se  The effects of digitalisation on the economy* Thank you for the invitation to come here and speak at Entreprenörskapsforum. I cannot imagine a better place to talk about digitalisation and its potential effects on the economy. One example of technological advances and the effects of digitalisation is right here – in our mobile phones. Four out of five Swedes in the age range 16-85 had access to the internet via a mobile phone in 2018.1 It is difficult to imagine, but today's smart phones actually have greater processing power than the computers that enabled the Apollo moon landing in 1969!2 Smart phones also give us access to inconceivable amounts of information and entertainment that did not even exist in 1969. The answer to a question is only a few clicks away. As a consumer it is easy to see the value of these technological advances, although we do not in our daily lives use the capacity for anything comparable to the giant leap for mankind the moon landing entailed… The new technology provides us with entertainment, but not only that. It also affects our working lives and the economy in general.
Of course, size and influence need not necessarily be negative from a competition perspective. The problems arise when new companies experience difficulty starting up their operations and are forced to deal with various entry barriers to be able to “challenge”14 the established players on the market in question. Both economies of scale and network effects can function as entry barriers, however. Starting up a new Facebook would be difficult and require major investments, but it is not impossible.15 A further problem that can arise from digitalisation is that companies can use the different price comparison sites to observe one another’s pricing. One often claims that these platforms are really good for consumers trying to find the lowest prices, but they also make it easier for companies to monitor one another’s prices and coordinate their prices with one another.16 This can be a problem from the point of view of competition. Challenges can be tackled The short-term challenges I have described should not be underestimated. They are real problems that affect real people. And problems experienced now are not helped by knowing that humanity will benefit in the long run. But what is the best  13  Stefan Fölster replicated a study by Frey and Osborne (2013) using Swedish data and found that more than 50 per cent of all jobs could be replaced by digital and automated technology in the coming 20 years.