The impact of economics in the digital era

@Alejandra Acedo

There is a new reality in economics. The digital era, new technologies, and data have reshaped the way economics impacts our governments, corporations, society, and daily lives.

There is a new reality in economics. The digital era, new technologies, and data have reshaped the way economics impacts our governments, corporations, society, and daily lives.

Studying economics from a holistic perspective—including econometrics, political science, applied analytics, behavioral science, and technology—is a unique way to become an important player in the field, influencing transformation, efficiency, and growth in both the public and private sectors.

Through a comprehensive study program, Bachelor in Economics students at IE University gain the knowledge and skills in technology, human behavior, and the dynamics of global economics, to be able to work in any area of economics. From country, sector, and policy analysis, to economic and financial analysis for business, and anywhere in between, this program prepares next-generation economists.

But the important mix of practice and theory is where this program truly stands out. Economist and professor Javier Capape, who also serves as the Director of Sovereign Wealth Research at the IE Center for the Governance of Change, explains just how far-reaching the impact of economics is, and how IE University prepares students to make an impact.

Why study economics today?

Professor Capape explains, “If you’re interested in development, you need to study economics. If you’re interested in why governments do what they do, you need to study economics. And if you want to know what the CEOs of big corporations are thinking, you need to study economics.”

Both heightened government intervention and advancements in technology have changed the way businesses work and countries interact, making economics an increasingly important field of study.

I think today, economics are relevant again because the level of intervention of governments is growing. In order to understand that, you need to know the relevant theory, and how reality teaches us about theory.Capape goes on to explain that looking at economic theory and reality together help us understand how truly complex our reality is, allowing us to make better decisions, policies, and effect positive change.

A practical approach to economics

IE University focuses on a practical and real-world approach to economics. The sovereign wealth funds project, one of the few of its kind globally, is one of the initiatives that dives into the issues and topics that are shaping our world today. This project conducts research into the effects of increasingly influential sovereign wealth funds, and how they are shaping and being shaped by economics.

The wealth fund industry is around 90 funds today. They are diversified geographically, they are invested in many sectors, and their importance is key because several wealth funds today are leading economic development in many of their own countries.”

Capape goes on to explain that these funds have a significant impact on the economy in a complex context, considering elements like economic development, resource acquisition, and even geopolitical relations.

The sovereign wealth fund project at IE University allows students to get a taste for how economics looks and feels in today’s interconnected world. By conducting research into the most relevant topics, like how the influence of government-owned funds investing in portfolio companies may affect or improve the governance of these companies, students are put at the cutting edge of the sector.

As director of the project, Capape emphasizes that “it’s a good opportunity to join this sort of research as a student because you will be able to make an impact.”

Becoming part of the era of change: tech in economics

According to Professor Capape, “technology is changing economics.” The omnipresence of data is revolutionizing decision-making. “Now data is available for almost everyone, and it’s available in a very easy way to access. So if you think about public budgets, for example, now we can really analyze budgets at a very detailed level.”

The availability of this data allows consumers, citizens, or economists working to influence decisions, to demand more accountability and better policies from governments based on data.

The Bachelor in Economics at IE University merges technology with public policy and economics. Students gain the foundation they need in computing and data science, and an innovative mindset ready to learn and implement new technologies, to most effectively work in and shape economics.

Capape underscores the complexity of the field of economics: “In order to understand how you can get an efficient outcome in all of these layers of change in technologies and new data and new access to new opportunities, I think it makes a lot of sense to study economics today.” He goes on to say that “many of the relationships in terms of geopolitics, trade, development, etc. are framed by economics, and now it’s easier to understand how to get to efficient outcomes if you study economics.”

Studying economics is a way to make real change. Through a deep understanding of the most relevant real-world issues, human behavior, technology, and economic environments, the dynamic, comprehensive Bachelor in Economics at IE University will allow you to make a positive impact through economics.