Abstract

Digitalization, network effects, and artificial intelligence are transforming how economic value is created and distributed in modern economies. This paper examines the increasing influence of networks relative to traditional market mechanisms and explores the continuing economic importance of human connections in an AI-driven economy. It first analyzes how network effects are amplified by digital platforms, then explains how such effects can strengthen connectivity, enhance intangible value, reduce information asymmetry, and reshape competitive structures by creating barriers to entry. The paper also examines the economic impacts of AI, particularly its ability to increase productivity and transform labour markets, while highlighting risks such as labour displacement, income inequality, and reduced autonomy in decision-making. Against this background, the paper argues that human capabilities may become relatively more valuable in areas involving trust, intercultural understanding, and tacit knowledge, which can reduce transaction costs and mitigate misunderstandings in economic interactions. The discussion of Klarna further illustrates how AI and human labour can operate through comparative advantage rather than simple substitution. Overall, while markets remain fundamental to economic coordination, networks are increasingly shaping how value is created; and as AI takes over routine and information-processing tasks, human connections may become relatively more economically valuable through trust, cultural understanding, and tacit knowledge.

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