Digital economy

Digital economy

The digital economy refers to economic activity that uses electronic communications and modern digital technologies to provide many goods and services. The Internet, big data, financial technology, and other new digital technologies are used to collect, store, analyze, and share information digitally and to transform social interactions. It also includes activities supported by the web and communication technologies. Other digital activities, which include commercial, economic, social, cultural and other activities.

 What is the digital economy?

The world as we know it is constantly changing, and one of the key drivers is digital transformation. At its core, digital transformation is about using the latest technologies to do what you already do, but better.

Digitization of the economy creates benefits and efficiencies As digital technologies drive innovation and fuel employment and economic growth, the digital economy also permeates all aspects of society, influencing the way people interact and creating widespread social changes.

This economy has received a lot of attention, with increasingly powerful news headlines offering startlingly dramatic scenarios about it.

Some warn of job losses due to automation, some wonder what digital technology can do, and then there is real doubt about whether this will translate into serving the people who need it most.

What makes Digital economy Different and special?

• With all this discussion, there is rarely an explanation of what the digital economy actually is, what makes it different from the traditional economy? Why should we care about it?
• In fact, it is a term that captures the impact of digital technology on patterns of production and consumption, including how goods and services are marketed, traded, and paid for.
• The term has evolved from the 1990s, when the focus was on the impact of the Internet on the economy, and this has extended to include the emergence of new types of digitally oriented companies and the production of new technologies.
• Today the term encompasses a dizzying array of technologies and their applications, including artificial intelligence, the Internet, augmented and virtual reality, and robotics.
• It is now known that this economy includes all parts of the economy that exploit technological change that transforms markets, business models, and daily operations.
• So it covers everything from traditional technology, media and telecommunications sectors to new digital ones.
• These include e-commerce, digital banking, and even “traditional” sectors such as agriculture, mining or manufacturing that are affected by the application of emerging technologies.
• Understanding these dynamics is now non-negotiable. This economy will, soon, become the mainstream economy as the uptake – and application – of digital technologies grows in every sector of the world.

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digital core

• At the heart of the digital economy is a “digital core.”
• This includes providers of physical technologies such as semiconductors and processors, the devices that enable them such as computers and smartphones, the software and algorithms that run on them, and the enabling infrastructure used by these devices such as the Internet and communications networks.
• This is followed by “digital service providers.”
• These are parties that use these technologies to deliver digital products and services such as mobile payments, e-commerce platforms, or machine learning solutions.
• Finally, there are digital applications, this includes organizations that use the products and services of digital service providers to change the way they do business.
• Examples include virtual banks, digital media, and e-government services.

Digital vs. traditional

So what makes the digital economy different from the traditional economy?

• First, digital technologies allow companies to do business differently as well as more efficiently and cost-effectively.
• It also opens up a host of new possibilities.
• No team of people will ever be able to provide real-time traffic-aware navigation the way smartphone apps do.
• This means that products and services can be offered to more consumers, especially those who could not be served before.
• Second, these effects give rise to entirely new market structures that remove, among other things, the transaction costs of traditional markets, the best example of which is the emergence of digital platforms such as Amazon and Uber.
• These companies connect market participants together in a virtual world. They uncover optimal prices and generate trust among strangers in new ways.
• Finally, the digital economy feeds and generates huge amounts of data. Traditionally when we made purchases in a physical store using cash, no one kept an account of our personal consumption or financial transactions on a large scale.
• Now, ordering online and paying electronically means that many of our consumer and financial transactions generate electronic data that is recorded and retained by someone.
• Collecting and analyzing this data offers tremendous opportunities to transform how a range of economic activities are carried out.
• However, the boundaries between digital and traditional are blurring As technological change permeates every aspect of modern life, we all need to understand the nature of this change to be able to respond at every level: societal, corporate and personal.
• The South Africa in the Digital Age initiative was convened by Genesis Analytics In partnership with the Gordon Institute of Business Science and the University of Oxford's Pathways to Prosperity Commission, a multi-stakeholder initiative, it has developed a future digital economy strategy for the country.

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Advantages of the digital economy

• Greater Information The Internet has allowed consumers to have more information and choice.
• For example, it makes it easier to compare prices between businesses, and it also brings information to a person's fingertips.
• This is especially important for tourists going on holiday, before this economy, it may not be possible to find hotel prices and bus timetables.
• Saves time, before, if you needed office supplies, you would have to make a trip to town and buy them, now, you can place an order online and it will arrive the next day, this saves business labor costs.
• Lower costs.
• Countries with companies acting as platform developers and managers of digital technologies are those most likely to reap the benefits that arise from the digital economy – better prospects in terms of long-term growth, job and wealth creation, and lasting positive impacts on productivity and competitiveness.
• With the rise of this economy, e-commerce has also gained importance and increasingly the market, every task related to purchasing, distribution, marketing, creating and selling is now just a click away.
• Nowadays, goods are available to us digitally, we don't need to go to the market and buy goods, even services are also now available online.
• All transactions are done online, which has given our economy more transparency.

 

 Conclusion:

At the end of our talk about the digital economy, the digital age is changing everything: the nature of markets and products, how to produce, how to deliver and pay, the size of capital to operate globally, and the requirements for human capital. It also enhances productivity and exposes companies to new ideas, technologies, and models. new management and business, creates new channels to access markets, and all this at relatively low costs. It is not an exaggeration to predict that companies will increasingly rely on artificial intelligence for basic procedures and more complex tasks.