Digital Economy
Digital economy is the aggregate word for all economic transactions that take place over the internet. It is also known as the Web or Internet Economy. The digital and conventional economies are combining as a result of technological advancements and globalization processes.
The term “digital economy” refers to an economy that is built on digital and computer technology. It basically includes all corporate, economic, social, and cultural activities that are facilitated by the internet and other digital communication technology.
Don Tapscott’s 1995 book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence” introduced the phrase.
This economy has three primary components: e-business, e-business infrastructure, and e-commerce.
In the previous 15 years, we have seen the exponential expansion of digital platforms and their impact on our lives. Consumers are now impacted by what they see on social media platforms like Facebook, Twitter, and Instagram, as well as other famous websites like YouTube.
So this economy is a means to capitalize on this chance. It is now incorporated into all aspects of a user’s life, including healthcare, education, banking, and leisure.
Advantages of Digital Economy
The digital economy has given birth to several new trends and start-up concepts. Almost all of the world’s largest corporations (Google, Apple, Microsoft, and Amazon) are digital. Let us examine some major benefits of the digital economy.
Encourages use of the Internet
If you think about it, most of your everyday tasks can now be completed on the internet. Technology has advanced dramatically, and the internet, which originated in the United States, has expanded into a global network. As a result, investment in all aspects of hardware, technical research, software, services, digital communication, and so on has increased dramatically. As a result of this economy, the internet and web-based enterprises will be there for a long time.
Rise of E-Commerce
Businesses that adapted to the internet and embraced online commerce during the past decade have thrived. The digital economy has sent the e-commerce industry into overdrive. The digital economy has made it simpler to acquire, distribute, promote, create, and sell in addition to direct selling.
Digital goods and services.
The era of movie DVDs and music CDs or LPs is over. These things are now accessible to us online. There is no longer a demand for physical things. The same is true for financial services such as banking and insurance. There is no need to visit your bank if you can complete all transactions online. In this digital economy, several commodities and services have been fully digitized.
Transparency
Most transactions and payments in the digital economy take place online. Cash transactions have becoming more infrequent. This helps to eliminate illicit money and market corruption while also increasing economic transparency. In reality, during demonetization, the government pushed for online transactions to boost the web economy.
Disadvantages of Digital Economy
loss of employment
We become less reliant on human resources as we rely more on technology. The progress of the digital economy might result in the elimination of many employment. As operations become increasingly automated, the need for human resources decreases. Consider the concept of internet banking itself.
Lack of Experts
The digital economy necessitates complicated procedures and technology. Experts and skilled personnel are required to develop the platforms and maintain them operational. These are not widely accessible, particularly in rural and semi-rural regions.
Heavy investment
A solid infrastructure, a well-functioning Internet, powerful mobile networks, and telecommunications are all required for the digital economy. All of this requires a significant amount of time and money. In a developing nation like ours, infrastructure and network development is a sluggish, laborious, and expensive process.