Digital Economy PDF

Digital Economy  A digital economy refers to the transformation of everyday economic activities, thus becoming digitalized and increasingly dependent on the internet.  Online systems and establishments replace traditional brick-and- mortar structures.  Information and communica...

Digital Economy  A digital economy refers to the transformation of everyday economic activities, thus becoming digitalized and increasingly dependent on the internet.  Online systems and establishments replace traditional brick-and- mortar structures.  Information and communication technology is the backbone of a digitalized economy.  And the internet, fueled by hyperconnectivity, is its most important part.  The digital economy doesn’t simply imply commercial transactions or business.  In digital economy, widespread digital transformations takeover many areas.  It changes the job market scenario, governance, manufacturing industries, and services like education, health, etc.  Characteristics of Digital Economy  Personalization –This is the era of personalized experiences and needs for each individual. It enhances the user experience by increasing navigability and accessibility.  Connectivity – The Internet and other communication systems scale up the connectivity factor. But not just communication; the internet also connects different players like people, businesses, and governments.  Mobility – Mobility refers to the fluidity of operating using a digital device. It can be carried anywhere, operated from anywhere, provided data is available. Additionally, mobility makes the digital economy flexible and highly responsive.  Free content – This feature of the digital economy is what allows access to almost every content online. Nothing comes for free, but it is all an exchange, such as advertisements for free published content.  Network effect – The ability to ‘share’ is one of the digital economy’s most significant features. People can share anything online – from their favorite videos to their shopping cart to a location to important news.  Ubiquity – The digital economy extends to every corner where data is present. A person in the Dang jungles can view an article published or a video released from Nirma University. Thus, the internet allows one to cross borders at a low cost.  Components  Electronic devices – These are the underlying basis for applying newer digital innovations. For example, adding the internet to mobile phones and TV, artificial intelligence (AI) to vehicles, and the internet of things (IoT) to watches make them smart.  Internet – Though a disruptive technology once, the internet has further paved the way for many other innovations. Cloud computing, video conferencing, etc., are a few examples.  E-commerce – E-commerce is one of the major activities that take place online. There are so many online businesses – big and small, and so many choices. Nowadays, anything can be bought and sold in any part of the world.  Social media – Like e-commerce, social media is a major constituent of the digital economy. It is used mainly as a communication media and as an auxiliary for e-commerce.  Artificial intelligence (AI) – Currently, AI is bringing about major transformations, most of which are unimaginable, even as they are happening. Some examples are the auto-pilot car and smartwatch that can calculate the calories burnt, pulse and heartbeat, etc.  Cloud computing – Cloud computing allows for the online storage of data, like documents, passwords, payment information, etc. It eradicates the need for physical storage devices like USBs, CDs, etc. It also brings billions of dollars to firms offering cloud storage services. However, cloud computing has some environmental and security concerns.  Impact  The impact of the digital economy can be seen everywhere. An average human being’s day seldom moves without technology and the internet. Many traditional systems have become digitalized. Everyone has mobile phones that have all-around features that work with the help of the internet. Televisions, vehicles, and even homes have become smart.  Digitalisation’s impact can be seen in healthcare (pacemakers, smart watches) and education too.  E-commerce has undeniably made a great leap in recent years. People buy everything from electronic devices to groceries and medicines online. This has been facilitated to a great extent by online payment systems, location services, etc.  Digital governance is an important advancement. For example, citizens can now avail of government services online, which doesn’t just speed up the process but allows online payment, tracking progress, etc. Pros Cons Saves time through faster response and real-time Privacy issues and security concerns. functioning. Cost-effective for customers, as it provides the option The probability of fraudulent activities is high. to work without moving and offers greater choices. High flexibility and accessibility (24×7 operations). Over-indulgence in technology can be harmful. Digital economy Traditional economy Goods and services can be bought online and Goods and services are availed at brick-and-mortar availed at home. stores and institutions. Cashless payment and cryptocurrencies are gaining Currency/ legal tender is the only mode of payment. prominence. Increasing mechanization and automation. Reliant of the human workforce. Physical and virtual assets are equally important. Importance of physical assets. Backed by information and data. Closed communities/ societies. Digital storage options for users. Physical storage options.