What is Digital Economy- Detailed Guide & Effects

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What is digital economy? IEconomy is nothing but simply ‘Internet Economy‘. The vast changes economies all around the world have experienced in the 21st century after the coming of the Internet. The digital era has joined all countries together with the latest technologies and fast-growing high tech industries.

WHAT IS NEW IECONOMY?

What is digital economy? New IEconomy is simply the changes countries globally have experienced, due to the rapid economic productivity. A huge number of opportunities have been generated which have especially benefited the third-world or developing economies with the creation of jobs in the industrial sector. This combined with the robotic machinery used in the manufacturing sector profited societies as a whole.

The term first came to be used in the late 1990s after the arrival of the internet and computers in consumer and business marketplaces and could now be used by ordinary people also. What is digital economy? This shift from the manufacturing and material-based economy to an ieconomy working with the use of technology to create products and services was the reason behind the term ‘new economy‘. As work now was done at a speed which was unmatched and had never been experienced before. Everything was made much easier than before.

UNDERSTANDING THE NEW ECONOMY

The New Economy in the early 2000s was also referred to as the ‘knowledge economy’, ‘data economy’, and ‘e-commerce economy’ is what is digital economy. Many Industries were established at the time with the dream of becoming big and successful instantly but unfortunately, nothing like that happened. Investors and financial institutions bid up the stock prices very high without backup and failed miserably. Many small businesses with good potential and ideas were destroyed in this process. However, those who survived, like Google, Amazon, and Facebook have now become the biggest tech giants, overtaking most of the companies in terms of market.

In recent years, the meaning of new economy has also been changing and is often used to address the different aspects of the technological sector, including the sharing economy, the streaming economy, the gig economy, cloud computing, big data, and artificial intelligence, rather than only using it for internet and computers. It was also used as a lingo by tech companies to describe the ‘new ways’ of doing business and earning money. And the promises of a better life that came with it. At first, technology was only used at workplaces but slowly they entered homes, and their impact kept on increasing, that now there is no home without multiple electronic gadgets.

In recent times ‘New Economy’ has also been used to express the Capitalist economy and its social goals. What is digital economy is the Internet economy covers businesses managed and controlled through markets whose infrastructure is based on the internet and Worldwide Web (WWW). The use of digital networking has made activities very fast and cheap. Various social media platforms have connected us to people around the planet, creating what Philosopher and Communication theorist Marshall McLuhan called the “Global Village”. The largest profits, as a result, are also made by industries that deal in the online market.

We have been a witness to the drastic increase in consumer empowerment which came with the power of ‘choosing’ what we like and what we dislike. Innovations keep on making our lives easier as numerous goods and services are catering to the different needs and choices of different people. We can compare among countless products of the same kind and get them easily. Importing and exporting has also become a big business and is carried out around the world comfortably. We are not only the users of technology but also the creators and active interactors.

The Internet has fast penetrated all forms of social domains and government areas. E-governance, for example, has become a primary tool for interacting with citizens and for the functioning of the government. Important sectors like Healthcare, Education, and Environment also make the most of the easily available technology for fast growth. Not only this, but it has also helped countries come closer to each other and use global platforms like UNICEF and WHO to fight social problems together. Digital economy was first coined in the book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence” by author Don Tapscott in 1995.

There are three main components of the Digital ieconomy:

  1. E-business
  2. E-business infrastructure
  3. E-commerce

MERITS OF NEW/DIGITAL ECONOMY

1) Encourages the use of the internet:

If we think about going on with our lives without the use of the internet it will be nearly impossible. What is digital economy or ieconomy? Every work revolves around using computer technology in our busy schedules which require multitasking and it can be made possible only through the internet. The web platform is here to stay and has shaped our lives in such a way that it is nearly impractical to work without it.

2) E-Commerce has increased:

We have read numerous examples in the above paragraphs, of how businesses who accepted and adopted the online platform have succeeded so much more than those who didn’t in the initial days. In today’s time, no business would say otherwise. Buying, distribution, marketing, selling, and creating are all made much easier because of the digital economy.

3) Digital services everywhere:

You no longer need to go to a theatre to watch a movie, or go to a library to access research material and books, or stand in a long queue to carry out a transaction, insurance, pay bills, book tickets, and so on. Now everything is just one click away from us. You can buy anything from any part of the world with the electronic gadgets you use.

4) More Clarity:

Since all the payments and transactions are carried online, the risk of black money and gambling of money is reduced to a certain extent.

DEMERITS OF NEW/ DIGITAL ECONOMY

Though there are several advantages of the new economy, however, nothing can be 100% correct. There are some flaws of the digital economy or the ieconomy as well, which should be taken into account.

1) Loss in Jobs:

While the new ieconomy has created a lot of jobs, it has also taken some. Since now, there is more dependence on technology and less on human resources, work is getting automated and requires lesser human resources. Thus, has taken away the employment of people in those sectors. An example could be, fewer employers required in the bank as online banking is preferred by most people.

2) Rural Areas are still behind:

Though we may have modernized metropolitan cities, many small towns and rural areas are still behind and need to catch up quickly for the economy as a whole to prosper more. Fewer experts and trained professionals in these areas is a problem.

3) Requirement of Heavy Investment:

Internet economies call for very strong infrastructure, strong mobile networks, high functioning internet, and good telecommunication. Entertaining all these needs is time-consuming and needs heavy investment. In developing nations, this may be a slow and costly process in comparison to the countries in the west. With this being said, it is also important to note that The ieconomy has brought a lot of positive changes and made lives easier and therefore, what is digital economy is the technological advancements and the invention of computers and the internet will always remain a blessing to mankind. This was all about What is Digital Economy- Detailed Guide & Effects

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