All economic transactions done on the internet is called Digital Economy also known as Web Economy / Internet Economy, it mainly focuses on digital technologies based on digital and computing technologies. With the process of globalization and the growing technology, the trading economy and the digital economy are merging to one. Let us know more about the Digital Economy and the pros and Cons of the Digital Economy.
What is Digital Economy?
Digital Economy is the economy that focuses on digital technology i.e. completely based on computing and digital technologies. All activities such as business, economic, social, cultural, etc. which are supported by web and other digital communication technologies are all covered under Digital Economy. Activities like a business, economic, social, cultural, etc. that support by web and other digital communication technologies are essentially covered in the digital economy.
The book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence” written by Don Tapscott in 1995 was where the term was first talked about. The main components of the digital economy are E-Business, E-Business Infrastructure, and E-Commerce.
The influence of growing digital platforms has a great influence on our life in the past 15 years. Social Media plays a big role in influencing consumers such as Facebook, Twitter, Instagram, etc. even websites like youtube play a big role here. Every aspect of the user’s life is integrated by this now for example on education, entertainment, banking, and healthcare, etc.
Merits of Digital Economy
Many start-up ideas and new trends have been influenced by the Digital Economy. Same of the biggest companies of today’s time are from digital economies such as Apple, Google, Amazon, Microsoft, etc. Let’s look at some of the Merits of Digital Economy.
- Digital Economy Promotes Use of the Internet:In today’s age, most of the daily work depends on the internet now. The growth of technology and the internet is worldwide now which began in the USA. Software, hardware, technology research, services, and digital communication are an example of some things which has a raised in investment. The economy has ensured that the web-based business stays and also the internet works forever.
- Rise in E-Commerce: The world has adapted and adopted the internet and also embraced online business so well in the last decade is appreciable. The E-Commerce sector has got a great push due to the digital economy. Apart from selling even the digital economy has made buying, selling, marketing and distribution much easy for us.
- Digital Goods & Services:Movies, Music, Videos, etc are available so easily today that there is no need for DVDs. CD’s or records. All these are available digitally for us. There is no need for various products for various things, all are available easily and digitally on a single product. There is no need to visit banks or insurance offices personally, maximum work can be done digitally from home or work. There are so many services and goods which have been completely digitalized and made life much easy.
- Transparency:Digital economy is playing a big role in the reduction of black money and corruption as most of the transactions and their payments happen online which has made cash transactions rare. A push for the online transaction was made during demonetization to promote the web economy.
Demerits of Digital Economy
- Loss of Employment: The dependence of human resources decreases as the dependence on technology increases. Loss of many jobs can occur due to the advancement of the digital economy. The requirement of human resources decreases as the automated process increases. Online banking is an example of the same.
- Lack of Experts:The process and technologies of the Digital economy are complexed. Trained professionals and experts are required to build a platform and the keep up of the same. The availability of the same is not readily available, especially in rural and semi-rural areas.
- Heavy Investment: Infrastructure, high functioning internet, strong mobile networks, and telecommunications are some basic requirements for Digital Economy. All this is time-consuming including heavy investment. The development of infrastructure and network is very slow and costly for the developing country like ours.