Significance of Digital Economy, Its Promises and Dangers: Critical Essay

Significance of Digital Economy, Its Promises and Dangers: Critical Essay

The digital economy in world creates efficiency and is beneficial to connect the whole world within a single framework. It is also termed a new economy. The digital economy was first coined by a Japanese professor at the end of 1990. The digital economy is termed because digital technologies help the economy by providing several inclusive opportunities. The broad scope of the digital economy includes sustainable growth for economics and it provides several facilities like e-commerce platforms, industry procurement, implementation of new software, and digital services and enhances excellent international cooperation among countries.

The digital economy is a term that emphasizes using digital technologies, which are generally based on computing technologies. It is essential for covering all types of business, industries, and economic and social aspects of an economy. Support from the Web and digital technologies accelerates the pace of the interconnection of global networks. Various countries define the digital economy in different terms. Australian economy termed it as a global network, whereas defines it as a connection that ensures electronic transactions are easy. OECD countries termed it the web economy, and it states that the digital economy assures efficient trading of goods and services.

This work aims to understand the significance of the digital economy as well as its promises and perils.

Promises of the Digital Economy

Firstly, the digital economy has helped to simplify payment and make transactions easy. It has made cash transactions rare and has reduced the complexity of cash counting and carrying safely. It also reduces the amount of black money and enhances anti-corruption policies. It ensures a transparent economy, acts as a powerful catalyst to simplify huge business transactions, and ensures 90% of more market capitalization. Most developed countries are willing to adopt the digital economy. From the period of 2005 to 2019, it has experienced an increase in adoption in the digital economy all over the world. Through a digital approach, it reduces the cost of sending and receiving money. It also increases the safekeeping of money and fast speed for money transfer. It has been reported 53% of the users believe in digital assistance and money security (Avazov and Maxmudov, 2021). An increase in cryptocurrency regulation and financial literacy has been encouraged through the digital economy.

But the most promising feature of the digital economy is that it can be applied in every industry. It directly connects to developing computer technologies and enhances the digital revolution. Internet banking, electronic payments, e-commerce, rise in business outsourcing are the promising sides of the digital economy. It can be applied in every field of life, whether in sports or aviation, telecommunication, or other manufacturing industries. Smart cities are created, and it has been noticed that the implementation of smart cities raises the sphere of information security by 36% (Avazov, 2021).