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The digital economy is reshaping the world, changing the way we work, do business, and essentially live. The term refers to an economy that makes use of digital technologies for gathering, storing, assessing, and sharing data.
The broader umbrella of the digital economy encompasses all economic activities that depend on or are improved by digital technologies. These include cloud computing, fintech, the internet, and big data, among a few. Economics and technology today are interconnected, with the latter driving economic growth at large.
This article takes a more detailed look at digital economies and technology. We try to understand technology’s impact on policymakers, businesses, and individuals.
Moving ahead on the interdependence of digital economies and technology, let us understand more the role the latter plays in shaping the former. Some of the key innovations that have helped drive digital transformation in the global economy include:
To better understand the role of economics in digital transformation, let us look at the various ways in which technology facilitates several economic activities. Some of the most common ones include e-commerce, digital payments, and virtual services like cryptocurrency, digital wallets, and electronic bank transfers.
It can thus be said that data is the new “oil” in the digital era. It serves as a critical and significant resource in digital economies. Just like oil powered the industrial revolution in the country, data enables businesses to derive valued insights and foster innovation.
The role of economics in digital transformation cannot be overstated. The digital economy today is backed by the support of economic principles, such as the leading role of the private sector in facilitating e-commerce. Likewise, the limited involvement of the government and its recognition of the Internet as a driving force for the digital economy is also noteworthy here.
The supply and demand principle fosters the growth of e-commerce operations across the country. The innovative pricing mechanisms in e-commerce and subscription-based pricing models enable potential customers to pay recurring fees for accessing products or services.
Yet another indicator of technology-driven economic growth is the emergence of the gig economy, where professionals prefer flexible, temporary jobs over permanent roles. This leads to increased flexibility for workers who offer short-term services to businesses, often removing the middleman and directly contacting the employer via various technological means.
As we witness rapid technology-driven economic growth around us, it becomes evident that the future too holds immense potential. Some of the most popular trends that seem likely responsible for driving the growth of the digital economy in the future are:
As we take a closer look at the future of digital economies, it becomes imperative to understand both the challenges and opportunities confronting them. Some of the key challenges that a digital economy would need to overcome are:
Let us now look at the vast opportunities that emerge from the future trends in digital marketplaces:
The interdependence between technology and economics in helping shape digital economies cannot be denied. Both exist, helping and enabling each other to promote the emergence and existence of a thriving economic nation.
To learn more about economics, the various trends in digital marketplaces, and how digital technology plays a significant role in fostering economic growth, pursue an online MA in Economics from Online Manipal. Offered by Manipal University Jaipur (MUJ), the program helps learners get to the deep of economics and its role in national growth. It also emphasizes the recent growth of digital economies and how they are helping nations thrive globally. Up your game in the current economic scenario with MUJ’s online MA in Economics.
Information related to companies and external organizations is based on secondary research or the opinion of individual authors and must not be interpreted as the official information shared by the concerned organization.
Additionally, information like fee, eligibility, scholarships, finance options etc. on offerings and programs listed on Online Manipal may change as per the discretion of respective universities so please refer to the respective program page for latest information. Any information provided in blogs is not binding and cannot be taken as final.
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