In the last 60 years alone, performance and productivity have been vastly improved by IT in virtually all economic activities and sectors. And today, digital technologies continue to advance IT’s contribution even further by bringing unprecedented insights into economic activities that have largely been untouched by IT.
As technological innovation and the digitalization of products and services continue to support economic activities, a fundamental shift is occurring that is redefining how we live, work, shop, and relate to one another. These rapid changes are captured in a new 21st century term: The Digital Economy.
90% CEOs believe the digital economy will impact their industry. But only 25% have a plan in place.” - Paul Taylor, Forbes, 2020
The digital economy captures decades of digital trends including declining enterprise computing costs.
Improvements in computing power and performance, unprecedented analytic capabilities, rapid growth in network speeds, affordability, and geographic reach, as well as high adoption rates of PCs, mobile, and other computing devices.
have set the stage to permanently alter how buying and selling will occur These trends among others have set the stage to permanently alter how buying and selling will take place within and between local, regional, national, and international economies.
The emerging digital economy concept is so compelling that world economists, financial experts, and others are currently investigating how they must substantially rewrite the rules governing how taxes, trade, tangible and intangible assets, and countless other financial issues will be assessed and valued in a digital economy.
The Impact of the Digital Economy
on Businesses and Consumers
E-Transactions
Digital technology has allowed businesses to conduct transactions electronically, making the process more efficient and less expensive.
E-Shopping
The digital economy has made it easier to shop for products and services.
E-Community
People can connect with a global community of people sharing the same interests.
The Components of a Digital Economy
The digital economy runs on hyper connectivity, which refers to the growing interconnectedness of people, organizations, and machines that results from the Internet, mobile technology, and the internet of things (IoT).
Three things distinguish the digital economy from the regular economy:
Infrastructure
Organizational infrastructures are a combination of technical resources and human talent.
Automation
Computer applications, RPAs, Chatbots, and sophisticated software carry out most of the business processes.
E-Commerce
More and more services and goods are being sold online, thus eliminating the need for physical stores.
How to Take Advantage of the Digital Economy?
Technology is revolutionizing even the oldest human production endeavors, such as agriculture.
For example, mobile apps can now monitor crops and send farmers updates about quality, soil conditions, and irrigation needs in real time so the farmers can make better management decisions.
According to MIT Sloan research, the companies that are adapting to a digital world are 26% more profitable than their industry peers.
The digital economy offers businesses several advantages, including reaching new markets, creating new products and services, and reducing costs.
Additionally, the digital economy can help businesses save money and time by providing them with access to information and services that they would otherwise have to search for or pay for.
It offers consumers more choices, convenience, and new ways to interact with businesses.
Collaborative Innovation
If companies want to stay afloat in the cut-throat global market, they must learn to be innovative.
Collaboration is the key to innovation, and it doesn’t just stop at working with people within the company.
To really succeed, businesses need to collaborate with customers, partner companies, startups, universities, and research communities.
Successful business giants such as Amazon, Apple, PayPal, Microsoft, etc. are harnessing the power of collaborative digital networks to build ecosystems that move beyond traditional linear supply chains.
Collaboration and ecosystems are particularly important in the emerging Internet of Things, where multiple companies across different industries must ensure their offerings work with each other in many highly complex areas including health care, home automation, and smart cities.
Product Enhancements
Companies should integrate related products and services into sophisticated industry solutions while extending and restructuring industry boundaries to create new industries.
Beyond individual products and traditional boundaries, testing the limit. E-commerce platforms like Etsy, Priceline, and Apple’s App Store have long been connecting buyers and sellers.
More recently, we’ve seen Airbnb and HomeAway emerge as popular choices for those looking to find a place to stay while on vacation.
And with Uber, Lynx, and RideScout leading the charge, it’s now easier to hail a ride from your smartphone.
What’s more, is that these companies are also ushering in a new era of on-demand work.
The global middle class is projected to grow threefold by 2030, but there’s also growing pressure on essential business resources which are only expanding 1.5 times as fast.
To solve this problem, enterprises need to share data securely and in real-time so next-generation commerce applications can succeed.
With the digitization of everything, UniAspect Digital is creating new networks that manage, optimize, and deploy commerce in a smart and efficient way.
Customer Expectations
No challenge is more daunting than keeping up with the customer service expectations of those who are constantly empowered by digital technologies.
While these same technologies make it easier for companies to connect with and offer cheaper experiences to their customers’, said customers have become considerably discerning over time.
Customers not only want an easy-to-use experience; they now demand proactive experiences. And big data is one way to go about it!
Data is integral to success and progression. UniAspect Digital’s Data Analytics services allow companies to fill in security gaps, quell privacy concerns, and break through analytic barriers.
Organizational Leadership
Companies must alter their structures and cultures to better cope with new market realities and business models.
The top-down hierarchy that characterized the 20th century’s industrial economy will not suffice in today’s more global and dynamic digital economy.
Decision-making is now becoming a game of analytics rather than the wrong opinions of senior executives.
Organizations are relying on data analytics, Artificial intelligence, Robotic Processes, and Machine learning for better and faster decisions
Cybersecurity — A Major Challenge in the Digital Economy
Technology transformation continues at an accelerated rate. However, businesses face increased cybersecurity threats.
The growing expertise of hackers, increasing cyber-attacks, and the thriving black market for stolen data and malware are points of concern.
According to an Accenture report, 74% of business leaders say solving the cybersecurity challenges of the Internet economy will require an organized group effort.
To protect the future of the internet, CEOs must partner with other top executives, policy creators, and government leaders to develop standards and policies to safeguard the internet.
79% of business leaders say the rate of technology adoption and innovation has outpaced the security features needed to ensure a resilient digital economy.
If business leaders don’t take active steps, there’s a genuine chance this lack of safety could stunt the growth of the digital economy at large, causing financial damage to both individual businesses and the economy as a whole.
Technological Revolutions — Another Dark Side
Like Industrial Revolution, the technological revolution today is causing significant societal and economic disruption.
As technologies continue to develop at a rapid pace, organizations and skills are progressing much slower rate.
In the coming decades, this gap will only grow wider as artificial intelligence, robotics, networks, analytics, and digitization increasingly impact the economy and society.
Creating cutting-edge organizations for the digital age is one of the most pressing challenges of our time, and companies should start adapting and implementing programs to bridge the human-AI gap.
The Future of the Digital Economy
The future of the digital economy is bright. With more and more people becoming comfortable with transacting business online, the growth opportunities for companies that can capitalize on this trend are limitless.
To stay ahead of the curve, businesses will need to make sure they have a strong online presence and can offer their customers a seamless, positive digital experience.
While there are many challenges that businesses will need to overcome to succeed in the digital economy, the rewards for those that can do so will be great.
The companies that can thrive in this new environment will be able to reach a larger audience than ever before and will enjoy increased profits and market share.
