Barriers and Impact of the Digital Economy

Introduction

Data is a valuable business asset that has received less management attention, but in today’s digital economy it is a core resource. So it does rank among fewer resources and business processes that are applied to other value-driving parts of the organization. Personal, behavioral and transactional data used in organizations need careful management in order to be accurate, accessible, compliant and fit for purpose. There is a strong need to raise professional standards in data management; help private and public sector organizations cope with growing regulation; help them organize to integrate disparate data sources to gain a holistic view of the customer, prospect and market; and unleash the full value of their data assets whilst avoiding the downside risks from data security breaches, data theft or loss and improper or inaccurate use of data. The digital economy is growing fast, especially in developing countries. Yet the meaning and metrics of the digital economy are both limited and divergent. The core of the digital economy is the ‘digital sector’ which is the IT/ICT sector producing foundational digital goods and services. The true ‘digital economy’ is that part of economic output derived solely or primarily from digital technologies with a business model based on digital goods or services consisting of the digital sector plus emerging digital and platform services. Following a review of measurement challenges, the chapter estimates the digital economy as defined here to make up around 7% to 10% of global GDP and 3% to 5% of global employment. Digitization of information, combined with the Internet, represents a form of general-purpose technology that is giving rise to a vast new array of possible combinations that we may refer to as the New Economy. The level of connectivity between actors and ideas is increasing dramatically. We have only begun to see the impact, and only part of it is measurable. Interpreted in this way, the New or Digital Economy is about dynamics, not static efficiency (Carlsson, 2004). It is more about new activities and products than about higher productivity. What is really new in the New Economy is the proliferation of the use of the Internet, a new level and form of connectivity among multiple heterogeneous ideas and actors, giving rise to a vast new range of combinations. There are some measurable effects on productivity and efficiency, but the more important long-run effects are beyond measurement.

The digitalized economy is visualizing as a recently advancing segment and this is evident provided estimates of double digits of yearly growth rate in an international dimension in the Global South. The influences of this emerging trend include the political and economic factors. However, these factors have their genesis in technological invention, which is shaped by wider influences. In the early 1990s, the economic transitions were linked to the advent of the internet, and this is still a basis for digital economy growth. However, during the early 2000s–2010s, merits of the novel Information Technology (IT) has been underpinned and diffused the economic transitions. The analysis of critical measurement issues evaluates the digital economy and estimates it to compose of 3% of the international employment opportunities and 5% of the international Growth Domestic Product (GDP). It is seen that the Global North has received massive shares of the digitalized economy until now. However, the rates of growth are fastest as seen in the Global South. However, the possible growth rate can be higher, and more research is required to comprehend much about the challenges to its and effects of digitalized economy in developing nations.