Digital economy and its innovations impact on society

RESEARCH METHODOLOGY

Class – MMS

Name – Surbhi Sachin Jundre

Roll No. – 08

Topic – Digital Economy and its innovations impact on society

 

1. Albérico & Joana states that most companies struggle to balance exploiting opportunities in the digital economy to support sustainable development while mitigating potential challenges that can undermine efforts.  the opportunities and challenges of the digital economy in a sustainability context to support business professionals’ efforts to integrate advanced technologies in a sustainable development context. They say by incorporating sustainability principles into digital practices, we can harness the power of technology to build a more sustainable and inclusive future. The intersection of the digital economy and sustainability creates challenges and opportunities for entrepreneurs, policymakers, and society. For example, the digital economy promotes sustainable development through innovations such as green technologies and circular economy models. It also offers opportunities that expand digital inclusion and empowerment. However, the rapid growth of the digital economy also presents several challenges, including high energy consumption, e-waste, and pollution. In recent years, there has also been an increase in cybersecurity issues, including consumer concerns about data privacy and security and cyberattacks. Therefore, a comprehensive literature review is needed to assess the relationship between the digital economy and sustainability to create appropriate strategies that address the challenges, while enabling companies to seize the opportunities.The digital economy presents several benefits that can contribute to economic growth, innovation, and development. The digital economy is also associated with greater efficiency and productivity. Companies are leveraging digital technologies to streamline their operations, improve the accuracy and speed of decision making, and automate repetitive tasks. For example, advanced communication channels facilitate quick communication and collaboration between business leaders, thus ensuring easy task execution and timely decision making. Finally, the digital economy has created new jobs and employment opportunities, especially in technology development, digital marketing, and e-commerce.

 

2. Aliyev, A. G. explains The modern transition to the digital information economy is becoming the main factor of GDP growth . This is related not only to the effect obtained from the automation of existing processes, but also to the introduction of new, breakthrough business models and technologies, including digital platforms, digital ecosystems, deep analytics of big data, and Industry 4.0 technologies. Some scholars prefer to talk about the digital economy, which changes the paradigm towards the development of flexible economic organisation schemes, where coordination occurs through digital technologies, and develops relations between business subjects.In order to successfully implement the formation of the Digital Information Economy at the regional and national level, along with developed countries such as the United States, European Union countries, Japan, China, India, South Korea, etc. Current trends in the development of ICT-based economies in developing countries were analysed and taken into account. The digital economy is the construction, analysis, application, etc. of digital models of economic, social, engineering, natural, and ecological systems. based on technologies. Such models should integrate knowledge about man, society, nature, and technology. In the developed digital economy, the main subjects of communication and management processes are data, knowledge, and models.

 

3. Chereshnia,in this study, says that contribution lies in its development of the Digital Economy Index, its application to evaluate the digital economy in diverse regions, and its insights into the underlying factors driving digital economy development. These findings have implications for policy interventions aimed at addressing digital inequalities and fostering economic growth in the digital era. There are numerous sub-national research studies of the digital economy that have been conducted across different regions and countries. One sub-national regional index that measures the state of the digital economy in Brazil is the “Índice Cidades Amigas da Internet” (Brazilian Network Information Center 2021). The index evaluates the quality and availability of internet infrastructure and services in Brazilian cities. The Mexican Institute for Competitiveness (IMCO) published the “Índice de Competitividad Digital Estatal” (State Digital Competitiveness Index). The index evaluates the level of digital competitiveness of Mexican states, taking into account factors such as the quality and availability of digital infrastructure, the use of digital technologies by businesses and government, the level of digital skills and literacy among the population, and the development of digital services and startups. The “India Digital States Index”, a sub-national regional index, is jointly produced by the Internet and Mobile Association of India (IAMAI) and consulting firm Coeus Age Consulting (2019). The index considers various factors such as the availability and quality of digital infrastructure, the level of digital literacy and skills among the population, the use of digital technologies by businesses and the government, and the development of digital services and startups. By evaluating these factors, the index provides a comprehensive assessment of the level of digital development and adoption in Indian states.

 

4. Hintošová & Bódy explains that with the changing nature of foreign direct investment flows, the global economy is being fundamentally transformed by the onset of the digital economy, gradually disrupting the existing economic order. The development of the digital economy influences the patterns of foreign direct investment flows.This paper is aspiring to contribute to the fulfilment of this gap in the existing literature by studying the interlinks between the sustainability attributes of FDI and the development of the digital economy. The study highlighted the role of foreign direct investment in the context of the development of the digital economy which was conducted by Zekos, who designated as target FDI locations those offering a cheap and highly skilled labour force, as well as clusters of information companies. Another insight into the FDI–digital economy nexus was provided by Gönel and Aksoy, who found that FDI inflows to information and communication technologies boost economic growth only in the case of a sufficient level of host countries’ financial resources and human capital, as well as technological infrastructure. They pointed to the fact that the digital economy brings new ways of doing business, which, to investment, means a reduced need for the presence of specific physical assets in host countries and, thus, a retreat of foreign direct investment.However, the relationship between FDI and the development of the digital economy can also be explained from a bi-directional point of view. There are some studies that attribute an active role to inward FDI in boosting the digital transformation of the economy, especially in the case of emerging and transforming economies.

 

5.Lazuardi at al explains here that because this study focuses on quantitative measurements, trends, and data-driven insights into innovation in the digital economy, scientometric analysis is the best method to apply in the present study.Digital economy’ is a strategic contextual frame for this research. In the 21st century, the digital economy is a transformative force that reshapes industries, markets, and business models. The digitalization of economic activities and the influence of digital technologies on economic development are essential. The minimum sample size used for this research is scientometric analysis which varies depending on the nature of the analysis and the population being studied. Sample sizes of 200–1000 papers have been a good guide for achieving relative (but not absolute) significance. Scientometric analysis was carried out using two applications, including the biblioshiny application and VOSviewer. The type of analysis that can be carried out in the biblioshiny application includes performance analysis. At the same time, in science mapping, one analysis uses VOSviewer, namely co-authorship based on countries, which examines social structure. Performance analysis is divided into four data analyses, including descriptive analysis, which consists of descriptive statistics, publication and citation trend analysis, and discipline-wise analysis.The  evolution from 2000 to 2023 demonstrates that the initial theme that emerged in 2000–2010 was the digital economy and innovation, whereas, in 2011–2020, the digital economy and innovation merged and reformed the theme of the digital economy, while innovation formed a new theme, namely digital transformation, which evolves into the digital economy, digital technology, digital innovation, business model innovation. The enormous increase in publications on innovation in the digital economy over the past 20 years is evidence of the field’s increasing significance. The digital economy has transformed from a novel concept to an essential global economic force. In response to this change, scholars have generated extensive knowledge that aims to comprehend, maximise, and exploit the potential of digital innovation.

 

6.Min-Hyuk Cho, & Chan-Goo, Y. states that , the digital economy is a part of economic output derived solely or privately from digital technologies with a business model based on digital goods and services. The digital economy derived from technological innovations is charging the mechanism of the production, consumption and distribution as a result social change is brought to us in terms of working style, market orders and lifestyle. The second section proposes the concept and process of adaptive social innovations which is discussed by focusing on the social and economic changes by the digital economy and the perception level of individuals and groups to cope with such changes, the economic subject’s behaviours, the interactions between public sectors. The third sector examines the key motive of social innovations which are analysed by focusing on the digital economy phenomenon in the innovation studies, macroeconomics, social psychology and policy studies.

 

7.Mishra & Sharma collectively says that this study has highlighted the significant impact on adaptability and accessibility of digital payment systems on the growth and development of the economy. Adoption of digital payment system depicts a positive impact on economic growth and development by increasing financial inclusion, reducing transaction cost, and promoting financial innovation. Government helps in promoting the digital payment system by developing necessary infrastructure and policies. Financial institutions can leverage digital payment systems to reach a broader customer base and promote financial inclusion, while businessmen can reduce transaction costs and increase efficiency by adopting digital payment systems. This study emphasises the potential benefits of a digital payment system for financial inclusion, transaction cost reduction, and financial innovation. Future studies could inspect the digital payment system impact on specific economic sectors such as agriculture, healthcare, or investigate the impact of digital payment systems on income distribution and poverty reduction.It explores the impact of digital payment systems on various economic indicators, such as GDP growth, exchange rate, financial inclusion, and income distribution. It also helps policymakers, financial institutions, and business owners who seek to leverage digital payment system potential to drive economic growth and development.

 

8.Pang at all states here in recent years, the global economy and trade have entered a historic transformation period due to the intensification of trade conflicts among various countries as well as challenges in cross-border financing and investment. In this significant transformation, emerging economies have gradually taken the lead in driving global economic growth, while technological innovation and globalisation have further expanded the geographical scope of trade. The digital economy has emerged as a key engine for technical innovation with the advancement of information and communication technology. The core of the digital economy is information technology, including big data, cloud computing, artificial intelligence, etc. These technologies facilitate transforming and updating the industrial structure through enhancements in production efficiency, transaction cost reduction, and innovation stimulation.As more companies adopt these digital approaches, the entire industrial sector benefits, experiencing not only reduced production costs  and increased efficiency  but also the stimulation of greater innovation, leading to the transformation and upgrading of the industrial structure. Although the digital economy brings many opportunities, there are also challenges. Some scholars believe that the digital economy’s rapid growth could exacerbate particular industries’ over concentration and cause an imbalance in the industrial structure.

 

9.Pineda at all says that the digital economy involves transforming economic activities through the intensive use of digital technologies. This shift towards digital has not only impacted the way transactions are carried out but has also driven innovation in products and services, thus redefining traditional market dynamics and reflecting the adaptation of economic activities to a digitalized environment, where technology becomes the backbone of everyday business interactions. Blockchain has a significant impact on these digital technologies due to its ability to offer a revolutionary method of decentralised registration and verification, using a data structure in chained blocks, each one linked to the previous one in an immutable and secure way, eliminating the need for intermediaries in the digital transactions, which not only provides an unprecedented level of security and trust but also speeds up operations by reducing the execution times of any transaction. Blockchain technology influences how digital data is managed and shared by offering an efficient model resistant to data manipulation, resulting in a greater integrity and reliability of information, extending this impact through various digital economy applications. the digital economy where trust is essential, blockchain architectures act as a fundamental pillar of digital technologies due to their ability to offer a secure, transparent, and decentralised system of registration and verification of transactions, which not only increases security by making data manipulation extremely difficult but also streamlines processes by providing a distributed consensus without relying on a central authority. 

 

10.Zhang at all say that the digital economy optimises urban and rural digital infrastructure through digital industrialization to improve the factor flow mode and expand the spatial scale of factor flow. On the other hand, it promotes the deep integration of cutting-edge digital technology and the real economy through industrial digitalization and triggers the reflow and reallocation of production factors between different industrial sectors by giving full play to the substitution and complementary effects of digital technology on production factors, and the reflow combination of production factors means the readjustment of the income distribution pattern. The digital economy is able to effectively promote the restructuring and upgrading of production factors between the agricultural and nonagricultural sectors (or between urban and rural areas) to improve the factor allocation efficiency. This article focused on examining whether the inter-departmental flow of production factors triggered by the development of the digital economy can improve the efficiency of factor allocation between the agricultural and nonagricultural sectors. What impact will the income distribution pattern between the agricultural and nonagricultural sectors have on the full flow and redistribution of labour and capital between the agricultural and nonagricultural sectors? From the dual-perspectives of factor allocation efficiency and income distribution fairness, we examined the economic and social effects of digital economy development. 

11. Summary 

New forms of economic activity, including the digital economy, have emerged as a result of developments in artificial intelligence (AI), blockchain, and 5G networks. The detection, screening, processing, preservation, and application of big data constitutes the digital economy, an economic structure that leads and accomplishes speedy optimum distribution and rejuvenation of resources, attains “high-quality economic growth”, and promotes PEB ( Pre- economic Behaviour) not only within the corporate sector but in the whole society. Entrepreneurs, customers, and authorities across all economic sectors all over the globe realise the importance of ICT. Almost every large economy in the world has identified “green” and “digital” as the two buzzwords of important policy orientations for moving towards PEB. ICT and digitalization, in general, have opened up new doors for sustainable practices in the environmental and economic spheres and paved the way for business firms and the general public to follow PEB. The digital economy, fueled by information and communication technologies (ICTs), has become a transformative force, weaving its way into nearly every aspect of our lives. Its impact on society is multifaceted, presenting both opportunities and challenges. In conclusion, the digital economy is a powerful force with the potential to reshape societies for the better. By acknowledging its challenges and working towards responsible development, we can harness its power to create a more equitable, inclusive, and thriving future for all.

1. Albérico Travassos Rosário, & Joana, C. D. (2023). The new digital economy and sustainability: Challenges and opportunities. Sustainability, 15(14), 10902. doi:https://doi.org/10.3390/su151410902

 

2. Aliyev, A. G. (2023). A conceptual approach to the formation of an intelligent digital innovation economy. Informatica Economica, 27(2), 5-14. doi:https://doi.org/10.24818/issn14531305/27.2.2023.01

 

3. Chereshnia, O. (2023). Spatial assessment of the digital economy at the national and sub-national level. Social Sciences, 12(8), 445. doi:https://doi.org/10.3390/socsci12080445

 

4.Hintošová, A. B., & Bódy, G. (2023). Sustainable FDI in the digital economy. Sustainability, 15(14), 10794. doi:https://doi.org/10.3390/su15141079

 

5. Lazuardi, I. H., Ahman, E., Disman, D., Mulyadi, H., & Hakam, D. F. (2023). Exploring trends in innovation within digital economy research: A scientometric analysis. Economies, 11(11), 269. doi:https://doi.org/10.3390/economies11110269

 

6. Min-Hyuk Cho, & Chan-Goo, Y. (2022). Adaptive social innovation derived from digital economy and its impact on society and policy. Sustainability, 14(6), 3408. doi:https://doi.org/10.3390/su14063408

 

7. Mishra, J., & Sharma, S. (2024). A study on impact of adaptability and accessibility of digital payment systems and its impact on growth and development of economy. Academy of Marketing Studies Journal, 28(1) Retrieved from https://www.proquest.com/scholarly-journals/study-on-impact-adaptability-accessibility/docview/2895187311/se-2

 

8. Pang, J., Zhang, Y., & Jiao, F. (2023). The impact of the digital economy on transformation and upgrading of industrial structure: A perspective based on the “Poverty trap”. Sustainability, 15(20), 15125. doi:https://doi.org/10.3390/su152015125

 

9. Pineda, M., Jabba, D., & Nieto-Bernal, W. (2024). Blockchain architectures for the digital economy: Trends and opportunities. Sustainability, 16(1), 442. doi:https://doi.org/10.3390/su16010442

 

10. Zhang, B., Dong, W., Yao, J., & Cheng, X. (2023). Digital economy, factor allocation efficiency of dual-economy and urban-rural income gap. Sustainability, 15(18), 13514. doi:https://doi.org/10.3390/su151813514