What you need to know:
- The digital economy will soon become the ordinary economy as the uptake of digital technologies in every sector in the world grows.
- The boundaries between digital and traditional are blurring as technological change permeates every facet of modern life.
The digital economy has been getting a lot of attention, with increasingly strong headlines offering apocalyptic as well as breathtakingly exciting scenarios.
Some warn of job losses due to automation; some wonder at the things digital technology can do. And then there’s real scepticism about whether this will translate into delivering to people who need it most.
With all of this discussion, however, there is seldom an explanation of what the digital economy actually is. What makes it different from the traditional economy? Why should we care about it?
The digital economy is a term that captures the impact of digital technology on patterns of production and consumption. This includes how goods and services are marketed, traded and paid for.
The term evolved from the 1990s, when the focus was on the impact of the internet on the economy. This was extended to include the emergence of new types of digitally oriented firms and the production of new technologies.
Today, the term encompasses a dizzying array of technologies and their application. This includes artificial intelligence, the internet of things, augmented and virtual reality, cloud computing, blockchain, robotics and autonomous vehicles.
The digital economy is now recognised to include all parts of the economy that exploit technological change that leads to markets, business models and day-to-day operations being transformed.
So it covers everything from traditional technology, media and telecoms sectors through to new digital sectors.
These include e-commerce, digital banking, and even “traditional” sectors like agriculture, or mining, or manufacturing that are being affected by the application of emerging technologies.
Understanding these dynamics has become non-negotiable. The digital economy will soon become the ordinary economy as the uptake — and application — of digital technologies in every sector in the world grows.
The boundaries between digital and traditional are blurring as technological change permeates every facet of modern life.
We all need to understand the nature of this change to be able to respond at every level: society, corporate and personal.
The writer is a professor in the Chair of Digital Business at Wits Business School, University of the Witwatersrand. ©The Conversation