Digital economy is defined as an financial system that makes a speciality of virtual technologies, i.E. It is based totally on digital and computing technology. It basically covers all enterprise, financial, social, cultural and many others. Activities which are supported via the web and different digital communique technology.
The term became first coined in a ebook “The Digital Economy: Promise and Peril in the Age of Networked Intelligence” via writer Don Tapscott in 1995.
There are 3 major components of this financial system, particularly,
e-commercial enterprise infrastructure
In the closing 15 years, we’ve got seen the superb growth of digital structures and their influence on our lives. Now customers are influenced via matters they see on social media (Facebook, Twitter, Instagram) and other cfa MBA such popular websites (youtube and so forth).
So this economy is a way to make the most this possibility. Now it’s far included into every issue of the user’s lifestyles – healthcare, education, banking, amusement and many others.
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Merits of Digital Economy
Digital financial system has given rise to many new traits and start-up thoughts. Almost all of the most important groups inside the international (Google, Apple, Microsoft, Amazon) are from the digital international. Let us look at a few important deserves of the digital economic system.
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1. Promotes Use of the Internet
If you think about it, maximum of your every day paintings can these days be done on the net. The large growth of technology and the internet that started inside the USA is now a worldwide network. So there’s a dramatic upward push within the investment on all things related – hardware, technological research, software, services, virtual verbal exchange etc. And so this financial system has ensured that the net is right here to live and so are web-primarily based organizations.
2. Rise in E-Commerce
The organizations that tailored and followed the internet and embraced online enterprise in the remaining decade have flourished. The digital financial system has driven the e-trade quarter into overdrive. Not simply direct promoting but buying, distribution, marketing, creating, selling have all become less difficult because of the digital economy.
Three. Digital Goods and Services
Gone are the days of Movie DVD and Music CD’s or data. Now, these goods are to be had to us digitally. There isn’t any need for any tangible merchandise anymore. Same is actual for offerings like banking, coverage and so forth. There is not any need to go to your financial institution if you may do every transaction online. So certain items and services were absolutely digitized on this digital economy.
Most transactions and their price in the digital financial system manifest on-line. Cash transactions are getting rare. This helps lessen the black money and corruption inside the marketplace and make the economy extra transparent. In reality, during the demonetization, the authorities made a push for on-line transactions to promote the internet economic system.
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Demerits of Digital Economy
1] Loss in Employment
The more we rely on generation, the less we rely on human sources. The development of the virtual economy may cause the lack of many roles. As the strategies get extra computerized, the requirement for human resources reduces. Take the instance of on line banking itself.
2] Lack of Experts
Digital economy requires complex tactics and technology. To construct the platforms and their maintenance require experts and educated professionals. These are not without problems to be had, particularly in rural and semi-rural regions.
3] Heavy Investment
Digital economic system requires a sturdy infrastructure, high functioning Internet, sturdy cellular networks and telecommunication. All of this is a time ingesting and investment heavy method. In a growing united states of america like ours, improvement of the infrastructure and network is a completely gradual, tedious and high-priced method.
Solved Example on Digital Economy
Q. Define Digital Economy.
A. Digital economy is described as an economy that makes a speciality of digital technology, i.E. It is based on virtual and computing technology. It basically covers all business, economic, social, cultural etc. Activities which might be supported through the internet and different digital communique technology.