The Digital Economy is an economy that focuses on digital technologies. It is a worldwide network of economic activities, commercial transactions, and professional interactions enabled by ICT (Information & Communication Technology).

In simple terms, it is the economic activity that results from billions of everyday online connections among people, businesses, devices, data, and processes.

Over the years we’ve seen a tremendous growth of digital platforms and their influence on our lives, even to the point of consumers being influenced by things they see on social media (Facebook, Twitter, Instagram) and websites like YouTube.

It has been integrated into every aspect of our life – healthcare, education, banking, entertainment, etc. It continues to gain importance because it has given rise to many trends and start-up ideas. Some of its important merits are;

  1. It promotes the use of the internet; most of our daily work can today be done on the internet and with investments in all related hardware and software peripherals, digital communication, etc. It is sure that the internet is here to stay and so are web-based businesses.
  2. Rise in E-Commerce; the digital economy has pushed the e-commerce sector into overdrive. Most businesses that adapted and adopted an online presence have flourished. Creating, Marketing, Buying, Selling and even distribution have all become easier.
  3. Digital Goods and Services; these days goods and services have been completely digitalized. Movies can be watched online, items can be purchased online, books can be read online, and bank transactions can be done in the comfort of our homes.
  4. Transparency; seeing as almost everything can be done online, it has reduced corruption in the market and made the economy more transparent.
  5. The Future of Work; the 2020 pandemic fast-tracked the transition of regularly going to the office, now people can work from their homes, a coffee shop, or anywhere; with the same level of productivity and higher flexibility.
  6. Customer Experience; the digital economy has prompted a seamless, direct, and personalized engagement for customers and businesses.

And its demerits include;

  1. Loss of Employment; as we depend more on technology, we depend less on human resources. The advancement of the digital economy has led to the loss of many jobs and as processes get more automated the need for human resources reduces.
  1. Shortage of Manpower; the digital economy requires complex processes and technologies. It requires experts and trained professionals that are not readily available, especially in rural and semi-rural areas.
  2. Heavy Investment; a lot of infrastructures, high functioning internet, strong mobile network, etc All of these consume heavy investment and processes.

Economies and enterprises are moving toward a digital future to thrive in the new world. Organizations and businesses must understand their level of digital maturity and embark on opportunities to make them digitally determined.

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