The digital economy refers to the wide range of economic activities that use knowledge and digitalized information as the primary production factors. The internet, big data, cloud computing and fintech among other digital technologies are used to analyze, collect, store and share digital information and also to transform interactions between people. Digital technologies drive economic growth, innovation and job opportunities in a country therefore the digitalization of an economy creates efficiencies and benefits (Brynjolfsson and ahin, 2002). Digital economy influences interactions between people and permeates all society aspects thereby influencing how people from different parts of the world interact and encouraging broad sociological changes.
The digitalization of an economy is built on three main pillars and the first one is real-time business whereby the pace at which businesses are accelerating is super-fast and the expectations of consumers and suppliers are increasing very fast. Business innovation is the second pillar and this means that businesses try to innovate new products, business models and processes and business agility is the third pillar whereby businesses has to remain agile, current and responsive. An example is in Asia whereby its digital transformation has brought about substantial impact on its economy in that twenty- five percent of e-commerce transactions are that of the business to consumer (Asian Development Bank, Feb 22, 2018). Understanding digital economy however remains a challenge due to its complexity. Digital transformation is not only about digital platform and big data but also how the already advanced technologies can be exploited to maximize opportunities for new business models and processes, innovation and smart services and products.
The rise of digital economy has essentially transformed the social life and economy of the United States and the world at large. United States exported about four hundred billion dollars of digitally deliverable services which accounted for over half of service export for United States in the 2014. Most innovative companies in the United Sates are founded by the most imaginative minds in engineering and business and indeed the digital economy thrives when the government works together with stakeholders and therefore the governments must create legal policies and diplomatic environments that are conducive to competition, creativity and investment.
The digital economy and the internet are very critical for the future progress of the wider American economy since they are source of global trade, jobs and also key to United States competitiveness. Estimations by experts indicates that digitalization has the ability to boost the United States Gross Domestic Product by up to over two trillion dollars annually by the year 2025 (United States Department of Commerce, June 2016).The United States government has come up with policies that support security in the digital economy since digital ecosystem has presented many security challenges to businesses and consumers online. The Department of Commerce has therefore worked to improve security and digital ecosystem resilience in order to sustain a digital environment that encourages innovation, efficiency and economic prosperity while promoting business confidentiality, consumer trust and security. The Department of Commerce has rolled out Digital Economy Agenda in order to ensure that America’s consumers and businesses thrive at this time of rapid global competition and technological change (Alan, February 2016). This Agenda is specifically deliberate to create a strategic and coordinated department wide program of work to so that American consumers and the entire business industry is support and protected from the negative impacts of digital technology and the internet.
In order to promote digital economy success, the United States government has the responsibility of providing the consumers with open and free internet that has minimal barriers to services across the border and the flow of data. In order thrive in a digitalized global economy, American consumers and businesses needs a skilled workforce and a faster infrastructure besides working as a team. Large and small businesses have adopted rapid operational cultures that allow them to react quickly to new economic trends and integrate the changing economic technologies into their daily work flow. Digitalized economy has made businesses, the government and consumers to work together under trust and protection policies and governments has to make sure the businesses and digital consumers are safe to make sure the economy grows (Tapscott, 2014). All of them has to benefit from the digitalized economy with consumers benefiting from efficiencies, businesses get profits and the state gets increased Gross Domestic Income.
There are many changes in the way businesses influence their prospective customers. From television commercials to print media, the methods of goods and services delivery have greatly focused on consumers. The strategies that businesses use to attract consumers have become much more engaging and personalized and are now tailored to speak to the needs, habits and interests of consumers. The complexity of the relationship between consumers and brands have deepened and it has become more important to have a business remain consistent, approachable and available to its audience more than ever (Goran, April 2018). The digital advancement has greatly affected how consumers go about their buying of goods and services. It is a social proof that online reviews are powerful deciders to many customers and about eighty-four percent trust online reviews besides personal recommendation and sixty-eight percent of consumers form their opinion after reading just a few online perspectives.
Digitalization has made available many brand messaging platforms available for businesses and therefore the messages that are directed towards consumers has to be well crafted and consistent at all times. Businesses has to design their product information in a way that it builds long term relationship and trust between them and consumers and also they must remain relevant at all times. With the continuous evolution of digital innovations that are targeting consumers, from website design to outreach, it is well understood that digital is vital in the cultivation and maintenance of an optimal customer relationship and experience. Contextual and visual elements within websites sets the tone for consumer-business brand relationship and therefore should be designed in alignment with visions of the brand. Businesses need to give consumers control via digital tools and assets they can use to control their empowered relationships.
Open source businesses for example knows that their customers are not idiots and that is why they encourage their customers to tinker with their products and from this they are able to improve their products and make them better. We are currently in a world where digital technology supports extremely diverse range of models and products for production and making the consumer the producer is the exceptional way to make a business move up and be able to flourish in this digital world (Wired, January 6th, 2006).
Some people argue that advancement in technology has resulted in unemployment however this is only true under capitalism. Capitalism here refers to a system whereby scarce resources are privately owned (). Individual capitalist presents technology and also improves productivity so that they can increase their own personal profit without any regard for the needs of the society and the standard of living of workers. Capitalism cannot even use the technology and knowledge that are discovered by the society over millennia. Initially capitalism was meant to be a system in which profit motive and competition provided an incentive to invest in technology and new machinery that saw the development of steam power and its application and also the development of industrial revolution. The profit and competition motive that rose from private ownership of production has greatly become a huge barrier to technology and science development and more than ever, there is need to transform the society by overthrowing the rotting social relations of capitalism that has become more evident in the society. There are no incentives for capitalists to invest in technology that is labour-saving since there is plenty of cheap labour around the world.
The potential of the internet to add to public wealth has only been directed towards increasing private riches. Since the internet was transformed to be a private good in the 1990s, there has been impacts on who accesses the information, the contents and the most accessible information. Capitalism’s technological revolution has caused extraordinary disparity, harrowing poverty and unchecked exploitation in the society (Lal, 19th June, 2018). Technology is currently being used against working people under capitalism since capitalism owns, appropriates and patents new technologies which have eventually impacted on those who are vulnerable economically. The original idea of the founders of Google was to create free access to knowledge and information by computer experts and geeks has since become a business with billionaires. Capitalism has made the generous public spirit to become a private adoption of technology Conglomerates like Amazon, Google and Apple are currently monopolizing information technology and are becoming the major corporate cartels in the whole world.
Despite the present technological advances, capitalism still continues to thrive and is increasing the exploitation of markets and labour, stagnant wages and growing inequality. For the people who are working, their conditions are spiraling downwards with irregular employment, part time work and contracts. It is only the positions of business owners that is becoming more secure thereby resulting in more oppression. When the new technologies are released in societies by primitive labour contracts, what follows is widespread misery. It is therefore important that the current system be replaced by modes of production and technologies for humanity service and this is only possible via democratic control of the society that is under a socialist economy that is carefully planned.
Despite the increased productivity in the digitalized economy, waged workers are losing their ground because of the capital owners are accumulating wealth which is the main goal of capitalism. So many forms of labour that is digitally mediated are no longer being mediated as much as they are generating economic value. By digitally mediated labour I mean casual labour that is short termly managed through contracts like the Mechanical Turk and Uber business (Qiu, Gregg and Crawford, 2014). As much as their labour is technologically mediated, they earn below minimum wage or as much as they are paid more, they take expensive risks of their lives like in the case of uber drivers who uses their own vehicles, fuel and also insure them but do not receive any protections or benefits. The problems lies in how to figure out the way to reconfigure the digitalized economy so that people can be equal (Bonnie, August 3, 2015). Capitalism has greatly excelled in production and it is now time to address the problems of distribution.
References
Alan Davidson (February 2016). Commerce Department Digital Economy Agenda. Department of Commerce, United States Retrieved from: https://www.nist.gov/sites/default/files/documents/director/vcat/Davidson_VCAT-2- 2016_post.pdf
Asian Development Bank (Feb 22, 2018). Understanding the digital economy: What is it and How can It Transform Asia? Asian Development Bank Institute. Retrieved from: https://www.adb.org/news/events/understanding-digital-economy-what-it-and-how-can- it-transform-asia
Bonnie Nardi (August 3, 2015). Inequality and Limits. First Monday Journal. Volume 20
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