Digital Economy (The Digital Economy)
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A digital economy is one that is based on information technology (IT), computers, the internet, and the free flow of data and communications on a global scale, both within and between industries, to facilitate
A digital economy is one that is based on information technology (IT), computers, the internet, and the free flow of data and communications on a global scale, both within and between industries, to facilitate business and commerce.
The digital economy has revolutionized the way many firms do business. It has created entirely new business sectors and has eliminated others. Computer hardware companies, from the semiconductor industry to PC accessories – webcams, printers, hard drives and more – have all benefited. These have replaced or are replacing typewriters, film, and traditional printing presses.
The digital economy has allowed companies and individuals to communicate with each other across the world on an instant, real-time basis. Orders can be placed and fulfilled instantaneously, supply chains can be managed in real-time, and inventories are reduced to efficiency levels that were all bun unheard of just a few decades ago.
Many large retailers, for example, can manage just-in-time inventories and instantaneous order fulfillment with IT systems. The classic example is retailer giant Wal-Mart. When a customer purchases a product, and the store’s inventory level falls below a certain point, the purchase automatically triggers an order from the supplier.
The digital economy has also played a major role in accelerating globalization. The radiographer in Bangalore can now report x-ray results to the orthopedic surgeon in Singapore in mere minutes, online. The call center in Manila can now field calls from a US computer vendor in the US. All of these foreign activities are done at a fraction of the price they would cost in the US, the UK, or any European country.
The result is that the digital economies have led to huge cost savings and the creation of millions of jobs in developing countries.
