The economy has been a part of the human activity for centuries. However, there has been changing trends in the tools of economy and exchange. Economy involves the exchange of goods and service, and there is a big different in the mode of transfer when compared centuries ago and now. In a similar way, digital economy entails some elements of the old economy. However, digital economy is different in the sense that it involves worldwide economic activities that are facilitated by information and communication technologies (Illing&Peitz, 2006). For the digital economy to be a success, there are several element that must be present. The first element is technology infrastructure itself which include software, hardware, and different networks. The second element that must be there to ensure the successful digital economy is a process that allows digital processes to happen, and these methods are digital. Lastly according to Shaw (2006), the most important component of the digital economy is e-commerce which is the digital transaction that allows consumers to access goods and services from different companies.
Digital economy has made it possible for consumers to buy products from organizations that are not within their reach. The internet has played an important role has it has connected companies and customers from different locations. A good example is online shopping. It is now possible for a consumer in China to order and purchase products that cannot be found in their country through the internet. Online shopping sites such as alibaba.com and EBay allow users to order for anything they want. A pair of new Nike sneaker maybe on the market in the United States but a Chinese consumer may have to wait until later. While some customers want to be in touch with the latest trends, they have to get a solution, but they do not have to travel to the United States to get the new Nike edition. It is, therefore, fine to say that digital economy has made it easier to access products and services whether it local or international. I appreciate what digital economy has done because I can relate since I once bought a pair of tickets to a movie online without having to go to the theater. The economy has been transformed therefore in the sense that it is now possible for even individuals to start up their websites and online shopping site and make an income out of it. When compared to old economy trends that required physical locations there are more opportunities for innovations with the start of the digital economy.
Digital economy has also led to several money transfer innovations that have transformed the way business is done globally. I am still mesmerized by the fact that I can now use my mobile phone to send money to a person that lives far away as far as Dubai. Ten years ago who would have thought that would be possible. Digital economy involves the use of mobile phones, computers, and the internet. Initially, a customer had to go to buy whatever they wanted physically. However, the rise of the digital economy has demanded innovations that can make the life of the consumer easier. A good example of innovation that has captivated my imagination is the M-Pesa service that was founded in Kenya, East Africa. What interest me about the innovation is that there is safety in sending money to people who live far away instantly. Another element of the innovation is that it is now possible to pay for goods and services without using actual money. The user of the innovation just needs to top up their mobile account, and they are ready to send money or buy goods and services. It is now possible to pay for gas through such innovations, buy goods and they get delivered to your location.
The banking sector uses the digital economy to give their consumers to the bank through their mobile phones. It is now possible for account holders to withdraw money through their phones and also deposit money into their accounts. By looking at the three examples, it is clear that digital economy strongly depends on information and communication technology. The internet is a significant component of the digital economy, and so are devices such as laptops, mobile phones, and computers. The digital economy has opened up unlimited opportunities for new businesses regardless of the capacity as long as there is knowledge of information and communication technologies. Businesses that could not be accessed are now accessible through digital economy. An advertisement that is now done on social media platforms such as Facebook, Twitter, Instagram, and YouTube are now ways that businesses are using to market themselves, their products, brands, and services. In conclusion, the digital economy has come with more positives regarding business transactions. It has made it easier for consumers to reach products and services. It has also made it cheaper for businesses to sell themselves to potential consumers (Turban & Turban, 2006). The number of business opportunities regarding innovations has been encouraged by the need to satisfy the requirements of different organizations and consumers as far the economy are concerned.
Illing, G., &Peitz, M. (2006). Industrial organization and the digital economy. Cambridge, Mass: MIT Press.
Shaw, M. (2006). E-commerce and the digital economy. Armonk, NY: M.E. Sharpe.
Turban, E., & Turban, E. (2006). Information technology for management: Transforming organizations in the digital economy. Hoboken, NJ: J. Wiley & Sons.
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