Digital Economy

It is clear that the economy in which we live is very different from the one that existed only 20 or 30 years ago. The irruption of the Internet and mobile devices in our lives have totally changed the traditional system of the economy, and there is still a long way to go for it to change even more, and in a more accelerated way. In fact, this new economy is called “digital economy”, but what is the digital economy?

Digital economy basically refers to the use of information technologies in the production processes of goods and services, as well as in their marketing and consumption. In other words, it refers to the consumption or production (whether of products or services) using information technologies in some way or another. Good examples of the digital economy are virtual education, social networks, electronic commerce or digital bank.

Characteristics and advantages of the digital economy

As we mentioned previously, the digital economy has a series of characteristics that differentiate it from the traditional or industrial economy, mainly:

• Infrastructure: the production, consumption and/or commercialization are carried out through the use of technological resources.
• e-business: it is a business that includes technology in its processes, using software applications or digital platforms, for example.
• e-commerce: refers to the purchasing and selling of products and services over the internet.

It must be taken into account that the digital economy has provided and will continue to provide multiple advantages, both for producers or service providers and for consumers.

This type of economy provides more information, since a greater amount of data is available to make decisions about what the consumer is looking for. It also provides greater proximity, since the consumer can contact the manufacturer, service provider or distributor more directly through websites, applications or social networks. This is closely related to the global presence, which, although it may seem that it distances the consumer and the product, really brings them closer, since the consumer can access the offer of products and services at any time and place. In addition, another of the great advantages is the security offered by this type of economy, since digital transactions have technology that makes them secure, such as the reinforced authentication of digital payments.

It is clearly important to point out that all these advantages have multiple risks, such as fraud and the difficulty for some consumers to carry out transactions only digitally (especially for older people or with less access to new technologies).

Future of the digital economy

The future of the digital economy does not seem to be to keep a share of the economy outside of the traditional forms of economic activity, but little by little to be incorporated into it, complementing one another, rather than replacing it, and contributing the value that the traditional economy needs.

For this reason, it is believed that everything related to the digital economy (payments, electronic commerce, etc.) will increase at high rates in the coming years. Although there have already been high growths, this will only increase. Probably, large companies will increase the power that their digital economy already has, and those smaller companies will have to adopt digital processes or resources for their subsistence and be able to reach those consumers who, in one way or another, use digital media to consume.

OMAR CAMERO Contador Público Autorizado Socio Director de Camero, Camero & Asociados..