Digital economy or web economy represents the economic transactions that take place thanks to the internet. Along with economic globalization, the internet economy and traditional one are incorporated into one ecosystem. Let's learn more about the concept and the main features of the digital economy.

The emergence of the digital economy

During the last decade or so, we have witnessed the emergence of digital services and platforms which considerably influenced our everyday lives. The things we see on social media platforms like Facebook, Twitter, Instagram and other prominent websites influence our consumer choices, the way we communicate, shop and have fun. Web economy is at the core of deployment of many new tendencies and startups. Some of the most prosperous companies are from the world of digital technologies such as Apple, Amazon, Google, etc.

The Silicon Valley cradle of the digital economy 

The unprecedented combination of skills, funding and innovators explains the unparalleled success of Silicon Valley in the digital field, which subsequently influenced the rise of the web economy. Beyond the facilities it provides to digital players to recruit, finance, innovate and train, it also explains the collaboration between companies. While traditional companies have tried to stifle their competitors by filing hundreds of patents and exacerbating their activity protection, Microsoft and Apple have unfollowed this logic.

China as one of the leading digital economies

China became the leader of digital economy in 2020 as one of the largest adopters of digital innovations. Besides, the country is driving fast commercialization of new digital business models. Its large home market enables the adoption of digital aspects of the economy in all its forms. The three most aggressive players on the market are Baidu, Tencent is developing multifaceted digital ecosystems that reach every side of consumers' lives.

The advantages of the digital economy

1. Encourage Use of the Internet

The most part of everyday work can be done by using the internet. The massive increase in internet technologies that began in Silicon Valley today is the global network, leading to a huge increase in hardware, software, and digital communication investments. 

1. Deployment of E-Commerce

Online business and e-commerce have flourished during the last decade. Ecommerce has skyrocketed thanks to the implementation of the digital economy. Thanks to the digital economy distribution, buying, selling and producing have become much easier.

1. Digital Products and Services

Due to the digital economy's deployment, there is no such need for tangible products such as DVDs or CDs. Also, many goods and services, such as banking, have been entirely digitized.

1. Transparency

Cash transactions are becoming increasingly rare, corruption in the markets and black money reduce every day. In fact, online transactions promote the transparency of the web economy.

In Conclusion

A vector of growth, productivity and competitiveness for companies, the digital economy encompasses social and economic activities controlled by platforms linked to the Internet.

Due to its transversal and ultra-dynamic nature, it spares no sector of activity and is today at the origin of new innovative sectors such as e-commerce. The digital world is beneficial to each one of us, which was particularly demonstrated during the times of COVID 19 pandemics. Online shopping and payment have experienced the unseen booming in the last couple of months. Apart from the obvious benefits of the digital economy, we have to mention some downsides. First of all, the development of the digital economy infrastructure is tedious and time-consuming in many aspects. It requires highly trained experts to handle complex technologies. Also, dependence on digital raises the question of obsolescence of human resources as the algorithms become increasingly operational in all industries and sectors.