What is the digital economy?
The digital economy is that branch of the economy that incorporates the internet, in order to facilitate the production and marketing of goods and services. This economy is based on the use of information technologies , which are increasingly important in the economic development of a country due to the technological progress experienced by societies.
Composed of 3 key components, the digital economy allows globalization to be promoted, by making use of tools and elements capable of linking various individuals regardless of distance, Blockchain Development Company immediately and without excessive use of resources as in the exchange in person. The internet is one of the most essential components, since it allows the connection between the parties involved, providing the necessary networks to carry out said link.
The digital infrastructure is also part of the elements used by this economy, by including hardware used in digital processes, such as computers, servers, programs, applications, etc. Finally, the individuals in charge of making use of and mobilizing this type of economy are considered the last component of it.
Characteristics of the digital economy
The main characteristics of the digital economy are listed below:
- All the information used is digital, which allows a large amount of information to be transferred immediately.
- Knowledge constitutes its fundamental part and everything else works through it, leaving aside traditional resources.
- It allows linking merchants , suppliers and users in a more direct way.
- It encourages the development of new products and services , making use of imagination and creativity.
- It drives economic globalization , as it allows companies to gain access to markets abroad.
Advantages and disadvantages of the digital economy
The main advantages of the digital economy are the following:
- Better prices are obtained, and therefore, investments are saved.
- It offers great facility for the investigation of the consumption of products and markets, through digital marketing .
- The consumer is in charge of searching for the product or service they need, allowing the buying and selling process to be easier.
- Production costs are reduced and the product also reaches a greater number of people.
The main disadvantages of the digital economy are the following:
- It can generate a certain degree of distrust in consumers because they do not physically see the product.
- The process of obtaining the product may be slower.
- Companies must develop a lot of ingenuity and creativity to reach their consumers and earn their trust.
- Many people are not tech savvy, making it more difficult for them to purchase the products.
Components of the digital economy
The components that make up the digital economy are listed below:
- The digital infrastructure : includes hardware such as: servers, transmission systems, computers, etc.
- People or users : who are the members that make this type of economy possible.
- Internet: allows the sale and purchase of goods and services through the network.