What Is a Digital Economy?

Digital Economy As a concept of economics, the digital economy is an economy in which humans identify, select, filter, store, and use big data (digital knowledge and information) to guide, realize the rapid optimal allocation and regeneration of resources, and achieve high-quality economic development. form. The digital economy has continuously enhanced its ability to process the quantity, quality, and speed of big data through information technology such as network infrastructure and smartphones, and Internet-cloud computing-blockchain-Internet of things. The transformation from industrial economy to information economy-knowledge economy-smart economy will greatly reduce social transaction costs, improve the efficiency of resource optimization and allocation, increase the added value of products, enterprises, and industries, and promote the rapid development of social productivity. Sexual development provides the technical foundation. The digital economy, also known as the smart economy, is an essential feature of Industry 4.0 or post-industrial economy, and is the core element of the information economy-knowledge economy-smart economy. Thanks to the historical opportunities provided by the digital economy, China has been able to achieve transcendent development in many areas ^[1]

Digital economy

(Connotation of Digital Economy)

Digital economy as

Digital economy as an economic concept. The digital economy is the identification, selection, filtering, storage, and use of humans through big data (digital knowledge and information) to guide and implement the rapid optimization of resource allocation and regeneration.

In the digital economy, information technologies such as network infrastructure and smart phones, Internet-cloud computing, blockchain, and the Internet of Things are continuously upgraded to improve the quantity, quality, and speed of big data. The transformation from industrial economy to information economy-knowledge economy-smart economy will greatly reduce social transaction costs, improve the efficiency of resource optimization and allocation, increase the added value of products, enterprises, and industries, and promote the rapid development of social productivity. Sexual development provides the technical foundation. The digital economy, also known as the smart economy, is an essential feature of Industry 4.0 or post-industrial economy, and is the core element of the information economy-knowledge economy-smart economy. Thanks to the historical opportunities provided by the digital economy, China has been able to achieve transcendent development in many areas ^[1]

Digital economy refers to an economic system in which digital technology is widely used and thus brings the entire

The development of the digital economy gives management including competition strategy, organizational structure and culture

The digital economy is governed by three major laws.

The first law is

The essence of the digital economy is informationization. Informatization was caused by the revolution of production tools such as computers and the Internet

• Trend 1: Speed becomes a key competitive factor

With consumers'

Since the 1990s, the United States has seized the opportunity of the digital revolution and created economic prosperity for more than a decade. Regions and countries such as Europe and Japan are also closely following the United States and actively promoting the digital revolution, which has produced great results. For developing countries, the digital revolution is a golden opportunity. In the digital age, developing countries can take full advantage of the late advantages of the digital economy and narrow the digital divide with developed countries. India is a typical case of using the latecomer advantages of the digital economy to make its information technology globally competitive and to promote the rapid development of its economy.

• The late advantage of increasing marginal returns

The characteristics of the digital economy indicate that in the stage of knowledge innovation, the wider the scope of knowledge application, the more customers involved, the more value can be created. At the stage of popularization and imitation of knowledge, due to timeliness, the marginal reward of knowledge in developed countries has declined. In developing countries, high marginal returns can be maintained. Because for developing countries, this knowledge is still the latest and most valuable. Information technology has been in the stage of popularization and imitation since the 21st century. It is in the best interests of developed countries to spread to developing countries, which can greatly increase the speed of informationization in developing countries.

• Latecomer advantages in industrialization

Western countries only entered the stage of informatization development after a long process of industrialization. After the 21st century, the transfer of manufacturing production to developing countries has become a major strategic move for many developed countries to improve their industrial structure and focus on developing the leading industries of the digital economy. For developing countries. This brings three benefits:

First, developing countries can make full use of the industrialization achievements of developed countries. Including technical and institutional achievements, greatly shortening the process of industrialization and accelerating the country's economic development;

Second, developing countries can combine industrialization and informatization, promote the development of industrialization with informatization and high technology, completely transform traditional industries, and reshape their comparative and competitive advantages;

Third, developing countries can use information technology on a large scale to reduce production and transaction costs across the society, accelerate the cultivation of market relations, and gradually form a strong logistics, capital flow and information flow, and promote the market economy to prosperity.

Latency in customer resources

Some developing countries have large populations, rapid economic growth, and abundant customer resources. Their market potential is far beyond that of developed countries. This has formed the first-level network comparative advantage of developing countries. If development trends are taken into account, almost all developing countries are a market to be developed.

The combination of rich customer resources in developing countries and rich knowledge and network resources in developed countries will greatly promote the development of the world economy. The strong attractiveness of developing country's market potential will promote the continuous inflow of technology and capital from developed countries, and cause fundamental changes in the industrial structure, technological level and human resources of developing countries, thereby reducing the digital divide and improving development. China s income and productivity levels.

• Latecomer advantage

Some developing countries have vigorously promoted education and science and technology, which has increased the endowment of knowledge elements, especially the ability to acquire knowledge, transfer knowledge, and use knowledge has increased extremely rapidly. This has formed a second-level network comparative advantage in developing countries. In order to make it occupy a comparatively favorable position in the international division of labor, it will promote the rapid development of the digital economy of the country. For example, the "offshore development" of the Indian software industry has become an important means of driving the national economic transformation.

• Latecomer advantages in information technology

The first is the characteristics of informatization:

For developing countries, informatization is easier to catch up than industrialization. This is because informatization has some very significant characteristics: compared with the manufacturing industry, the equipment investment cost is small; the technology has been standardized and the learning cost is low; the knowledge of Shareability and spillovers, etc.

The second is the potential of information technology:

The huge potential and endless opportunities of information technology itself have also opened a broad path for the development of the digital economy in developing countries. The backwardness of information technology and information infrastructure means that the conversion cost of developing countries is small, and it is possible to aim at the frontier of technology to achieve leapfrog development. Because there are a large number of ready-made technologies available, developing countries can shift their research and development focus to original and breakthrough technologies, such as plastic chip technology and biochip technology. Once a breakthrough occurs.

Technological, economic, and industrial patterns are likely to undergo major changes, and it is possible to drive a country's economy to flourish and develop, and even a new industrial revolution may emerge. In the era of the digital economy, the Internet and information technology are a tool, a powerful tool that can improve the efficiency of work in all areas. As long as developing countries are good at learning and making good use of this tool, it can make it a powerful means to reduce the digital divide and the gap between the rich and the poor, improve productivity and comprehensive national strength.