DIGITAL ECONOMY
“Digital economy is the worldwide network of economic activities, commercial transactions
and professional interactions that are enabled by Information and Communications Technologies
(ICT). It can be succinctly summed up as the economy based on digital technologies”
The term ‘Digital Economy’ first appeared during the 1990s and has evolved since with the
simultaneous evolution of the changing technology, and its usage by businesses and consumers.
In the recent years, the particular definition became centered on the diffusion of techonology,
products, techniques and services across economies. This has come to be known as digitalization.
The advent of digital platforms has had a critical impact on the economics of how business is being
done internationally by reducing the cost of economic interactions.
CONCEPTS OF DIGITAL ECONOMY
Digital Economy (or similar concepts) is not harmonized across governments, businesses,
and international organization. According to OECD, the digital economy can be defined in three
different approaches.
Bottom-up approach:
Characterizing industries’ and firms ‘output or production processes to
decide whether they should be included in the Digital economy.
Top-down or trend-based approach:
First identifying the key trends driving the Digital transformation and then
analyzing the extent to which these are reflected in the real economy.
Flexible or Tiered approach:
Breaking the Digital Economy into core and non-core components, and
thereby finding a compromise between adaptability and the need to arrive at some common ground
on the meaning of term.
The Digital Economy is developing rapidly worldwide. It is the single most important
driver of innovation, competitiveness and growth, and it holds huge potential for entrepreneurs
and small and medium-sized enterprises.
New digital trends such as cloud computing, mobile web services, smart grids, and social
media, are radically changing the business landscape, reshaping the nature of work, the boundaries
of enterprises and the responsibilities of business leaders. These trends enable more than just
technological innovation. They spur innovation in business models, business networking and the
transfer of knowledge and access to international models.
IMPACT OF DIGITAL ECONOMY IN INDIA
Within 2021 itself, in the fourth quarter, there are 825 million Indian internet users
as opposed to the 795.18 million at the start of the year, reflecting an approximate rise of 3.8 per
cent. Indians' contribution to digital products and services has also risen in parallel. In 2020, India
constituted 14 per cent of the total 2018 billion app installations in the world. As a consequence,
India has emerged as one of the biggest and fastest growing digital consumer bases which is
digitalizing faster than many of the more mature economies of the world. While the public sector
in India has been the key catalyst for the country's rapid digitalization with initiatives. Such as
Aadhaar, private sector innovations have also helped in expanding the scope of digital services.
For instance, the strategy of clubbing almost free smartphone devices with service subscriptions
by Reliance Jio led to a huge growth in mobile data access as well as consumption. This rise in
internet penetration and smartphone ownership has shown positive implications with respect to
domestic e-commerce which is expected to reach INR 7 lack crore by the year 2024, almost
doubling by 2027. The grocery and fashion sectors are the main drivers of this digital economic
growth, wherein Indian retail already constitutes the largest industry in the nation, contributing to
more than 10 per cent of the Gross Domestic Product (GDP), and 8 per cent of employment
avenues.
DIGITAL INDIA INITIATIVE
Digital India was launched by the Prime Minister of India Narendra Modi on 1st July
2015, with an objective of connecting rural areas with high-speed Internet networks and improving
digital literacy. The vision of Digital India programme is inclusive growth in areas of electronic
services, products, manufacturing and job opportunities. It is centered on three key areas – digital
infrastructure as a utility to every citizen, governance and services on demand, and digital
empowerment of citizens.
OPPORTUNITIES AND CHALLENGES
Every day people, businesses, organizations, communities and the Government use
digital technology to make decisions, to make goods and to deliver services more efficiently and
more quickly. The digital economy refers to both the digital access of goods and services, and the
use of digital technology to help businesses. Digital economy is a term that is often used to cover
this activity, but is hard to define. The Indian digital economy is not a conventionally marketed
economic activity, and GDP figures do not take account of economic benefits of the digital
economy, such as time saved, increased choice, and lower cost of products. Technology is going
to revolutionize or is already revolutionizing business, transforming virtually all aspects of the
economy and society. The digital economy is the new productivity platform that some experts
regard as the third industrial revolution. Digital revolution, also known as The Internet Economy
or Internet of Everything is expected to generate new market growth opportunities. Digital
economy describes the range of economic and social activities that are enabled by information and
communications technologies. It includes activities like banking, buying and selling, and accessing
education or entertainment using the internet and connected devices. The digital economy is not
separate to the economy. It impacts all industries and business types and influences the way we
interact with each other every day. It also recognizes that as sectors become data driven their
economic structures change, industry boundaries blur, and the basis of competition changes. To
move towards a digital India and achieve a better growing economy
FUTURE SCOPE ABOUT DIGITAL ECONOMY IN INDIA
The pandemic caused havoc to lives around the world. In addition to shifting the global
order, the pandemic has also provided a boost to the ever-expanding digital infrastructure. A
combination of data centers and interconnection services. The pace of change continues to
accelerate as organizations in India and around the world strive to adapt to the “new normal.”
Digital technologies have enabled us to quickly adapt to new ways of working, learning,
connecting with family and friends. And more. Recent months have highlighted the need for a
powerful digital infrastructure that allows companies to cope with shifting customer needs, and to
scale quickly. Accelerate the Digital Economy in India India has ambitious goals to become a $5
trillion economy by 2025, and “Digital India” initiatives are crucial to achieving that target. Six
years later after the Digital India initiative was announced by Prime Minister Modi, India is sharply
accelerating “liftoff” phase of its digital journey. The pandemic showed us that digital connectivity
is critical to business continuity in times of crisis. This brings us to the crux of the issue. The
country needs a much stronger digital infrastructure than what it currently has. Investing in digital
infrastructure is estimated to have a 4x multiplier on GDP. With Covid-19 and the ensuing
decentralization of industries, this figure could be even higher. The pandemic has accelerated
digitalization of the economy, and digital infrastructure is the bedrock of this change.
CONCLUSION:
THE DIGITAL ECONOMY, ITS BUSINESS MODELS, AND ITS KEY FEATURES
The digital economy is the result of transformative process brought by Information and
communication technology (ICT) Because the Digital Economy is increasingly becoming the
economy itself, it would be difficult, if not impossible, to ring-fence the Digital Economy from the
rest of the economy for tax purposes The Digital Economy is in a continues state of evolution and
possible future developments need to be monitored to evaluate their Impact on tax system.
DIGITAL ECONOMY IN INDIA (A CONCEPTUAL ANALYSIS)
AUTHOR NAME: M. FARHANA FARVEEN CO-AUTHOR NAME: R. KEERTHANA
II – MBA – SYSTEMS ELECTIVE II - MBA- HR ELECTIVE
DEPARTMENT OF MBA DEPARTMENT OF MBA
ANNAI COLLEGE OF ARTS & SCIENCE ANNAI COLLEGE OF ARTS & SCIENCE
KOVILACHERI, KUMBAONAM-612 503 KOVILACHERI, KUMBAKONAM-612 503
MOBILE NO: 8525933641 MOBILE NO: 7397012155
ABSTRACT:
The digital economy is the worldwide network of economic activities, commercial
transactions and professional interactions that are enabled by information and communications
technologies (ICT). The digital economy is the new productivity platform that some experts regard
as the third Industrial revolution. Digital revolution, also known as The Internet Economy or
Internet of Everything is expected to generate new market growth opportunities. Digital economy
describes the range of economic and social activities that are enabled by information and
communications Technologies. It includes activities like banking, buying and selling, and
accessing education or Entertainment using the internet and connected devices. The digital
economy is not separate to the economy. It impacts all industries and business types and influences
the way we interact with Each other every day. It also recognizes that as sectors become data
driven their economic structures change, industry boundaries blur, and the basis of competition
changes. India has emerged as one of the biggest and fastest-growing digital consumer bases which
is digitalizing faster than many of the more mature economies of the world. To move towards a
digital India and achieve a better growing economy. Hence, an attempt has been made in this paper
to understand Digital Economy in India - as a campaign where technologies and connectivity will
come together to make an impact on all aspects of Governance and improve the quality of life of
Citizens.
