Over the last few years, we have seen many industries begin to thrive towards digitalization. However, recent developments, aided by the coronavirus, have prompted major banking firms such as Mastercard and a worldwide study of evolution and trust to investigate the merits of transitioning to a digital economy. This, however, raises some suspicions. What exactly is a "Digital Economy"? Is an economic revolution on the horizon? How will the banking industry evolve as a result of digitalization? What, exactly, is Digital Trust and Evolution? How would a global survey help us better comprehend digitalisation? This article will look at why a Digital Economy needs to become more trustworthy and resistant.
What is a Digital Economy?
A Digital Economy, also known as the Internet economy, new economy, or Web economy, is an economy that is heavily reliant on digital technology, such as digital communications networks (Internet, electronic mail, computers, software, and other associated information technologies). In other terms, the phrase "digital economy" refers to the merger of computing and communication technologies via the Internet, as well as the resultant flow of information and technology that is boosting e-commerce and driving significant organizational changes.
Is A Digital Economy the start of an Economic Revolution?
The digital economy has triggered an economic revolution, as shown by extraordinary economic development and the longest period of uninterrupted economic expansion in history; notably in the United States. As a result, we have witnessed a shift in banking toward digitization, as well as the development of Digital Trust and Evolution.
How did the University Graduate School of Global Affairs fight for a Digital Economy?
In collaboration with Mastercard, Fletcher, Tufts University's Graduate School of Global Affairs announced the Digital Intelligence Index. This tracks nations' progress in developing their digital economy, promoting trust, and integrating connection into the lives of billions.
Building on previous editions in 2014 and 2017, this year's index provides a visual representation of global digital economy expansion, which reflects light on major drivers of change and momentum, and transmits what this means for nations dealing with global pandemics and post-pandemic issues.
“The pandemic may be the cleanest test of the world's progress toward digitalization,” said Bhaskar Chakravorti, Dean of Global Business at Fletcher. "We now have a better understanding of how dynamic digital economies may contribute to economic resiliency at a period of unprecedented global instability, and how they can be positioned for recovery and change".
A Global Perspective on Digital Evolution and Trust
This year's ranking examines two factors: digital evolution and digital trust. The term "Digital Evolution" refers to the historical progression of an economy from the physical past to the digital present. Digital Trust is the link between the digital present and an enlightened and inclusive digital future.
The Digital Evolution scorecard tracks 95 percent of the world's online population to analyze the necessities for a digital economy. It draws on 12 years of data, analyses 160 variables in 90 economies across four main pillars: institutional environment, demand circumstances, supply conditions, the capacity for innovation, and change.
These segments are classified into four categories:
- Stand Out Digital Economies – Singapore, the United States, Hong Kong, South Korea, Taiwan, Germany, Estonia, the United Arab Emirates, Israel, the Czech Republic, Malaysia, Lithuania, and Qatar are digitally advanced and gaining pace. They are innovators who leverage their current advantages in efficient and productive ways.
- Stall Out Economies - such as Sweden, the United Kingdom, the Netherlands, Japan, and Canada, these nations are maturing into a digital economy as a result of their high levels of digital adoption but declining digital pace. They usually trade-off speed for sustainability and are focused on increasing digital inclusion and constructing strong institutions.
- Breakout economies - Like China, India, Indonesia, Poland, and Russia which are quickly developing. With such velocity and tremendous opportunity for growth, they are frequently quite appealing to investors.
- Watch out economies - These include Nigeria, Uganda, Colombia, Peru, Pakistan, and Sri Lanka are among the countries with infrastructural deficits. Despite this, young people are enthusiastic about a digital future, as seen by the growing usage of social media and mobile payments.
Thus, Digital Trust's digital economy scorecard examined 198 factors across four key pillars in 42 of the index's economies: behavior, attitudes, environment, and experience.
To sum up, I believe we are getting closer to the eventual digital economy, and why should we reject it when we can embrace it. A digital economy has several advantages; for example, the online web communication networks enable the formation of a global society that feels more unified and open to everyone, wherever. It also assists companies by imposing much easier advertising tactics, which help reach consumers simpler and more efficiently. It helps banking customers better understand how digital economies may aid economic resilience during a period of unprecedented global instability. Finally, the Global Perspective promoted the production of digital trust and evolution by analyzing 160 factors in 90 economies, providing a reliable statistic of how various economies react to digitalization.
