Smarter economic measurements would also boost confidence in the market, facilitating growth as we gain a better understanding of what, specifically, is growing. To achieve those results, however, we must first treat the challenges outlined here with the respect and urgency they deserve. Without a structure to measure similar technological impact, businesses and other invested organizations can never be sure about the state of the digital economy and its economic impact. The Progressive Policy Instiute hosted an event with The Lisbon Council last Friday aimed at finding ways to grow the transatlantic digital economy. With both sides of the Atlantic, particularly Europe, facing a slow economic recovery and even the prospect of secular stagnation, a thriving digital economy and transatlantic trade can spur much-needed growth and job creation.
For start-ups seeking VC funding in the present era, the answer should almost always be yes, granting, of course, that it will take time to attract a meaningful volume of data, not to mention to develop the algorithms that can make sense of it in real time. That said, the industrial model is losing power to an emerging digital economy at an astounding rate. This is most obviously reflected in the public stock markets where companies with digital business models are being valued at premiums that dwarf those applied to even the most successful industrial enterprises in the same category. It is also seen in the shift in capital expenditures within the industrial economy to fund the digital transformations that every constituency is demanding of every member in the value chain. And indeed, the whole idea of the value chain itself is being undermined by a new model of power that does not operate according to the old models.
Digital price deflation is another manifestation of how the digital economy is providing an underestimated boost to productivity and economic growth. Whereas prices in traditional sectors of the economy have tended to increase in recent decades, prices in the digital sector have unrelentingly declined. In 2017, the price deflator for the overall economy increased by 1. 9% year over year, while that of the digital economy declined by 2. 2%. Just as the future of work can seem upsetting to many people, so the world of fintech can appear to be focused on the needs of the privileged. The Economic Security Impact Accelerator will show how emerging technology can make working lives better and highlight how so many of today’s innovators can be both commercially and socially successful. This project is around supporting the companies that can help build the economy that we want to live in, not just the ones with the biggest potential profits. The idea is to support and scale up a cohort of initiatives, chosen from the Future Work Awards applicants, that has the potential to address the economic insecurity that will be borne by the most vulnerable of citizens, through technology and social innovation.
With increased customer participation, companies are engaging customers in transparent commercialization. But all this does not change the fact that the power base that underlies the global economy has shifted. And that means, the critical strategy questions that all companies need to answer have shifted along with it.
In this context, the number one question every company should be asking is, Do we have access to signal? That is, do we have a viable means by which we can secure proprietary access to signal-bearing data that, if properly analyzed in a timely manner, would enable better economic decision-making in our ecosystem?
We should not deprioritize the fastest-growing sector of the economy just because measuring it might be inconvenient. Accurate data on digital economics empowers stakeholders of all stripes to make better decisions.
Enterprises will also need to operate well as a digital services provider in the digital economy. As the current decade comes to an end, the digital economy is approaching a critical tipping point. By 2023, the global economy will finally reach “digital supremacy” with more than half of all GDP worldwide driven by products and services from digitally transformed enterprises, IDC predicts. This paper reviews international measures of the digital economy and compares them with those developed by Chinese officials and private sources. Given the lack of comparability, we use China’s input and output and census data to come up with an internationally comparable estimate of the size of China’s information and communication technology sector, in terms of both value added and employment.
As a result, companies that have embraced the digital economy have outperformed compared to the rest of the market according to the Index. The digitalization of the economy has led more companies to adopt virtual operations, disrupting traditional means of consumption and income taxation. Applying analytics to digitized products and services makes the digital economy effective, customizable, relevant and smart. It is especially pleasing to see electronic payments (2. 7) directly added to the DEPA frameworks.
The rise of influential Chinese digital giants, including Baidu, Alibaba, Tencent and Xiaomi has shown the world that China is a global leader in digital innovation and it is not surprising that China has started to influence the global digital market. To answer this question, the authors assess how big China’s digital economy is relative to the rest of its economy, and how China performs compared to the rest of the world. Building a digital economy involves both business and investment attraction and growing local capability, aka “economic gardening”. It demands action by a wide range of stakeholders, led in collaborative activity by economic development agents and agencies.