Overview of digital economy
But what is digital economy really about? Unlike the traditional way, companies connect market participants together in a virtual world – a crude definition of digital economy. The World Economic Forum and the Group of Twenty define digital economy as a wide collection of economic activities that utilize digitized information and knowledge as an essential ingredient in their production, modern information networks as fundamental business space, as well as information and communication technology to propel productivity growth.
When we are talking about digital economy, it is referring to the macro-level, the accumulated activity of all businesses with online presence operating in the same ecosystem – Digitalization as an interface of their revenue production. With that, it is simpler to understand what the benefits of digital economy are to the country, as what benefits of online businesses are to businessmen.
Benefits of digital economy
This will come back to basic, in that a functioning economy is all about efficient allocation of resources used to meet the needs of its citizens and is concerned with the production and consumption of goods and services. The digital landscape simply improves the economy efficiency and effectiveness, by cutting short transaction time for all kinds of economic activities. Interestingly, this has also created a new resource which can be invaluable to businesses and countries – data.
The Trade and Industry Minister Chan Chun Sing in 2017 cited that “The digital age has thrown up a resource – data – that allows Singapore to overcome its geographic and resource limitations”.
On the micro-level aspect, businesses would benefit digital economy as participants in the online market. The list can be inexhaustible, but the key points are:
- Sales and marketing activities will have unlimited coverage and can be accessed 24/7 which will potentially drive business revenue.
- Higher quality resources could be located easily in online market as compared to traditional method
- Possible cost-saving as business with online presence can operate remotely effectively renting less office space.
- Flexible nature of working online remotely could boost morale among business workers.
- Online purchases make it easier for data collection and analysis, which in turn could be a great asset to companies for the purpose of relationship management, estimating demand and supply, branding, and financial forecast.
Seeing the benefits digital economy could offer, for many businesses, it is a solid argument for going digital. Yet the concerns are in the feasibility of regulations placed to sustain trade in this unlimited, fast-paced environment.
Few concerns arise:
- Can businesses reap the benefits of digital economy with a high degree of confidence knowing that their rights and safety will be protected?
- How well is the data protected against loss & theft?
- Is there any legal establishment in digital economy Singapore?
There is various effort made by countries to spur economic ties effectively increase values exchanging hand between economies. Particularly, here in Singapore, treaties were concluded to enforce digital trade rules and digital economy between two or more member countries. Known as Digital Economy Agreements, the Singaporean government aims to further develop a network of free trade agreements and digital cooperation among member countries.