Even if most people don’t realize it, our lives are becoming digital every day, and this affects not only individuals but also economies. For example, the sites you go to play casino slots online are almost entirely digital ventures: most casino Canada sites do not have a physical presence other than servers. This is not a change that can be stopped: the digitization of the economy will continue at an accelerating pace. So, will this be good or bad? There are experts who advocate both. We leave the decision to you by listing the views on the digitalization of the economy below.
Digitalization of the Economy Is Good Because…
We reach everything we are looking for easier and faster. The digitalization of the economy, above all, provides ease of access to information. You can find detailed information, read user reviews and even compare prices for a particular product in a matter of seconds. This leads to the emergence of a much more dynamic and consumer-friendly economy.
We can save time. It is possible to have everything we need without leaving home: we no longer have to go to the shops. All we have to do is order something, and it will be delivered to our home in a short time.
We are able to get lower prices. In a world where purchasing is almost entirely online, businesses can also reduce their expenses by changing their models (for example, by investing in warehousing and delivery instead of in-store). In the long run, this results in price drops, and low prices keep the economy alive.
Each product can be personalized. The product types in a traditional store are standard, and you have no choice but to choose from them. Whereas, in digital shops, with the help of technologies such as 3D printers, you can obtain a product that is completely tailored to you: each product can be customized to your wishes and needs.
New companies grow more easily. In traditional economies, the growth rate of a new company is very low, and it is almost impossible to compete. There are huge companies that already offer that product, and a new brand hardly stands out among them. However, by using the internet, every new company gets a chance to compete and can even challenge global giants with the right strategies.
New business areas are emerging. New business areas that cannot be implemented or even imagined in traditional economies are possible in digital economies. The AirBNB business model, for example, might only be possible in a digital economy: the traditional hospitality industry cannot offer such a model.
Digitalization of the Economy Is Bad Because…
It is not possible to eliminate monopolies. A digital economy gives new companies a chance to compete, yes, but in practice, monopolies still arise. For example, if you are selling something online, you have to open a store on Amazon: if you open your own website and online store, you will have very few customers. The digital economy forces startups to become part of the monopoly of Amazon, Facebook and Google. In the long run, it looks like these monopolies, not governments, will control the digital economy.
Privacy issues arise. The fact that the economy is completely digital obliges us to share our personal information online. Our email address, phone number, home address, credit card information, etc. All of these and more we have shared with multiple websites to date. This is a privacy issue in itself: it is now almost impossible for us to buy anything without sharing our personal information.
New business models are not always good. The digital economy virtually ignores traditional labor laws. Uber and Deliveroo drivers, for example, are hired through a contract type called “zero-hour”. These contracts allow companies to save more and offer flexible working hours, but they have no employee protection (e.g., sick pay). In this business model, since employees almost never come together, it is not possible for them to unionize. Companies can renew their entire staff within 24 hours because finding freelancers is both easier and less costly. The digital economy is not very employee-friendly in terms of legal rights.
The digital economy is not environmentally friendly. A digital economy requires huge data centers. These centers use a lot of electricity and produce CO2. For example, 1% of all electricity produced in the world goes to data centers. This figure keeps increasing every day. The dynamic digital economy also creates a throw-away culture: we quickly replace the things we buy with new ones and throw the old ones away. Therefore, more waste is generated.