Since the early stages of digitalization, we have come across many new terms such as digital transformation, digital technology, digital art and digital economy etc. The rapid advances in technological developments make it difficult to conceptualize the new terms and the definitions stay back the developments. The concept of digital economy is one of them. The inability of the definition or a narrow definition affects the scope of the studies to be carried out on the concept. For example, only the technology-oriented definition can make other elements insignificant. Or, it leads to uncertainty about how to determine and measure the value of the digital economy. Therefore, it is necessary to make definitions dynamic and it’s scope needs to be expanded with the technological developments.
Since the mid-1990s, the concept of digital economy has been gaining a new meaning like many new concepts. In the beginning, the digital economy was defined as a concept expressing of technological change and using of technology by producers and consumers. In the late 1990s, the economic effects of digitalization; impacts on trade and employment of digitalization were discussed by the development of the internet. With the widespread use of the internet, the internet economy developed and definitions included both the use of information and communication technologies and digital companies, products and services. Organizations such as OECD and UNCTAD have begun to produce more detailed reports on the digital economy. In the last few years, the concept of digital economy has been included in digital techniques and skills and researches focus on digitalization and digital transformation.
Digitalization has become more important, especially for developing countries. With the use of technology, traditional sectors developed and many sectors (agriculture, tourism and transportation) in developing countries started to benefit from digital opportunities. With the leverage of digitalization, developing countries have made faster progress. Small firms export and they promote their products at a lower cost abroad and reach more remote areas. Moreover, digitalization increases employment opportunities, and even if some traditional jobs are lost, new professions, new jobs are opening. Creativity is growing and works that have never been thought before are creating. Taxi service is offered without a taxi owner, food service is provided without a restaurant owner, or hotel rooms are rented without a hotel owner.
As a result, the scope of the digital economy has expanded and conceptualization has gradually gained weight in the technological direction. Many topics such as robots, internet of things, cloud computing, digital platforms are included in the definition of digital economy. Thus, the digital economy has become a concept that includes both technology-related elements and economic-related elements. The study of Bukth and Heeks (2017) is very important in defining the digital economy in terms of both technical and economic aspects, and sheds light on the studies to be done on this subject. In this study, the concept of digital economy is explained from the core definition to narrow and wide definition. In the core definition, the digital economy includes hardware, software, IT consultancy, information services and telecommunications, while the narrow definition includes the core elements, digital services, platform economy, sharing economy and gig economy. The broader definition includes core and narrow scope elements as well as e-business, e-commerce, industry 4.0, algorithmic economics and precision agriculture. Thus, the digital economy emerges as a concept that constantly improves its meaning with its content ranging from core IT activities to wider activities. The developments of digitalization and technological progress make the conceptualization dynamic and create the need for new definitions.
Reference
Bukth, R. & R Heeks, Defining, Conceptualising and Measuring the Digital Economy, Working Paper Series, Paper No. 68. 2017.
UNCTAD, Digital Economy Report, 2019.