Risks and opportunities in the digital economy

By Feb 28, 2020Uncategorized

Going Global series part 1

The world that we are working in is not the same business world that most people over the age of 40 entered when they first launched their careers. When email and the online world first started being used as a business tool, many could not have foreseen the wide, sweeping changes the digital economy would bring. 

What is the Digital Economy, exactly?

Wikipedia defines the Digital Economy as “… an economy that is based on digital computing technologies, although we increasingly perceive this as conducting business through markets based on the internet and the World Wide Web. The digital economy is also referred to as the Internet Economy, New Economy, or Web Economy.

In other words, it is a new way of doing business that leverages the power of instant global communication to open up new avenues and opportunities for businesses, from micro enterprises to corporations with thousands of employees. Thanks to the digital economy, even a one-person operation can deal internationally with ease, and a myriad opportunities have opened up for everything from education to multinational deals. Of course, it isn’t without risk. Let’s take a look at some of the opportunities, and risks, that businesses who embrace the digital economy are facing.

Opportunities abound

The digital economy offers companies, large and small, the scope to grow their productivity in unprecedented ways. For example, beyond simply having your email on your smartphone, it makes remote work considerably easier. Remote workers report significant improvements in productivity, while the company saves money on office space, equipment, and all the associated costs of having employees on site. Some companies now exist entirely online, without any official bricks-and-mortar offices, instead comprising teams that are spread around the globe, working from their homes, cafés, or other shared spaces – wherever they are comfortable.

The Internet economy has also led to entirely new industries being created. Twenty years ago, it was impossible to imagine that any individual with just a video camera could become an international entertainment giant; today, hundreds of thousands of YouTubers make a living recording themselves doing… well, anything really. Where computer programmers were a rare breed in the early 1990s, they are now not only prevalent, but have the luxury of specialising in any of hundreds of fields. And the rise of accredited, free or highly affordable, online tuition has allowed millions to access learning that was previously unattainable.

But what are the risks?

The greatest risk faced by anyone involved in the digital economy is, of course, security. Some of the world’s biggest and most seemingly secure organisations have fallen prey to hackers; we have all read stories of personal data being stolen or even traded for profit. Individuals and businesses alike have lost billions to unscrupulous operators. Keeping data safe is absolutely critical, but sometimes it seems as though the tide cannot be stemmed.

We mentioned above that the web economy has given rise to new careers and jobs, but the flip side of this is job losses. Digitalisation, automation and disruptive technologies have caused many jobs to become redundant. 

Managing the changes in your business

The best thing any business can do to ensure longevity in a rapidly evolving economy is to be flexible to change. Maintaining relevance in your industry will mean embracing developments and advances – but we advise caution. Evaluate which new technologies will be genuinely useful to your business,and adopt only those that will support your goals. Be flexible with your employees, as well – remote work, for example, may not suit every type of job, but in many cases, can benefit your company greatly, both in terms of cost and productivity.

Research is also vital. Stay up to date with the changes that affect your industry, as well as those of your clients. This will enable you to not only adapt your own business, but to offer solutions, products and services that cater to evolving customer needs. 

Conversely, as a customer yourself, make sure you are dealing with suppliers who are also flexible, who will evolve in parallel to you, and who will ensure their services and products are always current and relevant.

The digital economy is here to stay, and it will continue to evolve and adapt to shifting cultural and global needs. Don’t be left behind – it’s a bright future, and it’s one that can make your business shine.