The digital economy refers to the global economic activity, commercial transactions, and professional relationships facilitated by information and communication technologies (ICT). It is the economy built on digital technologies, to put it.
The rise of Amazon, Uber, and Airbnb is the best example of this platform. In a virtual environment, these companies bring market participants together. They show the best deals and create new forms of trust amongst strangers.
In addition, new technologies such as 3D printing augmented and virtual reality, sensors, artificial intelligence, quantum computing, and robotics could disrupt nearly any business. Therefore, the competitiveness of countries in these technologies will determine their economic prosperity in the coming decades.
The Digital Economy Report 2021 examines cross-border digital data flows’ evolution and policy consequences. According to research by the China Academy of Information and Communications Technology, the digital economy in China reached $5.4 trillion last year, ranking second worldwide behind the United States.
Germany came in third place, followed by Japan and the UK. According to the white paper, the digital economy market size in the 47 nations and regions surveyed will reach $32.6 trillion in 2021, up 3% yearly.
The COVID-19 epidemic has demonstrated that digital technologies influence whether a country thrives and how successfully it navigates difficult times.
When used efficiently, digital technologies allow education and labor to move from schools and workplaces to the home. Still, they also give companies and governments more efficient ways to organize procedures.
Below is a list of the top 10 countries in the digital economy
1. United States of America
The US leads the world in scale of the digital economy, whereas China has the quickest rate of development. The United States is the most digitally competitive country globally.
According to a white paper released on Monday by the China Academy of Information and Communications Technology, the US digital economy will continue to lead the world, with a value of $13.6 trillion in 2021.
Although the digital economy accounts for 8% of US GDP, it accounts for 86% of labor productivity growth. In addition, the United States was named as the world’s most digitally competitive country.
The goal of digital competitiveness rankings is to assess a country’s ability to adapt and deploy digital technology within businesses and government agencies.
China will come in second with a value of $5.4 trillion. In addition, the country’s digital economy grew to 39.2 trillion yuan accounting for 38.6% of GDP.
In the epidemic and downward pressure on the global economy, China’s digital economy has become a stabilizing force and a vital engine of economic growth.
China’s digital innovation — an ever-growing and economy-wide infrastructure – was utilized to generate new growth through new business models amid the pandemic, from online commerce to online education and entertainment.
According to CAICT, China’s digital economy accounted for approximately 40% of the country’s GDP in 2020, up 2.4 percentage points from 2019. Another indicator of China’s burgeoning digital economy is that, despite being struck by COVID-19, Chinese internet enterprises saw revenue rise throughout the outbreak.
According to the data, income at big Chinese internet enterprises climbed by 14.9 percent to 691.6 billion yuan from January to July.
Germany comes third in the row with a digital economy of $2.54 trillion. In 2021, eCommerce-Electronics & Media will have a revenue share of 21.2 percent. Germans use the Internet at a higher rate than the rest of the world, and their digital abilities are improving rapidly.
As a result, German citizens and businesses are actively pursuing eCommerce potential. But, on the other hand, Germans are hesitant to sign up for high-speed Internet.
The German chemical and pharmaceutical behemoth stated that it would continue to draw on its experience in China and its global innovation resources to satisfy the country’s growing and changing healthcare and food supply needs.
Japan’s digital economy ranked fourth in the world with $2.48 trillion. It includes a world-class education system, industrial and automotive manufacturing leadership, high-quality infrastructure, and professional culture with work ethic and repeatable methods for producing high-quality goods and services.
On the other hand, Japan’s productivity has gone from stagnating to dropping; it must be reversed soon if the country is to remain globally competitive. Moreover, only five of the 500 unicorn start-ups with a private or public valuation have been born in the country. These figures do not reflect Japan’s true potential.
Japan’s economy is a well-developed free-market economy. It has the world’s third-largest nominal GDP and fourth-largest purchasing power parity (PPP). It is the second-largest developed economy on the planet.
5. United Kingdom
The United Kingdom ranked fifth with a digital economy of $1.79 trillion. The British digital economy is a highly developed social and market-oriented economy.
It has the world’s fifth-largest nominal gross domestic product (GDP), tenth-largest purchasing power parity PPP, and twenty-first-largest GDP per capita economies, accounting for 3.3 percent of global GDP.
In 2019, the largest sub-sector of the digital industry contribution to the economy in the UK – computer programming, consultancy, and associated activities – had over 167 thousand enterprises. The British digital economy is a highly developed social and market-oriented economy.
With a digital economy of $1.19 trillion, France is in the sixth position. France is ready to develop and reap the benefits of the new digital economy’s tremendous opportunities. In 2019, 77% of French people had a smartphone, and 76% had laptops.
Indeed, 40 million French e-consumers spent €103.4 billion online in 2019, an increase of 11.6 percent from the previous year. From scientific research to R&D spending, the French government has launched an investment program dedicated to innovation.
It’s a $13 billion (€11 billion) investment plan that spans a lot of ground. However, over $1 billion (€800 million) will be allocated to public funding for French companies during the next few years.
7. South Korea
South Korea has a digital economy of $847.8 billion. It comes after France, and South Korean start-ups become increasingly interested in Southeast Asia in the seventh position. South Korea has been a pioneer in 5G technology.
It was the first country to introduce 5G, and it has the best coverage in the world. LG Uplus used Huawei equipment in its 5G network. Still, South Korea has avoided relying on Huawei as it expands its network instead of relying on Samsung, one of the world’s leading 5G equipment manufacturers.
The South Korean government intends to expand its lead with the Digital New Deal. South Korea’s proposed third supplementary budget allocates 50 billion won ($41 million) to the government’s 5G infrastructure and cloud computing and 660 billion won ($541 million) to encourage the industrial convergence of 5G and AI.
The digital economy of India is $514.9 billion. In the fourth quarter of 2021, there will be 825 million Indian internet users, up from 795.18 million at the beginning of the year, representing a 3.8 percent increase.
The contribution of Indians to digital products and services has risen in lockstep. India accounted for 14% of the total 2018 billion app installations worldwide in 2020. As a result, India has emerged as one of the world’s largest and fastest-growing digital consumer markets, with a rate of digitalization that outpaces many of the world’s more developed economies.
While the Indian government has been the driving force behind the country’s rapid digitalization through initiatives like Aadhaar, private sector innovations have also contributed to expanding the scope of digital services.
Canada has a digital economy of $436.5 billion. However, the number of people employed in Canada’s digital economy fell to just over 2 million in the first quarter of 2021. One of Canada’s most powerful economic engines in the digital economy.
The digital economy grew almost 40% faster than the broader economy during the last decade, creating nearly four times as many jobs. The Canadian government is investing more than $20 million in clean technology, the digital economy, health sciences, and value-added agriculture.
Between 2018 and 2020, Canada advanced the most in its relative digital competitiveness within the G7, making it our top Digital Riser; on the other hand, Japan and Germany decreased the most within the G7.
The Italian government has taken a more proactive approach in recent years to provide patient funding for innovation and technology development and strengthen research and technology transfer. As a result, Italy is in the tenth position with a digital economy of $377.5 billion.
In 2021, the Ministry of Economic Development introduced the first national fund dedicated to technology transfer and scientific research centers, the Italian Institute of Technology and the National Innovation Fund.
ENEA Tech, a new foundation, has been formed to manage a €500 million fund for global investments in innovative technologies of strategic national interest.
The purpose is to use technology transfer to expand Italian industry and reinforce supply chains, with the ultimate goal of resuming growth, improving opportunities for Italian youth, and developing solutions that benefit the environment and society.
In a digital economy, businesses can take a step in the retail process by sending customized goods directly from the factory to people’s homes instead of going via stores. As a result, there are fewer costs and a lower price.
Cloud computing, mobile web services, smart grids, and social media are just a few of the new and emerging digital trends that are transforming the corporate landscape, reshaping the nature of employment and the boundaries and responsibilities of businesses. These tendencies go beyond technological advancements.
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