Rise of Digital Economy

Accelerating the Rise of Digital Economy; Thanks to Pandemic Blues

If "necessity is the mother of invention," coronavirus (COVID-19) compelled many around the world to reconsider our everyday lives from work to school to entertainment. In reaction to travel bans, school closures, and warnings to not meet in large groups and maintain our distance from fellow humans to restrict the spread of the virus, many people turned to digital tools to keep some sense of normality. In order to function efficiently it was necessary to digitally transform our places of work and education. Companies used technology to reconsider their future business model through rapid digital transformation.

For most of the things relating to small enterprises, Covid-19 has improved the situation. And now Micro and Small Enterprises (MSEs) turned to digital platforms to easily monitor their sales recovery. The adoption of digital platforms, including internet aggregators or markets, social media and mobile marketing have risen from 29% before Covid in the time of revenue generation to 53% for small companies. Pandemic gave the small businesses a "big digital shift" in revenue.

Data also indicates that ‘micro’ companies in digital adoption are not far from ‘small’ companies. Furthermore, several others now suggest that they will soon pursue the digital path. The growth in digitalization is helping to exploit new markets and increase the footprint of SMEs.

Digitalisation is all about the future of the global economy. The global economy is going to be significantly changed by the emergence of advance technology such as blockchain, IoT, 5G, cloud computing, robotics, IA, data science and modern digital business models. In most regions of the world, SMEs are the backbone of economic growth.

SMEs should use new technology and enable digitisation in the face of changes. You can also learn from influential companies in the fields of multistakeholder trade, sharing economies, IoT, creativity, NextGen, and other emerging business modelling. The lack of capital and of expertise in introducing new technology should also overcome small and medium-sized businesses that will enable them to thrive and reach a broader market.

A few Companies that took bigger steps towards digital: 

Volkswagen: German automaker Volkswagen (VW) will invest $4 billion by 2025 to reinforce its digital ecosystem. The massive investment won’t just enable Volkswagen to appeal to consumers as the auto industry undergoes a digital transformation, it will also help the firm take on competitors who are launching comparable strategies. As a result of the investments, from 2020 onwards, five million new Volkswagen brand vehicles per year will be connected to the Internet of Things.

Domino’s Pizza: Listening to client-feedback and embracing digital, permitted Domino’s to be crowned the largest pizza company in the world and to finally pass its old rival Pizza Hut. Therefore, there is no surprise that today four-fifths of Domino’s sales come from digital channels. To arrive where they are today, Domino’s changed the company’s entire ethos, transforming it from a fast food business into a company imbued with programming hires, digital marketers, and other tech personnel. The entire corporate structure was also revised and the focus shifted towards digital sales and advertising.

Starbucks: Starbucks’ digital strategy, and its innovative use of data analytics, in particular, remain at the forefront of its growth and continue to pay off. With 90 million transactions a week in 25,000 stores worldwide the coffee giant is in many ways on the cutting edge of using big data and artificial intelligence to help direct marketing, sales and business decisions.

IKEA: Swedish furniture giant is also taking steps to stay relevant and competitive in the future. By providing innovative and highly valuable experiences for both online and offline customers, IKEA has taken the first steps on the path of transforming into a tech company.

LEGO: Through movies, mobile applications and mobile games, LEGO has managed to appeal to today’s digitally savvy consumer groups. An updated digital strategy helped the company to escape the brink of bankruptcy and to start to thrive. By now, it has achieved many content marketing triumphs that most other brands would kill for and a social strategy that puts the majority of its focus on community engagement. Currently in digital space, Lego has created a community, Crowdsourcing design, bridged the gap between the physical and digital worlds, incorporated coding, entering video game industry etc.

In addition to improving their productivity, digitalization by SMEs would also benefit society. SMEs' digitization also plays a crucial role in creating a sustainable and inclusive economy, as the key engine of regional economic development and innovation. In recent years, digital solutions have significantly contributed to the sustainable development goals and reduced income disparities, increased equality between men and women and reacted to climate change, giving people access to the tools needed to survive. Digitalization is also a product of government changes and the effects on digitalization patterns of its policies as the world begins to digitize.