The impact of digital economy on international trade (PPUE2021)

Considering both the societal and economic implications of digitization on international trade is an important step towards the understanding of the opportunities and risks it provides to all stakeholders involved. Revolutions in natural resources have encouraged a method of wealth creation and social-economic development beyond the traditional methods of production. Over the years, digitization was applied beyond binary systems, developing into more complex information such as graphs and photographs. Information was outdated and analog in the old economy as people communicated by physical means like sending letters and moving from one place to another. Daily business operations were run in material ways. However, in the new economy, the digital economy, everything is modernized. This has led to the digital disruption of value chains by eliminating intermediaries in economic activities such as the middlemen, agents, brokers, and wholesalers. Online platforms and marketplaces have replaced this function as communication is facilitated between buyers and suppliers at reduced costs. As a result, companies obtain real-time data about their customer base and can meet their needs with more predictability. The digital economy demands, therefore, that companies continuously bring changes to new or existing products to accompany the rhythm of innovation. The old economy was reliant on raw materials, productivity levels, cost of operations and labor. However, the new economy demands that creativity and human imagination are placed at the center of a company’s priorities. With knowledge-based capital becoming the key resource in the digital economy, the production shifts to the creative minds of knowledge workers who create value in business. This comes in the form of adopting a more horizontal hierarchical structure so that information can flow easily across the organization and be transferred into knowledge. Establishing a network of individuals who can openly collaborate fosters motivation and wellbeing, leading to the ...