THE KEY DRIVERS OF DIGITAL TRANSFORMATION OF THE ECONOMY

Abstract

The article explores the nature of digital transformation as a new economic phenomenon that drives the transition from the traditional economy to a digital one, based on electronic infrastructure, e-business, e-commerce, electronic money, and e-government. The study identifies the key modern technologies that spur digital transformation of the economy, in particular, smart-technology, the Internet of things, industrial Internet of things, big data analytics and artificial intelligence, as well as specifies the three major digital transformation factors that affect the economy and the society, i. e. scale, scope, and speed; ownership, assets and economic value; relationships, markets and ecosystems. The latter shape the basic properties of digital transformation, in particular, changes in scale, scope, and speed result from the conversion of information into digital bits that can be processed and analysed by computers or smartphones. Over the last 50 years, the digitization of information has become exponentially cheaper and faster that affected the nature of assets generating value. In turn, these changes have significant impact upon the structure and operation of digital-based markets and thus create new ecosystems of supply, demand, and exchange. Digital transformation is a unique phenomenon by its speed and scale. Apart from the above, it also challenges traditional thinking on the most effective pattern of economic and social activities arrangement. The Internet and online public platforms enable a wide range of networking activities that serve the common good and public interests. Markets take on new scope, scale, and boom as well as non-market transactions and person-to-person interactions.