Digital transformation of the global economy

Abstract. This article presents a systematization of the original concepts of the digital economy (CE) - from the «pioneers» presented in the 1990s. foreign scientists, to the modern theoretical developments proposed by domestic economists, which can be laid in the basis of management theories. The interpretation of the digital economy as a phenomenon of the neoeconomy is revealed, as well as the difference between the CE and its concept from the electronic, web, Internet economies and their theoretical interpretations.

The article also discusses various approaches to the definition of “digital economy” in the scientific and business environment, the factors and forms of its development in different countries, taking into account the specifics of the modern stage of the global economy, which is especially important in the context of searching for new sources of economic growth of the world economy .

Digitalization, digital transformation - this trend has already been rigidly attached to the programs of the major panel discussions at economic forums and specialist conferences. Assuredly, sometimes it is inferior to the blockchain, but in fact today it is a more important fundamental topic for business development. The potential of this market is immense. Today, according to our estimates, more than 60% of the world’s largest corporations are already working on their digital transformation strategy. In addition, over the past year we have received a huge increase in the number of requests among Russian companies.

Business in Kazakhstan traditionally leans toward high technologies and breakthrough strategies, but so far this is being implemented only on a small scale. Many people are confused by the terminology, perceiving digital transformation as “the knowledge of which technology or service shall replace a specific business process in a company” - we call this approach “patchwork automation”.

Most interesting is that the modern consumer is the main driver of change - business is changing under the influence of new factors. That is why digital transformation is not a service provided by consulting companies, but an inevitable process that global business faces, adapting to new conditions and preferences of the digital economy society.

The modernization of traditional manufacturing and service industries, the organization of trading and procurement procedures, related financial and logistic operations, the change in the consumption structure against the background of the penetration of information technologies and the digitalization of economic processes creates the basis for the formation of new markets and new conditions for the operation of the market, as well as new approaches to analytics, forecasting and management decision-making. Big Data, formed as a result of the modernization of the economy along with the technologies for their analysis, is becoming one of the leading assets of the state, business and civil society. At the same time, the absence of physical boundaries in the digital space opens access to a significant array of such data to numerous participants in the global economic space. The development of national programs for the development of a new generation economy, including the development and implementation of technologies, the analysis of Big Data and forecasting, the introduction of new management methods, has become of strategic importance not only in the context of the socio-economic well-being of states, but also as a condition for maintaining sovereignty against the globalization and implementation of digital development programs by other participants in the global market.

Since the new economy sees the key factors in economic activity to be electronic technologies and services, as well as digital, voluminous, multidisciplinary data, the processing and analysis of which can significantly increase the efficiency and quality in the production and consumption of goods, works and services, as well as in management procedures, those countries whose economy is based on the most advanced electronic technologies and services, including Big Data analysis technologies and forecasting technologies, have a competitive advantage.

In this regard, the national program for the digital economy development aims to formulate development directions for the formation and maintenance of the most favorable organizational, infrastructural and regulatory characteristics of the digital jurisdiction for business development in the new economic structure, as well as the accelerated development of national institutions of the digital economy.

Research methods

The ICT sectors, as the basis of the so- called new economy, lay the groundwork for the emergence of new sources of growth due to the increasing benefit from the scale of production, processing and transmission of information, overflow effect and network external effects. They distinguish the new economy from the industrial one.

In the broad sense of the word, new economics is interpreted in theoretical and methodological approaches developed by W.D. Nordhaus, O. Gärdin, as well as S.D. Oliner and D.E. Sichel.

In his studies, W.D. Nordhaus includes the collection, processing, transformation and dissemination of information in the term New Economy; the key components of The New Economy, according to Nordhaus, include the hardware used for processing information, communication systems performing collection and dissemination of information, as well as software combined with human knowledge and skills used in the management of these systems [7].

According to the Swedish economist O. Gärdin, the New Economy has the following key characteristics: digitization and intensification of the use of ICT; conversion of information into a product; streamlining information; development of new ways of organizing labor and production processes [3].

S.D. Oliner and D.E. Sichel regard the concept of the New Economy more broadly to include not only industries directly related to ICT, but also those industries that use ICT in their business activities and accept the criteria of the parties as part of the electronic trade as a “divide” between manufacturers and users [8].

One of the first concepts of the Internet Economy was developed in the late 90’s of the 20th century by the American economists J.K. MacKie-Mason and H. Varian [6], as well as L.W. McKnight and J.P. Bailey [5].

The Internet Economy was considered by them to be the economy of Internet services. In turn, Internet services included services for providing access to the Internet and Usenet (as a network for exchanging messages and publishing files), server rental services, web hosting, as well as services for collecting, storing and providing access to information resources.

At the same time, H. Varian and C. Shapiro paid special attention in their joint work to the category of “information good”, by which scientists meant any good that can be digitized, so that it can be copied, shared, leased or resold for income, while increasing profits, and indicated the following: the value of the cost of sharing is less than the marginal cost of production of a given good; a relatively small number of content views combined with low sharing costs; in the market where access to a good is provided, there is the possibility of segmenting consumers (users) [9].

Economists characterize information goods as goods with relatively high fixed costs of production and low marginal costs of recreation, while their value is inherent in the increasing economy of scale. Information can be a private or public good, and information goods in the broadest sense have the properties of non-competitiveness, and some of them are non-exclusive.

In turn, in the 2000s the economist F. Khan proposed his own interpretation of the Internet Economy, while noting that this term is meaningfully close to the Network Economy and Digital Economy.

He considered the Internet Economy as a sector of the economy based on Internet and network technologies, as well as computer and network hardware. It is worth noting that the model proposed by Khan is multilayered and, in addition to the basis, highlights the layer of network applications that support the user interface and content distribution; subsequent layers, including among other things business applications and network applications designed for communications, ensuring cybersecurity, as well as payment systems and custom applications.

The above approach makes it possible to judge the economic effect of the sector by such data as, for example, statistics on online sales from the retail sector.

In addition, F. Khan connects the Internet economy, on the one hand, with such information goods as high-tech goods, software and online content, and on the other hand, with the media sectors and industries providing information technologies that operate separately from the industries of the industrial economy. According to this researcher, the economic effect in the framework of the Internet economy is reflected in the quantitative indicators of production, investment, and employment in this sector. Paying attention to the problem of attributing a particular type of economic activity to the Internet or industrial economy, F. Khan offers a clarifying term - Smart Economy - a sector of the economy in which the process of creating value by economic agents is radically changing [4].

Scientists S.S. Cohen, J.B. DeLong, J. Zysman introduced the concept of E-conomy. According to the authors, the term Network Economy is too narrow to cover all the changes that are taking place with the industrial economy. Throughout the history of economics, innovation has always been a driving force for economic development, therefore, according to the authors, the concept of Innovative Economy is also unsuitable to describe the transformations of the beginning of the 21st century. On the contrary, the term New Economy is too broad; the researchers ascribe this term many diverse meanings.

As a result of the analysis of theoretical developments by S.S. Cohen, J.B. DeLong, J. Zysman, we have concluded that the concept proposed by this team of authors is closest to the concept of Electronic Economy and is regarded as the result of a structural change, expressed in the simultaneous transformation and destruction of the industrial economy, affecting it through ICT as the main driving force of economic development, which influences the formation of the goods of a new type, new strategies for the development of innovations. In addition, the researchers define the term they propose as the Economy of Ideas, emphasizing that ICTs expand the ability to access data [2].

The concept proposed by L. Budd [1] implies that the digital economy is a subsystem of the new economy in which the production, exchange and distribution of goods and services is carried out entirely through ICT infrastructure and is based entirely on its distribution capabilities.

The network economy as an economy associated with the production and distribution of network goods is presented in the concept of the domestic economist I.A. Strelets. Strelets defines network goods as goods that possess such properties as significant economy of scale, complementarity, the presence of network external effects, as well as the “lock-in effect”.

According to Strelets, an economy of scale manifests itself in the predominance in the cost of creating these goods over the costs of their further reproduction (copying); Complementarity means that this good can only be used together with other goods (for example, a video card is used with a computer); The use of the network by a new user increases its usefulness for existing network participants, which allows us to talk about network external effects; Finally, the lock-in effects are defined by the author as the effects associated with the movement of costs between sectors of the economy, which may be due to several reasons: from the costs that may arise when terminating contracts related to network goods, technological costs (for example, transition to new software incurs significant costs that may not pay off), to the costs associated with the loss of privileges that were given to the user when consuming a specific network good.

In 1995, a Canadian specialist in business and consulting Don Tapscott [10] proposed a new term designed to characterize trends in the global economy - Digital Economy.

In his works, Tapscott describes howthe way of life of people can and should change under the influence of information and communication technologies (ICT), and focuses on the links between users - primarily on the possibilities of network interaction between people from different geographical locations, fields of activity, and so on. It is the avalanche-like growth of information links that is the basis of the new economy.

Accordingly, the Digital Economy is an economy based on information and communication technologies (ICT). The OECD ranks among it enterprises that create or provide processes for electronic exchange of information, its processing, etc. “Digital employment” includes any jobs in the digital sector and digital jobs in the nondigital sector.

According to Tapscott, it is the development of the digital economy that should become the primary driver of globalization. He lists ten technological changes that will accompany the development of the new economy and make the global economy more efficient. In 2017, we can conclude that all these shifts have already occurred. ICTs have had a tremendous impact on many sectors of the economy, but the depth of that impact and the speed of change in each sector are different.

The production of new knowledge, the combination of digital economic activity with the traditional is becoming a new economic force, and therefore requires special consideration.

Figure 1 schematically shows the place of the digital economy in the global economy.The “core” of the digital economy is the established technological sector of information and communication technologies (ICT sector), whose work is provided by companies that produce software and hardware, as well as provide consulting and telecommunication services. Beyond the ICT core, the digital economy provides the basis for the development of new business models, digital platforms and services that enable new types of economic activities. It is this part that is most challenging to regulation and the economic structure. Since the digital economy has an impact on traditional industries, which leads to significant changes on a global scale, its borders are blurred (as shown in Figure 1). At the same time, traditional sectors of the global economy are also being transformed under the influence of ICT.

Since digital technology is used in almost all areas of human activity, it is difficult to isolate and evaluate the market volume of the digital economy. The topic of the fifth IMF statistical forum in Washington in November 2017 was “Measuring the Digital Economy”, which emphasizes the relevance and complexity of this issue. The problem is that existing methods of estimating GDP and economic activity may be inadequate to changing working conditions and consumption patterns. For example, Internet services offer new services, users transfer money directly to each other, a wide range of goods and services get to the buyer through new logistics routes. Moreover, some services are provided free of charge through direct or indirect advertising - this is the case with e-mail and social services. The latest messengers allow users to communicate with each other for free, which forces mobile providers and Internet providers to change business models. Online television, as well as other digital segments of the economy are getting active development, occupying an increasing share of GDP. Accordingly, the current GDP of some states may be underestimated.

According to the 2016 report of the International Telecommunication Union (ITU), the most developed countries in the field of ICTs are the Republic of Korea (1st position), Iceland, Denmark, Switzerland, Great Britain, China (together with Hong Kong), Sweden, the Netherlands, Norway and Japan. The rating of countries was compiled on the basis of the ICT Development Index (Korea - 8.8 out of 10; Germany ranks 12th, USA - 15th, Russia - 43rd). Out of the considered countries, Niger showed the lowest level of ICT development [13].

According to the Digital Economy and Society Index (DESI), the most developed digital economies in 2017 Scandinavia, Benelux, Great Britain and Ireland. 98% of the EU population has access to the Internet, 84% have access to 4G networks, while 44% of the population do not have basic digital skills. The share of ICT professionals in the EU grew in 2015 to 3.6% from 3.2% in 2013. Entrepreneurs in the EU are actively introducing digital services - 18% of companies send invoices online (11% in 2014), 20% communicate with customers online (14% in 2013), 17% of medium and small companies trade online [14].

Obviously, the digital services market is growing, but measuring the size of this market remains a matter of controversy. The ICT market in developed countries ranges from 3% to 6% of GDP: according to the OECD (2015), in Germany, ICTs account for 4.2% of GDP, in Great Britain - 5.8%, in Sweden - 6.4%. The sector provides between 4% and 9% of value added in OECD countries. Ireland is the leader (11%) due to its special tax status. The total global size of the digital sector can be estimated at 5% of global GDP, employment at 3% - these estimates are based on the share of turnover and the number of employees of digital companies, as well as the dynamics of the number of ICT-related vacancies in the digital divisions of traditional companies.

Digital technology-related sectors show a greater increase in labor force than the global economy. For example, in Canada from 2011-2016, the annual growth of workers in this area amounted to 2.4% vs 1.2% of the total growth. State initiatives and analytical materials on the digital economy in countries such as the USA, Great Britain and Germany indicate the need for new specialists to meet the growing demand in this area [15].

Great Britain is one of the most digitally developed countries in Europe and the world. The British government identifies some promising technologies that it considers strategically important for the development of the economy and has declared its intention to become a leader in these areas, highlighting the blockchain and 5G communication. According to estimates by the British government, in 2014 more than 1.3 million people, 204 thousand enterprises (or 9% of the total) were employed in the digital economy, and the contribution of the digital economy amounted to 7% of GDP. In 2014-2016, the country developed some special documents and digital initiatives. The development of communication systems is very successful in Great Britain - for example, it is expected that by the end of 2017, 98% of the country’s territory will be covered by 4G communications (compare: in Russia, where communications are also well developed, 4G is available only in medium and large cities).

Germany is another example of a digitally developed economy. The added value in the ICT sector of Germany in 2015 amounted to 99 billion euros, sector investments - 14.5 billion euros. Internet services and goods generate an income of 1.4 thousand euros per person (2015). The total turnover of the German digital economy exceeds 110 billion euros. In addition to ICT, the leading industries include knowledge-intensive services, finance and insurance, retail, and energy. Industrial production refers to sectors with a weak level of digitalization [18].

The number of technology companies is also growing among the hundred largest global transnational corporations. If in 2010 there were 11 such companies, by 2015 it was already 19. The average annual increase in the number of employees in high-tech TNCs was 5%, turnover - 5%, assets - 11%. There was no growth in telecommunication and other TNCs. Thus, an increase in efficiency and digitalization do not create new jobs in established companies, but such jobs appear only in tech companies. The five U.S. companies with the most capitalization in 2017 were technology companies (Apple, Alphabet, Microsoft, Facebook, and Amazon). Their total capitalization exceeds $3 trillion, or more than 15% of US GDP, and the average capitalization is 3 times higher in comparison with the capitalization of other TNCs [15].

It is worth noting that in the field of ICT, there has been a decrease in the number of patents issued annually. Strange as it may seem, the reasons for this are also related to the development of the digital economy. First, ICT innovations become “innovation of efficiency” (as defined by Harvard Business School professor Clayton Christensen), i.e. imply job cuts and accelerated processes. Secondly, the product life cycle is shortened, and the patent review time is growing. This is due to the accelerated digitalization of many sectors of the economy and the inconsistency of patents with the short term of applicability of the latest digital developments. The number of promising and fundamental developments, as before, remains limited. Accordingly, most of the modern ICT developments solve shortterm problems and in one or two years give way to new ones, therefore it is premature to talk about the existing structure of the digital economy.

The spread of Internet access stimulates digitalization. In the 1990s, the Internet was just starting out, while in 2017, in OECD countries, more than 82% of the adult population had access to it, and 75% used it daily. According to the World Bank, in 2016, half of the world’s population had access to the Internet. However, in the least developed countries, only 15% of the population has access to the Internet, which should lead to a serious margin of growth. The main limitation on Internet distribution is the high monthly fee. Due to the underdeveloped ICT infrastructure in developing countries, the fee for broadband mobile Internet in 2015 amounted to 17% of domestic national income, while in developed countries it was only 5%.

At the same time, in developing countries there is a continuous increase in e-commerce. According to PwC, in ASEAN countries, 57% of buyers use mobile phones for online shopping (in the rest of the world, their share is only 44%). It is significant that the growth rate of e-commerce sales is 4 times higher than the growth rate of the number of global trade sales in general: according to forecasts, retail sales in 2017 will grow by 5.8%, and e-commerce by 23.2%, to $2.3 trillion. At the same time, the leaders in e-commerce are China and the United States, whose sales account for 69.1% of global e-commerce sales. According to the eMarketer report, in 2017, e-commerce sales will already account for more than 10% of global retail sales. It is expected that by 2021 they will reach a share of 16%. E-commerce has enormous potential in Africa - again thanks to the proliferation of mobile Internet. The banking infrastructure and fixed Internet are poorly developed in the region, but low-cost smartphones with wireless connections, which provide access to online banking, are widespread. More than 60% of the African population has mobile communications, and half of the users have access to mobile Internet [14].

It should be noted that the digital economy is making a significant contribution through the digitalization of supply chains in the nondigital sectors of the global economy. The share of foreign capital and foreign supplies in TNCs is growing. In 2015, 64% sales of the largest TNCs were made abroad. Cloud services allow the work of multinational corporations and outsourcing jobs to be centralized. Similar trends are occurring on the client side, as a result of which new sales channels are created.

The growing role of the digital economy has recently attracted the attention of Kazakh officials. The issue of the need to support the digital sector is being discussed at the highest level: in particular, keynote addresses at the international economic forum in June 2017 were devoted to this topic. It should be emphasized that data is an important element of the digital economy – the collection, analysis and processing of which forms the basis for the success of the development of the digital economy. The position of Kazakhstan regarding the role and status of data and the possibilities of its collection and processing is contradictory. On the one hand, the benefits and potential of using open data are emphasized. On the other hand, control over the collection and storage of data (the “Yarovaya law”) is being strengthened, and requirements for providing access to the Internet are being tightened. The confidentiality of data and the isolation of the Russian-speaking and Kazakhspeaking Internet from the global network can, in the future, have a restraining effect on the development of the digital economy in Kazakhstan, creating new challenges and will lead to a technological lag (due to a separation from the best practices of developed countries in the field of ICT).

According to The Boston Consulting Group, the highest share of the digital economy in GDP - 13% - falls on Great Britain. In other developed countries, this figure is lower, but by 2025 it promises to reach the level of 50%. This means that the states that today support the development of the IT industry will be on the list of leaders in a few years. Needless to say, this is not so much about respectable status, but about the growth of citizens’ well-being and their quality of life.

For obvious reasons, Kazakhstan is also looking to take advantage of this trend. “Digitalization is not a goal, it is a means of achieving Kazakhstan’s absolute advantage. Without this, no self-respecting country can enjoy a normal life. We will not outclass the competition - we will lag behind and stay in the dust of the states ahead”, President Nursultan Nazarbayev said.

To implement the instructions of the Head of State, at the end of 2017, the state program Digital Kazakhstan was adopted, according to which the share of electronic commerce should grow to 2.6%, electronic government services - up to 80%. At the same time, due to digitalization, the creation of 300 thousand new jobs is planned. All this should be reached by 2022. As Nursultan Nazarbayev noted, “thanks to digitalization, the Kazakhstani economy should increase by 30%, in monetary terms this will amount to more than 2 trillion tenge”.

Digitalization makes it possible not only to achieve the effectiveness or competitiveness of the national economy, but also to get rid of the notorious influence of the human factor.

And in this sense, it is attractive not only for the private sector but also the public. Since it reduces the influence of bureaucracy and corruption.

The Kyrgyz authorities put their trust in such a feature of the digital economy. “We plan to optimize government spending and reduce the risk of corruption through the digitalization of relations between society and the state. Due to this, we will be able to adjust the existing gaps in the budget. In 2018, our government will become digital”, Prime Minister Sapar Iskakov said.

The fight against corruption is an important factor for stability. The World Bank will assist Bishkek in this matter, which will allocate the necessary funds. But besides corruption, one should not forget about the multiplier effect that the digital economy has on different spheres of society.

For example, in Uzbekistan, in developing the Internet, they have paid great attention to e-government and increasing the efficiency of government agencies. But it has some challenges: a recent analysis showed that out of 300 government Internet resources, only 10% are interconnected. In this regard, the task is to optimize the work of the public sector in cyberspace.

Behind the attempt to increase the efficiency of government agencies lies a practical task - to simplify the lives of citizens and businesses. Maybe not directly, but indirectly, it also contributes to the formation of a digital economy in the country. As in Kyrgyzstan, the World Bank is ready to help the authorities of Uzbekistan. As far as Tajikistan and Turkmenistan are concerned, the impact and prospects of digital technologies are only under discussion.

In fact, in the region there are both leading countries that are already taking steps to increase the share of the digital economy, and states that are still only on the verge of change. The latter should hurry, as there is a direct connection between the development of the IT sphere and the level of income of the population. This means that inequality in the region may increase if the authorities continue to drag out activities aimed at digitalization.

2018 was a landmark year for Central Asia. An ambitious Digital CASA plan was launched in the region. This is a digital duplicate of the CASA project, which has been discussed for many years by electrical engineers. It will combine electricity suppliers with consumers: Kyrgyzstan and Tajikistan - with Afghanistan and Pakistan. Not only has a common energy market emerged, but also the basis for the integration of countries. Thanks to this, the landlocked CA states were able to overcome geographical isolation.

The potential of the digital economy will not only enhance business competitiveness, but also make borders between Central Asian countries transparent, strengthen intra-regional cooperation, increase trade, and build economic ties. Not only capital, but also the labor market and even politics will have a positive effect. At least trust and mutual understanding will grow between countries, and overall regional security will be strengthened.

Speaking about the prospects of the digital economy in Central Asia, one should not disregard at least two countries - Russia and China, which not only border the states of the region, but are also their key partners. And therefore, there is a likelihood of their influence on our 5 republics. However, it’s not all that simple.

In a sense, Kazakhstan is even ahead of Russia. We started discussing the digital economy and adopted a state program for the “digitalization” of the business environment ahead of our neighbor. Although, it should be recognized that the share and volume of the IT sphere in Russia remains higher than ours.

Furthermore, our neighbor, by stimulating the digital economy, is set not only to increase the efficiency of its companies, but also to reduce the brain drain by 2025 by 3 times.

Talking about who has stepped forward does not make much sense; the aspect of cooperation is more interesting. The leaders of our countries spoke about this in 2017 at the interregional forum in Chelyabinsk. Nursultan Nazarbayev proposed to hold in Astana a special forum of the EEU on digitalization of the economy. “Kazakhstan and Russia should be the locomotives in this area”, the Head of State said.

As Tigran Sargsyan, Chairman of the EEC Board, explained, “it is necessary to pursue a consistent policy in this area. Otherwise, we will have new barriers tomorrow”.

China is a good example, where large IT companies appeared long before the world started talking about the digital economy. Structures such as Alibaba or Baidu have long gained fame outside the country. And today they are investing in the creation of new enterprises in the IT industry, increasing the share of the digital economy in the GDP of the Celestial Empire.

The influence of China and its IT sector is expected to grow through foreign policy projects. The priority is the revival of the Silk Road, which will connect Europe and Asia. It is worth noting that logistics is one of the areas that is highly susceptible to digitalization. As an example, the American company Amazon, a large online retailer, wants to deliver goods to the buyer using drones.

Late regulation is often named as one of the reasons for the success of the development of China’s digital economy. The state only began to intervene relatively recently, limiting the volume of transactions. A similar picture was observed in the USA and other western countries. The driver of the growth of the digital economy was the commercial sector. This is the difference from our region, where the state plays the leading role.

This, however, is not the only specificity of the countries of Central Asia, which leaves its mark on the prospects for the development of the digital economy. Another problem is the lack of public access to cheap and high-speed Internet. According to the World Bank, Kazakhstan has done better here, but other countries in the region must solve this problem.

Conclusions

Obviously, the state should motivate businesses to use and disseminate digital innovations.

Leading experts in this field believe that the state should be both the initiator of the development and implementation, and an active user of digital technologies.

The leading role of the state in the development of the digital economy is emphasized by World Bank consultant A. Stott, who believes that the digital economy needs to develop as part of national politics. Thus, in the United States, government plays a significant role in the development of the digital economy, especially in the initial stages.

R. Atkinson, president of the US Information Technology and Innovation Foundation, cites Google as an example, which was created with money from government grants. The government helps in the development of a digital economy by financing R&D and providing tax benefits on a par with private venture funds [12].

At the same time, the experience of Australia shows that the digitalization of the economy can develop under the pressure of the market. Australian representative of World Bank, Director of Global Practices for Digital Services and Platforms J. Treadwell believes that the government should have certain tasks, which include investments in public broadband Internet access, science and research, as well as providing a regulatory framework [12].

In 2010, Great Britain adopted the Law on the Digital Economy, and then developed a strategy for the digital economy, which aims to solve the problem of successful digital transformation of the national economy. To this end, the government plans to create a world-class digital infrastructure and create conditions for the development of digital business, which includes financial support, as well as the provision of consulting services. The above measures should motivate companies to use digital innovation. In addition, this strategy calls for the opening of five international digital centers in emerging markets to support British business in other countries.

According to Accenture consulting company, the development of the digital economy will bring the British economy an additional £654 billion by 2035, which will be a significant support for business and the state in the face of growing unemployment (from 4.5% in 2017 to 4.8% in 2018), declining labor productivity, which has not been growing since 2010, and an increase in the outflow of capital from the country [11].

It is obvious that in each country the development of the digital economy depends on the maturity of markets, the level of development of science, education and the state of the national economy. There is a point of view assuming that the digital economy will reach a sufficient degree of development only if the value of transactions for the sale of goods and services in cyberspace exceeds that of similar transactions in the real economy. But this is only possible if a sufficient number of various goods that can be bought and sold over the Internet are produced in the real economy.

The widespread digitalization of the economy cannot be achieved and become effective without increasing the competitiveness of real production, updating and expanding its potential. This is especially true for Kazakhstan: amid falling investment activity for the third year in a row, lack of liquidity, a high degree of depreciation of fixed assets (in general, according to experts, 48.7%, and in some industries up to 55%), low equipment renewal ratios (in education it amounted to 2.5%, and in healthcare - 2.2%). If the renewal rate is 4%, then it will take 25 years to completely replace the old funds.

The digital economy has not only tangible advantages over the traditional one, but also carries new risks that the state should be able to predict and minimize. Transformation of the labor market should be highlighted among the most pressing problems.

Experts disagree on this issue. As noted in a World Bank study, the so-called digital dividends include an increase in jobs. This view contradicts the widespread assertion that the digital economy will cause a sharp increase in unemployment in the world. Evidence suggests that widespread automation leads to the abandonment of the use of human labor, which would entail mass dismissal of employees.

With increasing unemployment, the company’s total income decreases, salary growth stops, resulting in a reduction in aggregate demand, and depressed demand undermines incentives for investment and employment, which will result in a slowdown in productivity growth and a decrease in the general welfare of society.

Today, IT companies are ahead of commodity companies in terms of market capitalization. A study by the Global Center for Digital Business Transformation notes that in the next five years, the digital revolution will displace 40% of the companies that now occupy a leading position in the industry if they do not undergo digital transformation [14].

All these processes inevitably exacerbate the problems of socio-economic inequality. According to the Vice President and Board Member of the Gartner company D. Furlonger, every major technological breakthrough has brought undesirable and even dangerous consequences, and a programmed economy will not be an exception. For example, the adverse effects of a programmable economy will be expressed in the emergence of ethical problems since machines will make independent decisions and as a result new opportunities for illegal financial activities [15].

In this case, we are talking about the spread of blockchain technology, which could entail the loss by the state of a monopoly on the issue of national currency. In addition, the digital security issue is gaining relevance. Losses from cyber-attacks implemented through computer viruses are estimated at tens of billions of dollars. In 2016, about 600 million digital crimes were committed in the world, while business losses amounted to about $400 billion. According to Microsoft, in 2017 alone, the number of cybercrimes in the world quadrupled [16].

The transition to a model of the digital economy in the global economy is accompanied by fundamentally new, qualitative changes in socio-economic relations both at the state level and at the level of business. This process brings new opportunities and threats. The share of the Internet economy is growing in the GDP of all developed countries, but according to the calculations of Gartner analysts, by 2025 the digital transformation will affect all areas of most countries of the world [17]. To measure the effectiveness of the digital economy, it is necessary to have generally accepted and unambiguous methods that are not yet available. Obviously, the results should be evaluated based on the set goals and objectives, should be calculated and realized considering the criterion of socio-economic feasibility. A digital economy development strategy cannot be developed simply to test a new idea.

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Year: 2019
City: Almaty