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Theoretical foundations and main stages of the transformation of the digitalization of the economy

Abstract

Object: The relevance of the article is due to the fact that the modern economy is entering an innovative stage of development, and a person with his potential, knowledge, creative thinking, and experience is gaining more and more importance. In the context of the development of the fourth scientific and technological revolution and global digitalization, the usual processes are being transformed and simplified — this is the simplification of access of the population and business to public services, and the acceleration of information exchange, and the emergence of new opportunities for doing business, the creation of new digital products, etc. Over the past decades, the world has been rapidly moving towards a new type of economy, where digital technologies are becoming the main tool for its formation. The expansion of the role of information technology in the work of the private and public sectors is the basis for the transition to a digital state.

Methods: The comparative analysis method used by the authors in the study confirmed the relevance and relevance of digitalization problems, arising from the necessary and irreversible transformation in the digital economy, the introduction of modern digital technologies, resulting the high efficiency of the economy as a whole.

Results: To achieve this goal, the authors analyzed theoretical approaches to the concept of “digital economy”, investigated the stages and principles of the transformation of society in the context of the development and formation of Industry 4.0.

Conclusions: As a result of the study, the authors have formed the concept of a digital economy, analyzed the impact of global digitalization on the socio-cultural transformation of society, identified the main indicators of a digital society, determined the stages and principles of transformation of the digitalization process.

Introduction

The modern world is constantly evolving and changing, and today’s digital transformation can be called as an important factor reflecting these changes. The latest technologies are increasingly entering our lives and affect almost every aspect: from living conditions to education, healthcare, finance, and government. Digital transformations have also affected the global economy. They became popular at a breakneck speed in all highly-developed countries.

Currently, the rapid development of a new digital technology revolution is taking place, coupled with cardinal changes in all socio-economic institutions, and sometimes even with the formation of new ones. The ongoing technological changes bring certain challenges to economics when the previous theoretical concepts formed in the pre-digital era stop working.

These challenges have emerged today for economics as well. Practice shows the need for the formation of new theoretical concepts since the existing ones are no longer relevant in modern conditions.

Nevertheless, the digital economy is already a reality, and for its successful functioning in the new conditions, a readjustment of theoretical concepts and their tools is required.

Nowadays, there are many definitions of digital transformation. Some experts are categorically against “freezing” of this concept and its concretization in a stable definition, justifying this by the fact

that the evolution of digital technologies continues, and the content of this term evolves along with them. However, in our opinion, outlining the boundaries of the essence and content of the term “Digital transformation” is not only an important task but also extremely necessary at the present stage of development of the digital economy, allowing to form a common understanding, and, accordingly, highlight the main directions of digital transformation.

The purpose of the research is to study modern concepts and theories of transformation of the digitalization process in the context of digital technologies use in business.

The subject of the research is the process of transformation of digitalization in the framework of the use of digital technologies.

Literature Review

At the same time, theory lags behind practice: there are still no systematic scientific and theoretical studies that determine the main directions of transformation theories of the digital economy.

Analysis of the scientific literature shows that there are various definitions of categories “digitalization” and “digital economy”. A large number of leading foreign and domestic scientists-economists and authors in their works reveal the concepts of “Digitalization” and “Digital economy” and highlight their features.

The interest of a general methodological and theoretical nature for the author's understanding of the problem under study was made up of fundamental works of such foreign authors as N. Nigroponte, D. Tapscott, L. Mesenburg, and others. Among the domestic authors: A. Babkina, V. Matveeva, N. Vasilenko and the team of authors — E. Loshkareva, P. Luksha, I. Ninenko, I. Smagin, D. Sudakov identified several trends that define the image of digital society in the 21st century. Their concepts and theories were examined in detail by the authors of the article during the study. On the basis of their study, the authors theoretical and methodological concept for the research was formed by authors.

Despite the high level of elaboration of the above issues, the theoretical foundations of the transformation of the digitalization of the economy are an urgent problem, since at the present stage development requires a thorough assessment of this process, the most effective proposals for its implementation.

Materials and Method

The theoretical basis of the study was formulated on the scientific works of Russian and foreign researchers and specialists in the field of economic theory, management theory, the theory of institutional transformations, theory of digital economy, as well as scientific and practical developments in the field of innovative development of digital technologies, transformation of IT companies into service integrators.

The methodological basis of the research is formed by the general scientific principles of the systems approach, system analysis, deduction and induction, analysis and synthesis. The use of these methods allows one to objectively perceive the essential features of the concepts of digitalization transformation, as well as the main stages of its development.

Results and Discussion

Broadly, the digital economy can be defined as the economic activity that is driven by the billions of daily online connections between people, businesses, devices, data, and processes. The backbone of the digital economy is the ever-growing interconnection between people, organizations, and technology, which is the result of information and communication technologies.

The concept of “digital economy” was first mentioned in 1995 by the American computer scientist Nicholas Negroponte. According to Nicholas, a “new” type of economy — digital economy has such advantages as the absence of the physical weight of products, replaced by information volume, lower resource costs for the production of electronic goods, several times smaller area occupied by products (usually electronic media), as well as instant global movement via the Internet (Babkin, A.V., 2018).

On the other hand, there is an opinion that this term appeared owing to the Canadian scientist Don Tapscott. In his book “Digital Economy: Promise and Danger in the Age of Networked Intelligence” (Tapscott, Don, 1995), the author does not define the digital economy directly, but uses the concept of “Age of Networked Intelligence”, the essence of which “not only in network technologies... but also in the interaction of people through network technologies”, which “combine intelligence, knowledge and creativity to make a breakthrough in the creation of social capital and well-being” (Buht, R. & Hiks R.,2018). In other words, Tapscott notes that the digital economy encompasses two types of economic activity. The first informational type means performing basic tasks, for example, loading static information on network resources. The second type related to communications includes different activities that have become available via Internet. Thus, the digital economy is characterized by a wider introduction of knowledge about new products and services, an increase in the importance of learning and innovation, globalization and sustainable development.

Over time, Thomas L. Mesenburg points out three main components of the digital economy concept:

  • Infrastructure of e-business. It is a part of the entire economic infrastructure used for electronic transactions and electronic commerce. It includes hardware, software, telecommunications, network, human capital.
  • Electronic business. It is a model in which business processes, information exchange and commercial transactions are automated using information systems, where the main business processes are transformed with the continuous optimization of products, services and production links.
  • Electronic commerce. It includes all financial and trade transactions that are carried out using computer networks and the business processes associated with these transactions. It implies the expansion of the channels for the supply and sale of products by the enterprise, while the offline business is the leading one.

As for a more modern interpretation of the “digital economy” (Figure 1) in the international information space, there are 3 approaches to its definition, namely:

  1. The digital economy as an organization for doing business on the Internet;
  2. Digital economy as a system of relations based on the use of digital technologies;
  3. The digital economy as the organization of a specific production (Saifullina, Yu.M, Serikova, G.S., Assanova, M.A., Amirova, G.N., Akenov, S.Sh., 2021).

Based on the proposed approaches, we can say that the ideas about the significance of the digital economy are diverse. The digital economy in the narrow sense is a type of commercial activity for the production and sale of electronic goods and services, which has three components: 1 — electronic banking, electronic money and electronic commerce; 2 — various sites that earn money from the sale of RAF rivers, online services; internet media (sound recording, cinema, publishing); 3 — production of appropriate equipment and other supporting activities. We understand this based on the definitions provided by the UK Government and the OECD.

By contrast, the World Bank's interpretation is too broad. In this case, it is more specific to talk about the development of digitalization in general or about the digital transformation of society, when new information and computer technologies penetrate into familiar public spheres.

Let us also consider the approaches to definition by contemporary Russian authors. For example, Doctor of Economics, Professor A.V. Babkin and his colleagues provide several definitions to the term “digital economy”:

  • a type of economy characterized by the active introduction and practical use of digital technologies for collecting, storing, processing, transforming and transmitting information in all spheres of human activity;
  • a complex organizational and technical system in the form of a set of various elements (technical, infrastructural, organizational, software, regulatory, legislative, etc.) with distributed interaction and mutual use by economic agents for the exchange of knowledge in conditions of permanent development (Meyer, P., 2015).

Today, the main role is played by the availability of any resources and the ability to use them in planning activities, rather than possession of it. Alexandra Engovatova, PhD in Economics, Associate Professor of the Department of Economics of Innovation at the Faculty of Economics, Lomonosov Moscow State University, believes that information, its availability, quality, volume, the ability to quickly process it and draw the right conclusions is a fundamental part of the digital economy. Its definition is as follows: “The digital economy is an economy based on new methods of generating, processing, storing, transmitting data, as well as digital computer technologies”. The author emphasizes that “within the framework of this economic model, the existing market business models are undergoing a radical transformation, the model for the formation of added value is changing significantly, the importance of intermediaries at all levels in the economy is sharply reduced”. Alexandra Engovatova also highlights the increasing importance of an individual approach to product formation (Ria novosti, 2017).

V.M. Matveeva views the digital economy as “a paradigm for accelerating economic development through digital technologies”, citing the World Bank Annual Report 2018.

N.V. Vasilenko offers a more universal definition, defining it as “a type of economy characterized by the active introduction and use of digital technologies for storing, processing and transmitting information in all spheres of human activity” (Vasilenko. N.V., 2017). A similar position is held by I