January 30, 2020 • Business

Economic Growth through Digital Transformation

Economic Growth through Digital Transformation

For a country to thrive and grow in the 21st century, it must focus on digitalization and technology. If you look at growth and development figures, you'll note that countries like Estonia, Finland, Israel and Canada are using digitalization in their affairs.

Just like other areas, digitalization and the use of technology can help a country grow economically. A few services such as e-payments, e-voting, e-health and e-banking programmes, and e-residency can contribute healthily to economic growth. In addition, transforming business trends and approaches using digitalized methods can help a country become more economically independent.

Let me help you develop a deeper understanding of how economic growth is possible through digital transformation.

The government can make better decisions and policies:

Storing data in digital storage and retrieving it at the time of need can streamline the whole process. It’s much easier and faster to get data regarding any resource, such as people, land, vehicles, and licenses, by searching on private servers rather than hunting through paper files and documents. Government agencies can get their hands on data faster when it’s stored digitally. This can help government agencies make better decisions and develop better policies and ultimately help in the economic growth of a country.

It’s easier to run or start new businesses:

When all the information needed for starting a new business is available but not easily accessible, the implementation process is delayed. The Internet alleviates this problem by providing you with access to all the information you need, easily and conveniently. When a business can operate more efficiently, it can positively impact the economic growth of the country. The possibility for businesses to connect digitally to other businesses makes operation much more efficient. Consider visiting a doctors office and running a test, the result of that test can be shared to another doctor’s office immediately or on-demand; with your permission of course.

Better security for citizens:

Digital transformation also helps in citizen security and safety, ultimately resulting in economic growth. Wondering how? Let me explain. When criminal records and crime data are easily and quickly accessible to the citizens, it’s easier for them to keep themselves safe. This data is also useful for government agencies to provide better security to the people. For example, digital criminal record tools can help citizens identify potential criminals in their area and take necessary actions to keep themselves safe.

When citizens feel safe, and the crime rate is low in an area, people are attracted to that area. More people are willing to come and work there, resulting in economic growth.

No access limit for different people:

The data and information available on the internet aren’t limited to people of a specific gender, geography, or income. Anyone can access such information and utilize it for their business needs. The progress of individuals results in the progress of the country. So, this global information available through digital sources actually helps in the economic growth a country.

Labour productivity is boosted:

A farmer with a tractor can work more efficiently and quickly than 10 farmers working without a tractor. That's just a straightforward example of how technology and digital approaches can help boost productivity. Consider an example where one business is using digital approaches like online data storage and another one is using old-school documents and files to store data. The overall productivity of the former will be much, much higher. More productivity equals higher revenue. And what does higher revenue mean? A fraction of help in the quest for economic growth of a country.

Human capital is incremented:

The skilled and educated labour force of a country is called human capital. When a country starts using digital transformation methods, more people can educate themselves and learn new skills by employing digitally available resources. This results in an increment in the human capital, ultimately resulting in economic growth.

Supply is increased significantly:

When businesses use technology for its processes to generate products and provide services, the supply is enhanced by a considerable margin. A company lacking in the use of modern digital methods will have much lower outputs. A lower production can result in inflation, i.e. when demand is higher and supply is not enough to fulfil that demand.

Businesses utilizing technology for their processes don't have to deal with such problems. That's because the methods are faster and efficient, more products or services can be provided in the same duration. When businesses of a country can fulfil the demand of clients, especially overseas ones, the economic infrastructure of that country becomes stronger and more rigid.

International trade becomes easier:

Without the use of digital communication methods, trade with other countries becomes a much, much harder job. Offline communication is slow and unproductive. Using modern digital communication procedures makes your trade communications easier, at both individual and national levels. Trade with other countries is a massive pillar in the overall economic structure of a nation. When this pillar becomes stronger, the economy of the country gets boosted and becomes independent.

New opportunities arise for conducting business with international clients:

The use of digital business platforms provides new opportunities for the citizens of the country to do business with international clients interested in their skills.

The most common example of this is freelancing. Citizens of one country can provide their services to international clients with ease. When citizens sell their services to global clients, they bring money to their country, eventually helping to strengthen the economic infrastructure of the country.

Production costs are minimized:

Producing products without the use of modern technology results in higher production costs. Lower production costs help you provide more products for the same budget. This results in higher revenue for you. Higher business revenue for individual businesses helps the economic growth of the whole country.

Today's world is very fast-moving. To keep up with the tough competition, it's essential to utilize modern digital techniques. A country utilizing these digital techniques to their fullest will grow and keep up with others, and possibly outshine them.

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