Digitalisation and the Digital Economy

The transformative impact of digitalisation on economies is demonstrated by how digital technologies reshape markets, industries, and labour dynamics in a globalised context. We introduce key concepts, such as the digital economy, network effects, and platform business models, to explain the proliferation of digital technologies across sectors. The chapter analyses the benefits of digitalisation, including increased productivity, enhanced market access, and innovation, alongside challenges such as data privacy, cybersecurity, and the digital divide. It examines how globalisation amplifies digitalisation’s effects, facilitating cross-border trade, digital labour markets, and knowledge exchange, while raising governance and regulatory issues. Policies for fostering an inclusive digital economy, such as investments in digital infrastructure, education, and data governance, are evaluated. Empirical tools, such as structural equation models, are discussed for measuring the impacts of digitalisation. By integrating theoretical insights, empirical evidence, and policy frameworks, the chapter highlights the role of digitalisation in shaping modern economies and global competitiveness.