Digital Economy

When I graduated from the English Economics department at Marmara University in 1990, personal computers and the internet were not yet widespread enough to enter homes. Mobile phones were also non-existent. Therefore, the information and communication systems that would form the foundation of what we call new media were in their infancy, and information was not yet associated with labor, capital, and land as the fundamental factors of production.  

In the process that began with the internet becoming widespread from the first half of the '90s as one of the United States' global hegemonic strategies for the 21st century, and its presentation as a gift that would leapfrog the whole world into a new era, bringing freedoms and access to information, masses began to be drawn to this medium using the AIDA (Attention, Interest, Desire, Action) principle, a method well known to communicators. 

Thus, societies would be channeled into the digital environment globally, and entertainment, social life, education, and business life would begin to be conducted in these channels. This started primarily with benefiting from the possibilities of technology for "free" or for very small fees. For example, in 2001, Apple released the iPod device for downloading and listening to music. In 2003, when it launched the iTunes platform with a fee of 99 cents per song, it initiated an irreversible digital transformation.

With technology becoming more widespread and relatively cheaper (!), more people flocked to digital environments. Free email accounts and gigabytes of disk space were very attractive. Using applications like WhatsApp for calls became common because the phone operator's call rates were higher. In other words, technological tools were presented to us with which we could meet our "infinite needs" with more limited resources(!). On the other hand, the saying by Apple CEO Tim Cook in 2018, "if you are not the customer, you are the product," became a reality. 

It was quite difficult to imagine such things happening while I was studying economics. But now, I think it is necessary to focus on these main points to evaluate the transformations brought about by the digital economy:

New Business Models and Revenue Sources: The digital economy changes traditional business models and reveals new revenue sources. We can focus on creative revenue sources of the digital economy such as online sales, subscription models, and advertising revenues. But we do not yet know how the negative consequences of these business models, for example regarding the protection of personal data, can be resolved. 

Digital Workforce and Employment: The rise of the digital economy increases the demand for employees with digital skills in the business world. In this context, we can focus on dynamics in the labor market and workforce training issues. But we do not yet know how much this situation will change the exploitation of the workforce. 

E-commerce and Global Trade: The digital economy encourages a trading environment that transcends borders. We can focus on questions such as 'How does the growth of e-commerce affect global economic relations and how are these changes reflected in economic strategies?' But we do not yet know how this situation will affect the way countries impose embargoes on each other. 

Digital Transformation and Competition: The digitalization processes of businesses affect competitive dynamics. Therefore, we can evaluate the effects of new technologies and digital transformation on economic competition. But we do not yet know what kind of effect these will have on the monopolization process. 

Furthermore, another important element to consider in the evaluation of the digital economy is the rise of financial technologies (fintech). The digital economy has accelerated innovations in the financial sector and increased competition with traditional banking systems. Fintech applications such as mobile payments, cryptocurrencies, and smart contracts are facilitating access to financial services and transforming payment systems. In this context, examining the effects of the digital economy on the financial sector can offer an important perspective for understanding the evolution of economic models and strategies.