POST OF THE DAY
July 24, 2014,Posted by: E-Journal
SUSTAINABLE PROSPECTIVES OF DIGITAL ECONOMY IN UZBEKISTANSponsor projects: Tashkent State University of Economics and CENTRE OF SCIENTIFIC PUBLICATIONS IN UZBEKISTAN
There is a common belief that in today’s high-tech world, we cannot visualize our life without internet. Shortly, a global village is the part of our life. Meaning that, to find any kind of information is very easy with internet devices, to search news , do shopping, business, earn money and others are available by internet. Furthermore, it is a fact that most developed countries are utilizing online payment system to raise economic system by boosting the speed of money in banks. On this situation, the term of digital age is born. The digital age is transforming everything: the nature of markets and products, how to produce, how to deliver and pay, the scale of capital to operate globally, and human capital requirements. It is also boosting productivity, exposing companies to new ideas, technologies, new management and business models, and creating new channels of market access. And all of this at relatively low costs. It is no exaggeration to predict that firms will increasingly rely on artificial intelligence for basic routines and for more complex tasks. Also, coming across with words with prefix ‘e’ which means online version such as e-commerce, e-business, e-trade, e-book and others is simple situation. Also, to analyze the impact of digital economy on developing countries is absolutely essential to be informed about their beneficial sides. Digital economy refers to an economy that is based on digital computing technologies. The digital economy is also sometimes called the Internet Economy, the New Economy, or Web Economy. Increasingly, the "digital economy" is intertwined with the traditional economy making a clear delineation harder. Digitization plays crucial role in the digital economy system. Digitization is a process of converting the diverse forms of information, such as text, sound, image or voice into digitalized format. The digitization has a proven impact on economy and society by reducing unemployment, improving quality of life, and boosting access to knowledge and other public services.* The term 'Digital Economy' was first coined in Don Tapscott's 1995 best-seller The Digital Economy: Promise and Peril in the Age of Networked Intelligence. The Digital Economy was among the first books to show how the Internet would change the way we did business. According to Thomas Mesenbourg (2001), three main components of the 'Digital Economy' concept can be identified:
E-business infrastructure (hardware, software, telecom, networks, human capital, etc.), E-business (how business is conducted, any process that an organization conducts over computer-mediated networks), E-commerce (transfer of goods, for example when a book is sold online). New applications comprising social media and Internet search are blurring these boundaries and adding complexity. It is interesting to note that The Digital Economy uses a tenth of the world's electricity. The move to the cloud has also caused the rise in electricity use and carbon emissions by the digital economy. Picture 1. Benefits of Digital economy in Economic Sectors Source: https://www.weforum.org/agenda/2019/01/the-digital-future-we-need Additionally, the rapid adoption of new digital technology in emerging markets is evident in global mobility trends. Latest statistics from the International Telecommunication Union (ITU) estimate about 5.3 billion mobile subscribers in the world, with about 73% (3.8 billion) located in the developing world. China and India are fuelling most of the growth: These markets added 300 million new mobile users in 2010 alone—a figure greater than the US’s entire mobile subscription base. And with mobile costs falling, China and India are likely to see continued meteoric growth. According to E Marketer, the number of mobile users in China will jump from around 671.1 million in 2010 to almost 1.06 billion in 2015; India’s will leap from 516.2 million to 901.2 million for that same period. The Digital Evolution Index analyzes the underlying drivers that govern a country’s digitalization: Supply Conditions, Demand Conditions , Institutional Environment, and Innovation and Change. Thus, the President of Republic of
Uzbekistan, Shavkat Miromonovich Mizrioyev imposes to pay close attention to and enhance these branches. To gain a comprehensive view of digital readiness and competitiveness of countries, we further divided these drivers into 12 components measured using a total of 108 indicators. The six drivers, 12 components, and sample indicators are illustrated below (Picture 2). Picture 2. Six Shared Global Outcomes To Achieve a Sustainable, Inclusive and Trustworthy Digital World
According to experts point of view, the competitiveness of a country’s digital economy is a function of two factors: its current state of digitalization and—more importantly—its pace of digitalization over time, as measured by the growth rate of a country’s digitalization score over an decades (2008—2020). This pace of digitalization, which we refer to as momentum, is a lead indicator of a country’s future digital potential and prospects. According to the press service of the Ministry of Information Technologies and Communications, the draft resolution of the Cabinet of Ministers sets the following directions for the development of digital economy in the Republic of Uzbekistan.
If we conclude findings of the paper work is following suggestions can be distributed: - Identification of state and economic bodies, local self-government bodies on the basis of necessary information systems and resources; - Creation of favorable conditions for attracting foreign investments in the country; -Coordination of modern telecommunication infrastructure, development of communication technologies and networks, introduction of modern IT services.
THE ROLE OF DIGITAL ECONOMY IN UZBEKISTAN
From the advent of the Internet our whole world is associated with it. Now we do shopping online, we run and promote our business by using browsers as well as applications. Moreover, most of the bank and tax operations are being carried out with electronic devises. Nowadays we are coming across with words with prefix ‘e’ which means online version such as e-commerce, e-business, e-government, e-learning and others. The most interesting side is analyzing impact of digital economy on developing countries in order to be much informed about our benefits from it. Digital economy is defined as an economy that focuses on digital technologies, i.e. it is based on digital and computing technologies. It essentially covers all business, economic, social, cultural etc. activities that are supported by the web and other digital communication technologies. The term was first coined in a book “The Digital Economy: Promise and Peril in the Age of Networked Intelligence” by author Don Tapscott in 1995. There are three main components of this economy, namely, e-business e-business infrastructure e-commerce In the last 15 years, we have seen the tremendous growth of digital platforms and their influence on our lives. Now consumers are influenced by things they see on social media (Facebook, Twitter, Instagram) and other such popular websites (youtube etc).
According to opinions of Kazakhstan researchers:” Modern achievements in development of global information and communication technologies or the Internet technologies led to formation of the global electronic environment for economic activity that, in turn, opened new opportunities for organizational and institutional design in business and other spheres of social and economic activity of the person. It is acknowledged that ICT has the crucial role in connecting people and communities; increasing innovation and productivity; improving standards of living; enhancing competitiveness and economic and societal modernization, bridging economic and social divides as well as reducing poverty across the globe”1.
If we turn to assessing the role of digital economy in transition economies, we can say that it can enhance lifestyle of citizens of the developing countries. Now many this type of countries are trying to have bigger share in e-commerce globally and regionally, as it can simplify market operations ,widen the options for costumers and make products easily reachable for every inhabitant. Unfortunately, e-commerce is sphere which is still underdeveloped in Uzbekistan and there are not any official numbers that can indicate electronic trading on the market value or revenue. Nevertheless, in May 2018, the President of The Uzbekistan Shavkat Mirziyoyev
1 G. M. K. Berdykulova, A. I. U. Sailov, S. Y. K. Kaliazhdarova, and E. B. U. Berdykulov, “The Emerging Digital Economy: Case of Kazakhstan,” Procedia - Soc. Behav. Sci., vol. 109, pp. 1287–1291, 2014.
signed a decree “On measures for the accelerated development of e-commerce", and approved the "Program for the Development of E-commerce in Uzbekistan for 2018-2021". As a result, the market is expected to grow significantly in the next few years. “According to WTO, the Internet is revolutionizing the distribution of tourism information and sales. An increasing proportion of Internet users are buying on–line and tourism will gain a larger and larger share of the online commerce market”2. If we evaluate the significance of the Internet in tourism, we can say that in current days we are used to booking in advance rooms in hotels as well as tickets by using online transactions and payments. Therefore, now people have huge demand for credit cards which are accepted internationally that ,in turn, can decrease need for money in the form of physical banknotes and coins. With initiative of the President of the Republic of Uzbekistan Shavkat Mirziyoyev new type of payment card has been introduced to society in recent days that was named “Humo”. “Humo” is designed for Improve quick money transactions and operations. Figure 1 Source: https://inform.tmforum.org/sponsored-feature/2014/07/role-policy-real-time-charging-new-digital-economy/ If electronic data which are exchanged through electronic commerce are exposed to theft, falsification or unauthorized access, there will be remarkable damage in the degree of trust for the foundation of the digital economy. Also, neglecting social problems accompanying the development of the digital economy, including the problems of the circulation of obscene information and the obstruction of privacy, and consumer-related problems, will make it impossible to assure security in economic activities. In order to realize the sound development of the digital economy, these problems should be adequately dealt with, basically through technology and the marketplace.
According to the press service of the Ministry of Information Technologies and Communications, the draft resolution of the Cabinet of Ministers sets the following directions for the development of digital economy in the Republic of Uzbekistan:
2 S. B. Hojeghan and A. N. Esfangareh, “Digital economy and tourism impacts, influences and challenges,” Procedia - Soc. Behav. Sci., vol. 19, pp. 308–316, 2011.
- identification of state and economic bodies, local self-government bodies on the basis of necessary information systems and resources, implementation of software and electronic services;
- creation of favorable conditions for attracting foreign investments in the country by organizing the technology market and technology parks on the basis of the digital economy, information technologies market, including public-private partnerships;
- coordination of modern telecommunication infrastructure, development of communication technologies and networks, introduction of modern telecommunication services;
-improvement of the system of training qualified personnel. At the same time, by 2030 it is planned to implement measures to develop the concept of "Digital Uzbekistan". Figure 2
The digital economy platform is the product of Information and Communications Technology (ICT) investment, innovation, and shared dependencies. As the creators and stewards of this growing digital ecosystem, we have an opportunity and responsibility to work together to drive collective actions that can build greater trust and resiliency, and drive continued economic growth in Uzbekistan.