In 2019, Olivia Crabtree began her undergraduate degree in economics at the University of New York. Short on cash, like many of her college-student peers, she began making handmade items like candles and silk flowers to sell on Etsy. But what she expected to be some extra funds to pay for groceries turned into a staggering $22,000 in just three weeks.
Two years later she dropped out of college with a six-figure income thanks to a bestselling ebook called The Small Business Handbook.
This is the digital economy.
Forbes recently featured Olivia’s story, but there are many like Olivia who are ditching traditional career paths or using their degrees to forge their own lucrative careers. Today, the digital economy is empowering individuals, companies, and communities around the world to explore new pathways to new opportunities and success.
In this article, we’ll explore what it all means, and how the digital economy continues to grow around the world.
Quick takeaways
● The digital economy includes all economic activity powered by the human-technology connection, as well as tech-driven trade processes, methods, and capabilities.
● Today, the digital economy accounts for about 10% of the total U.S. GDP.
● The digital economy powers new and innovative opportunities for existing businesses and entrepreneurs.
● Digital inclusion is a foundational necessity for powering the digital economy way for all individuals, communities, and regions around the world.
● Internet access is the first critical step to help drive digital inclusion.
What is the digital economy?
The digital economy encompasses any economic activity that occurs as a result of human and technology connections online—so, for example, e-commerce shoppers connecting to the internet to access digital storefronts. It also includes new processes, methods, and capabilities technologies have enabled related to the marketing, sale, or trade of goods and services.
Some quick facts to demonstrate this definition include:
● E-Commerce — 2.1 billion people now use the internet to shop for leisure and necessity
● Digital Production — Companies are now producing and selling digital products that require no physical inventory and result in massive cost savings
● Education — Online education has transformed the reach of educational institutions from their immediate communities to anywhere in the world
● Digital Marketing — Thanks to the digital economy, 56% of overall marketing budgets are now allocated to digital channels
The U.S. government estimates the digital economy now accounts for about 10.3% of the country’s total annual GDP and experienced consistent growth at a rate of 6.7% between 2016 and 2021, suggesting we’ll see that percentage get higher and higher in the future.
It’s also important to note how the digital economy is related to and impacts communities and individual participants in the general economy, changing the way people conduct business. It has huge implications for small businesses and entrepreneurs, as well as areas that lack internet access.
A shop owner in a rural town, for instance, when equipped with the right digital tools, skills, and resources, can expand a single-shop business to include an online digital store that serves customers anywhere in the world.
Of course, for these kinds of scenarios to be common reality, there’s one critical prerequisite: ubiquitous digital inclusion.
Digital economy and digital inclusion and how they go hand-in-hand
Digital inclusion is the ongoing work to help people and communities have the digital skills, resources, and access necessary to be active participants in modern society. The pyramid graphic below provides a helpful framework for understanding the elements of digital inclusion and how each layer builds on itself to increase the level of digital integration in daily life.
First, people need access to reliable and affordable connectivity.
Next, digital literacy includes the skills and knowledge needed to effectively use digital tools and technologies. Digital literacy ranges from the simple ability to operate a computer or mobile device, to understanding different types of media and information available online, to having the know-how to recognize reputable sources and content vs. misinformation and scams.
Finally, digital acceptance occurs when people trust digital technology and take steps to incorporate it into their lives.
It’s only when individuals and communities reach this level of digital inclusion that they are able to participate in the digital economy. Things they might do once they get to this point include:
● Use credit card information to make secure online purchases
● Access online resources including education or healthcare
● Communicate with friends, family, and colleagues online
● Research and apply for remote or hybrid professional positions
● Explore entrepreneurial opportunities online
The takeaway: Work focused on digital inclusion is critical to helping the digital economy grow.
How internet access expansion creates new digital economies
As the most foundational component of digital inclusion, internet access plays a key role in growing the global digital economy.
Success stories like Olivia Crabtree’s were previously improvable for communities and individuals living in underserved areas that lack internet access, satellite technology is helping create new opportunities through the power of connectivity.
The digital economy is vital to the creation of new ideas, products, services, innovations, businesses, and individuals who have much to contribute to our world.
This is at the heart of Viasat’s mission: to leverage our technology to help drive digital inclusion through connectivity.
Learn more about how Viasat is working to build greater digital inclusion worldwide.
