{"id":23089,"title":"Digital Economy: How is digitalization changing global competitiveness and economic prosperity?","link":"https:\/\/bst-europe.eu\/de\/globalization\/digital-economy-how-is-digitalization-changing-global-competitiveness-and-economic-prosperity\/","date":"13. September 2019","date_unix":1568378460,"date_modified_unix":1666393181,"date_iso":"2019-09-13T12:41:00+00:00","content":"<p><strong>Digital Economy<\/strong>: In several articles we have shown what consequences <strong>digitalization<\/strong> can have for the labor markets of <a href=\"https:\/\/bst-europe.eu\/blogpostsen\/robots-taking-over-jobs\/\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" >developed economies<\/a>, what influence digital technologies might have on the cross-border relocation of <a href=\"https:\/\/bst-europe.eu\/allgemein-en\/what-is-the-impact-of-reshoring\/\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" >production sites<\/a> and how<a href=\"https:\/\/bst-europe.eu\/allgemein-en\/how-3d-printing-technology-could-change-world-trade\/\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" > 3D printing technology<\/a> could change world trade.<\/p>\n<p>This article deals with the question of how digitalization can change the <strong>international competitiveness<\/strong> in the entire world economy in the future &#8211; and thus also the <strong>material prosperity of the people.<\/strong><\/p>\n<h2>How does digitalization change production processes?<\/h2>\n<p>Almost all economists agree that digital <strong>technologies<\/strong> will become increasingly important for production processes in the future. It can therefore be assumed that production processes will become increasingly capital- and technology-intensive over time &#8211; not only in developed economies, but worldwide.<\/p>\n<p>The increasing capital and technology intensity of production has an impact on the international competitiveness of all countries in the world (see figure 1):<\/p>\n<ul>\n<li>When human labor is increasingly used by robots, computers and machines, the labor-intensive developing countries <strong>lose their decisive competitive advantage<\/strong>: cheap labor.<\/li>\n<li>At the same time, the competitive situation of rich industrialized countries is improving be-cause they are better able to finance the costs of digital transformation.<\/li>\n<\/ul>\n<p><a href=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2.jpg\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\"  target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23100 size-large\" title=\"Digital Economy\" src=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-1024x569.jpg\" alt=\"Digital Economy Impact\" width=\"1024\" height=\"569\" srcset=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-1024x569.jpg 1024w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-300x167.jpg 300w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-768x427.jpg 768w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-600x333.jpg 600w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-1536x853.jpg 1536w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-2048x1138.jpg 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<h2>Digital Economy: How does digitalization change the competitiveness of individual economies?<\/h2>\n<p>In the future, the international competitiveness of individual economies will depend crucially on <strong>how quickly<\/strong> digital technologies are used in production processes. This digital transformation in turn depends on whether a country has the necessary resources for this transformation.<\/p>\n<p>The resources available depend largely on the level of economic development achieved. As a rule, this is measured by the level of real gross domestic product (GDP) per capita. With this indica-tor, the world can be divided into three groups of countries &#8211; exemplarily and roughly simplified &#8211; (see figure 2).<\/p>\n<h3>1 Western industrial economies<\/h3>\n<p>If we look at the current situation of GDP per capita, the <strong>western<\/strong> industrialized countries have the <strong>highest<\/strong> per capita income.<\/p>\n<ul>\n<li>If these countries succeed in promoting the use of digital technologies, they will become <strong>even more competitive<\/strong>. The result will be a further increase in GDP per capita. This includes the U.S. in particular.<\/li>\n<li>Those industrialized countries that <strong>fail the digital transformation are losing competitiveness.<\/strong> This applies to economically weak countries that are also heavily indebted, such as Greece and possibly Italy. Ageing societies can also fall into this group of countries because the innovative power and productivity of an ageing society tends to be lower.<\/li>\n<\/ul>\n<h3>2 Asian emerging economies<\/h3>\n<p>Many emerging Asian economies have experienced strong economic growth over the past two decades. They therefore have the financial resources for digital transformation. This applies not only to China, but also to other Asian economies such as South Korea, Indonesia, Thailand and Taiwan.<\/p>\n<h3>3 African developing countries<\/h3>\n<p>A mixed picture arises with a view of <strong>Africa<\/strong>:<\/p>\n<ul>\n<li>On the one hand, African countries have a young and growing population. If these countries succeed in building a digital infrastructure and promoting the education sector, strong <a href=\"https:\/\/bst-europe.eu\/allgemein-en\/yes-there-can-be-demographic-dividends-with-an-aging-population\/\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" >economic growth<\/a> can result.<\/li>\n<li>Some of these countries may even be able to skip a technology step. Economists call this <a href=\"https:\/\/en.wikipedia.org\/wiki\/Leapfrogging\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" >leapfrogging<\/a>. For example, a country that does not yet have a landline for telephony is setting up a mobile network and is therefore on the same technological level as an industrialized country.<\/li>\n<li>On the other hand, it becomes problematic for poor, underdeveloped economies that have no valuable raw materials and no access to the capital market. They are in danger of being left even further behind in economic terms because they are losing competitiveness.<\/li>\n<\/ul>\n<h2>Digital Economy: Changing competitiveness and the distribution of global wealth<\/h2>\n<p>The international competitiveness of a country is crucial for the prosperity of its people. If an economy is competitive, domestic companies can sell their products at home and abroad. This secures jobs and generates income for employees.<\/p>\n<p>With improved competitiveness, the country can produce more goods and services and thus increase GDP &#8211; and GDP per inhabitant. Global prosperity is being redistributed: A successful digi-tal transformation increases people&#8217;s prosperity. In countries that fail to do so, GDP per inhabitant falls.<\/p>\n<p>The <strong>digital transformation<\/strong> of one&#8217;s own economy thus becomes a prerequisite for securing and improving a country&#8217;s prosperity.<\/p>\n<p><a href=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2.jpg\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\"  target=\"_blank\" rel=\"noopener\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-23100 size-large\" src=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-1024x569.jpg\" alt=\"Digital Economy Impact\" width=\"1024\" height=\"569\" srcset=\"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-1024x569.jpg 1024w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-300x167.jpg 300w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-768x427.jpg 768w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-600x333.jpg 600w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-1536x853.jpg 1536w, https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/FIGURE-2-2048x1138.jpg 2048w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><\/p>\n<p><strong>Reading recommendation<\/strong>: The effects of digitalization and international division of labor are analyzed in more detail in our <a href=\"https:\/\/bst-europe.eu\/research\/studies\/the-bigger-picture\/\" target=\"_blank\" aria-label=\"\u00d6ffnet in einem neuen Tab\" >megatrend report \u201cThe Bigger Picture\u201d<\/a>, published last week. The report examines the central interactions between the megatrends of <strong>globalization<\/strong>, <strong>digitalization<\/strong> and <strong>demographic change<\/strong> and their effects on people\u2019s employment and income opportunities.<\/p>\n","excerpt":"<p>How can digitalization change the international competitiveness in the entire world economy in the future &#8211; and thus also the material prosperity of the people?<\/p>\n","thumbnail":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/artificial-intelligence-automation-bookcase-1329068.jpg","thumbnailsquare":"https:\/\/bst-europe.eu\/wp-content\/uploads\/sites\/24\/2019\/09\/artificial-intelligence-automation-bookcase-1329068.jpg","authors":[{"id":312,"name":"Thie\u00df Petersen","link":"https:\/\/bst-europe.eu\/blogger\/dr-thiess-petersen\/"}],"categories":[{"id":152,"name":"Globalization","link":"https:\/\/bst-europe.eu\/category\/globalization\/"}],"tags":[{"id":278,"name":"digital economy","link":"https:\/\/bst-europe.eu\/tag\/digital-economy\/"},{"id":185,"name":"digitalization","link":"https:\/\/bst-europe.eu\/tag\/digitalization\/"},{"id":230,"name":"Digitization","link":"https:\/\/bst-europe.eu\/tag\/digitization\/"}]}