The digital economy of 2024

Digital Economy 2024

At first glance, it may seem that the concept of the digital economy is somewhat strange, but the current global transformations – going back almost two decades – have pushed humans to greater innovation in various fields, especially what human knowledge has produced in the field of digital transformation. Which led to the emergence of what has recently been called: the digital economy, which we will review in this article. So keep reading.

What is the digital economy?

One of the basic concepts in the field of the digital economy is that it is an economic activity based on connecting people, companies, devices, and data – daily – via the Internet. It is an economy with many components: electronic devices, software, networks, and other digital mechanisms through which business operations are conducted.

So, the concept of the digital economy highlights the importance of the Internet, as it is a bridge towards strengthening this type of economy, which benefits the indicators of the national and global economies. Because of this importance, some have called the digital economy the “Internet economy” or “Web economy.”

Given this importance, international organizations have set out to measure indicators of this type of economy, as it is an economy that reflects global trends towards a digital future that takes sustainability as a goal and places the environment and its resources at the center of attention.

Sustainable Development Market

Among the reports that measure digital economy indicators around the world is the “Digital Economy Report,” which is issued every year by the United Nations Trade and Development Organization. The 2024 Digital Economy Report helped confirm the importance of digital transformation strategies. Because the production of digital devices has become a new burden added to the environmental burdens borne by developing countries. They export raw materials with low added value, while importing devices with high added value. The result in the end is digital waste that besieges the economies of these countries.

With this report, UNCTAD – the United Nations Trade and Development Organization – called for bold action, so that all countries can move towards a circular digital economy, with a focus on sustainable products, responsible consumption, reuse and recycling, and adopting sustainable business models. So that the future of the world becomes sustainable, environmentally and developmentally inclusive.

Regarding this UN report, Rebecca Greenspan, Secretary-General of the organization, said: “We must exploit the power of digital transformation, to promote comprehensive and sustainable development, while mitigating negative environmental impacts”; This is a statement that confirms the importance of increasing awareness about the digital economy in all countries of the world, especially developing countries that are a popular market for the trade of digital devices.

Examples of the digital economy

The digital economy is witnessing a remarkable development after the trade in smartphones has doubled – annually, and it is also witnessing an increase in the rates of trade in devicesInternet of Things – The Internet of things; This will be followed by significant growth in digital device commerce sales. All of this causes increasingly serious damage to the environment, with increasing rates of waste – for example – on screens and other technological equipment.

This type of trade produces greenhouse gas emissions, so much so that the ICT sector emitted about 1.6 gigatonnes of carbon dioxide equivalent in 2020, equivalent to 1.5% to 3.2% of global greenhouse gas emissions.

Metal Investment

If there is a boom in the trade of digital devices, this requires more mineral resources; Therefore, the demand for basic metals necessary for both digital and low-carbon technologies has increased, especially the metals: cobalt, graphite, and lithium. This is according to World Bank reports.

All of this has made obtaining vital minerals a priority for many countries in the world. Thus increasing global competition, as well as increasing the risks of geopolitical and economic challenges in a difficult market such as the digital devices market.

This difficulty lies in the fact that the increasing demand for minerals represents promising economic opportunities, but to make the most of these opportunities, countries need to advance in value chains, instead of just providing raw materials; So that its dependence on basic commodities does not become exacerbated; Which weakens its economy and prevents the benefits from reaching its local communities.

To address these environmental and social concerns, international cooperation, sustainable sourcing, and policy legislation that balance the needs of all stakeholders must be strengthened. Then supply chains can be stable and ethical when trading in vital minerals.

Environmental Footprint

In addition to the above, there are other concerns represented by our constant need for energy and water, and it is no secret that data center servers consume large amounts of electrical energy worldwide, a consumption that puts pressure on local electricity networks. In the United States – for example – reports indicate that one-fifth of the direct water footprint resulting from data center servers occurs because these centers need water resources, which raises concern in a planet where millions of people still do not have access to safe drinking water!

What is the solution?

In the previous paragraphs, we tried to answer the question: Why is the digital economy so important in the economies of countries around the world? Despite the role of the digital economy in economic growth – due to the increasing demand for digital products – the environmental footprint and erosion of resources are the most prominent results of the digital economy. The solution is evident in activating coordinated efforts between technology companies and policy makers. In order to improve energy efficiency and reduce water use in a sustainable manner.

In general, the concepts of environment and sustainable development do not go beyond the limits of our contemporary reality, which strongly raises the importance of considering the digital economy, as it is a serious step towards achieving the Sustainable Development Goals (SDGs). That is why you andthe Earth Guardsbe one hand.