Digital Economy and Its Role in Global Development

Abstract

The digital economy has emerged as a critical driver of global development, integrating advanced technologies into diverse sectors such as trade, labor markets, and public services. This study aims to evaluate the role of the digital economy in fostering economic growth, with a focus on its transformative impact across both developed and developing nations. A mixed-methods approach was adopted, combining case studies, comparative analysis, and data from global organizations like the World Bank and IMF. The findings reveal that countries with robust digital infrastructures, such as the United States and South Korea, experience substantial GDP growth, driven by innovation, productivity, and new market creation. Conversely, emerging economies face challenges like inadequate infrastructure and limited digital literacy but show promise through initiatives like mobile banking in India and Kenya. The study highlights the potential of digital tools in bridging economic disparities, emphasizing the importance of policies to enhance digital inclusion. The results underscore the dual nature of the digital economy: a pathway for significant growth and a source of challenges, including cybersecurity risks and job market disruptions. Recommendations are provided to optimize the benefits of digital transformation while addressing its inherent challenges.