The digital ecosystem plays a key role in the development of the digital economy and the formation of a post-industrial society. In recent decades, there has been rapid progress in technology, leading to the transformation of traditional business models. An important aspect of the digital ecosystem is the growth of data volume. This creates new business opportunities such as big data analytics and machine learning, which contribute to increased productivity and innovation. The amount of data created and consumed in the digital ecosystem is rapidly increasing. The world’s data is expected to reach 175 zettabytes (1 zettabyte = 1 billion terabytes) by 2025, up 61 times from 2018, according to an IDC report. This data explosion is driving the growth of data processing and analytics technologies.
Also an important trend is the growth of multichannel retail. With multichannel retail, businesses can offer a seamless shopping experience across multiple channels, such as e-commerce websites, social media, mobile apps, and physical stores. This approach helps businesses meet the needs of their customers who expect to be able to shop through their preferred channels. An example of a successful digital ecosystem is the US experience. Tech giants like Amazon, Google, Apple and Facebook (banned in Russia; owned by Meta Corporation, recognized as extremist in the Russian Federation), have become engines of digital progress, creating interconnected platforms and services. This has boosted the economy, as well as high-tech employment, and increased their global influence. Amazon is a great example of the omnichannel retail business, combining its physical and digital retail operations to ensure uninterrupted customer service. Customers can shop online, in-store or via Amazon’s mobile app, and the company offers a variety of delivery and pickup options. The company also used its extensive data to personalize customer service and create targeted marketing campaigns. This has allowed Amazon to become one of the most successful retailers in the world.
One of the key trends in digitalization is the increasing use of mobile devices. In 2022 alone, about 1.21 billion smartphones were shipped in the world, even given the decline in sales relative to 2021. In total, there are about 5.3 billion mobile phone users in the world, which is equal to 67% of the global population. For comparison, in 2022, only 310 million personal computers were shipped, and the share of households in the world with at least 1 personal computer at home in 2019 was 47.1%. Thus, the shift in the development of programs towards mobile applications looks quite reasonable: with the increasing availability of smartphones and tablets, more and more people are using these devices to view the Internet and make online purchases. As a result, e-commerce companies are increasingly focusing on developing mobile-friendly websites and apps to meet the growing user base.
E-commerce’s share in 2022 was about 19% of retail sales globally. Online trading is projected to account for about 25% of total global retail sales by 2027. Online shopping has steadily grown in popularity in recent years. In 2021, global online retail sales amounted to almost $5 trillion, and by 2025, this figure is expected to exceed $7 trillion. During the COVID-19 pandemic, there was a boom in digital development in Latin America, which led to an unprecedented increase in e-commerce in various countries of the world. Therefore Brazil and Argentina appear to be leading the world’s fastest-growing online trading markets. These statistics highlight not only the growth of the digital ecosystem, but also its impact on the economy and society, confirming the need to implement digital strategies actively in various regions.
Artificial intelligence (AI) and machine learning (ML) are also drivers of digitalization trends in e-commerce. With AI and ML, companies can gain valuable insights into customer behaviors and preferences, allowing them to personalize and target their marketing efforts more effectively. AI and ML can also help e-commerce companies automate various processes such as inventory management and fulfillment of orders, resulting in improved efficiency and lower costs. Russian companies have stepped up efforts to create and implement new digital solutions, nearly doubling the cost of R&D in digital technologies. A high annual increase was observed in spending on digital content (+ 46.5%) and software (+ 8.5%).
The digital ecosystem has radically transformed business processes and information sharing. Previously, limited data processing capabilities slowed business decision-making. With the development of digital technologies, including cloud computing and big data analytics, powerful tools have emerged to provide fast and accurate analytics. This allows the business not only to use the data more efficiently, but also to make meaningful decisions based on their analysis.
The digital ecosystem also supports business globalization. Companies can interact globally, reaching customers through online platforms and social media. This promotes competition, stimulates innovation and strengthens the influence of business on the global stage.
Thus, the digital ecosystem has become a catalyst for more flexible, efficient and competitive business models, creating favorable conditions for the development of the digital economy and post-industrial society.
By Natalia Savina, PhD (Economy), Associate Professor, Department of World Economy, Russian University of Economics named after G.V. Plekhanov