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The benefits and potential costs of a digital economy

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  • Lau, Lawrence J.

Abstract

Computerisation, or more generally, digitisation, of an economy has brought about substantial benefits. It has greatly increased productivity. It has significantly advanced both the pace and the scope of economic globalisation and international division of labour. However, digitisation can also enable, through the collection and assembly of individual-consumer-specific information, price discrimination by a seller of a product, which results in the consumer surplus of the buyer being appropriated. Moreover, the widespread use of email and other message application platforms operated by profit-making private enterprises also facilitates the collection and assembly of vast amounts of individual-consumer-specific private information without the explicit and specific consent of the individual consumer, information which can be used to his or her detriment. Possible remedial measures are proposed.

Suggested Citation

  • Lau, Lawrence J., 2023. "The benefits and potential costs of a digital economy," Telecommunications Policy, Elsevier, vol. 47(8).
    • Handle: RePEc:eee:telpol:v:47:y:2023:i:8:s0308596123001052
    DOI: 10.1016/j.telpol.2023.102594
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    References listed on IDEAS

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    1. Kevin J. Stiroh & Dale W. Jorgenson, 1999. "Information Technology and Growth," American Economic Review, American Economic Association, vol. 89(2), pages 109-115, May.
    2. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    3. Stephen D. Oliner & Daniel E. Sichel, 1994. "Computers and Output Growth Revisited: How Big Is the Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 273-334.
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    Cited by:

    1. Chong Zhang & Baoliu Liu & Yuhan Yang, 2024. "Digital economy and urban innovation level: A quasi-natural experiment from the strategy of “Digital China”," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    2. Yu, Hongyang & Wang, Jinchao & Xu, Jiajun, 2023. "Assessing the role of digital economy agglomeration in energy conservation and emission reduction: Evidence from China," Energy, Elsevier, vol. 284(C).
    3. Suo, Xuekun & Zhang, Longting & Guo, Rong & Lin, Han & Yu, Mingchuan & Du, Xiuhong, 2024. "The inverted U-shaped association between digital economy and corporate total factor productivity: A knowledge-based perspective," Technological Forecasting and Social Change, Elsevier, vol. 203(C).
    4. Julio Vicente Cateia & Luc Savard, 2025. "Trade and distribution in Guinea-Bissau: A computable general equilibrium analysis," International Economics and Economic Policy, Springer, vol. 22(1), pages 1-30, February.

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    Keywords

    Digital economy; Benefits; Costs;
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