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Impact of Digital Transformation on Governments and the Economy

Digital TransformationDigital transformation has become one of the topmost priorities of every organization in all industries and this has increased the demand for outsourced solutions such as document scanning services. Emergence of digital transformation has a profound impact on the productivity and socio-economic standards of the society. Evolution of technology and associated information and knowledge help establish society’s production capacity and standard of living which are decisive to the economic growth of the nation. Digitization has the power to transform the overall aspects of an economy.

Today, it is crucial that leaders articulate and deliver on a clear vision for comprehensive growth, one that accounts not only for tax and trade policy but also focuses on digital transformation. Companies worldwide have transformed with advanced digital technologies, and now people are looking forward for governments to adopt digitization. There is no doubt that governments can provide services that meet the evolving expectations of their citizens and businesses via digitization. India, for instance, is implementing a strategy that is transforming the country into a technology powerhouse and setting the stage for a digital future. Similarly, other countries are also embracing robust digital strategies. While it is true that technology and digitization are a force for economic growth, these can also aggravate political, social and economic instability. This aspect is discussed in a write-up on Born2Invest.

  • Advanced Technology and Automation Could Reduce Job opportunities
    Technology may have a part to play in issues such as economic troubles and shortage of jobs. The number of manufacturing jobs available has gone down but the manufacturing output in the US has continued to increase over the past ten years, as global investor Vikram Mansharamani points out. Globalization could be one of the reasons for the lack of jobs but the basic reason, he says, is that technology has a greater impact on jobs in the world environment. Automation that is being increasingly adopted naturally reduces job opportunities in factories and other manufacturing environments.
  • Instability in the Economic and Political Sectors
    Geo-political strategists such as Peter Zeihan attribute the success of the digital revolution to the availability of capital from the Baby Boomer generation. However, as this demographic group reaches retirement age, this capital available will shrink drastically. This could pose problems because the advancements of the digital revolution have been maintaining the economic structure. There could be significant breakdown in the economic and political systems when the source of capital available dries up.
  • Instability at the Governmental Level
    Digitalization offers great opportunities for governments worldwide allowing them to enhance services, save money, and ensure citizens a better quality of life. However, according to Ian Bremmer of the Eurasian Group, in countries such as the Middle East with autocratic rulers who rely on privacy and lack of information circulation to maintain absolute power, digital initiatives could increase political instability. Along with digitization comes transparency that such governments do not want to entertain. Another aspect of digitization is the greater connectivity offered via technology and social media. It allows people of similar mindset to organize and move against the government. This could trigger instability.

What Can Governments Do to Optimize Technology and Address Concerns?

Digital TransformationDigitalization in all sectors can raise global income levels and improve the quality of life for people worldwide. Technology has made life much easier and pleasant for consumers who can now order a cab, make payments, watch films, listen to music or even play games remotely. Experts predict that technological innovations can provide long-term gains in efficiency and productivity to governments and businesses. However, as discussed above, the digital revolution could also result in disruption of labor markets with more workers being displaced by machines. On the positive side, this could also lead to an overall increase in safe and rewarding jobs that involve less manual and risky work. You can’t turn your back on digitalization that offers both opportunity and instability. Governments therefore need to find better ways to meet current challenges and keep up with the digital expectations of the citizens. It helps to improve their interactions with citizens and businesses. Digitization and big data help to streamline data and help defence, public safety, healthcare and other sectors. The digital transformation of a government can be challenging, but many public institutions have discovered that it is ultimately rewarding.

The survival and success of government systems and other entities depend on their ability to adapt to the changes that are inevitable. This would involve a “re-invention” of themselves so that they can truly understand what the consumers and general public really want and adopt suitable measures to meet those requirements.

About Rajeev R

Rajeev R

Manages the day-to-day operations of MOS from NY. With an interest in information technology, Rajeev has guided MOS to extensive use of digital technology and the internet that benefits MOS as well as MOS clients.