A mechanism for managing the factors that support the development of the cyber economy

Abstract

Purpose: The purpose of this chapter is to determine the factors that influence the development of the cyber economy, to evaluate their strengths, and to develop a mechanism to manage them in both developed and developing countries. Design/methodology/approach: The authors evaluate the influence of traditional (universal) factors of economic growth: institutional development, infrastructure, financial markets, and globalization. The resulting (dependent) variable is the digital competitiveness index. The influence of these factors is assessed with the help of the method of regression analysis based on the data of the IMD, KOF, and the World Economic Forum for late 2018/early 2019. The objects studied are the most developed economies (the G7) and the leading developing countries (BRICS). Findings: It is determined that the cyber economy is, in general, strongly influenced by the traditional factors of economic growth. However, it is shown that the external factor (globalization) has only a small influence on the development of the cyber economy, while institutional provision is the most important. Developing countries have less mature and effective institutions and therefore less favorable conditions than developed countries for the development of the cyber economy. Developing countries also lag behind developed countries with regard to other factors. Originality/value: In order to level the disproportionate development of the cyber economy in developed and developing countries, we developed a mechanism to manage the key factors that offers different recommendations for countries of both groups and reflects the general logic of managing the determined factors. The additional advantage of the developed mechanism is its potential for stimulating stability and active innovative development in the cyber economy.