Digital Transformation: Background, Trends, Risks, and Threats

Abstract

The modern world economy is characterised by the use of digital technologies as one of the factors of economic growth. Digital transformation creates new opportunities for development, but at the same time there are risks and threats to conventional economies. Therefore, the study of digital transformation is becoming particularly relevant. The purpose of this study was to reveal the essence of the term “digital transformation”, highlight its advantages and disadvantages, and analyse the process of digitalisation of the economy of Ukraine. During theoretical exploration, the following methods of scientific cognition were used: analysis, synthesis, observation, generalisation, classification. Theoretical assumptions were tested using analytical materials. Based on the analysis, conclusions were drawn, and practical recommendations were developed. In theoretical research, the differences between the terms “digitalisation” and “digitisation” were investigated. The main prerequisites for the spread of digital technologies are highlighted: the development of the physical infrastructure of internet access in the world, the growth of the number of internet users; the development of e-commerce; the development of the country’s IT industry; the improvement of the national e-government system. It was established that the main obstacles to the digital transformation of Ukrainian society are factors formed in the political, economic, technological, and psychological spheres. The dynamics of indices used to assess the spread of digital technologies is analysed: the e-Participation Index and the e-Governance Development Index. It was established that recently there has been a positive trend in them. The main advantages of implementing digital technologies were systematised. At the state level, the positive impact is manifested in improving the quality of life of the population; the level of productivity of public labour; reducing the share of hard work; preserving health and extending human life expectancy; simplifying access to information. The positive impact of digital technologies on the business environment is manifested in reducing the cost of selling products, searching and processing information, making transactions, launching and promoting goods to the market, the duration of the business cycle; inventing innovative technologies and switching to the production of innovative products. The advantages for individuals are to reduce the cost of internet services and transactions, simplify access to educational, entertainment and information resources. The main risks and threats created by the digital transformation of society are described: technological, economic, political, social, legal, and personal. The practical significance of the results obtained lies in the possibility of identifying and neutralising risks and threats of digitalisation.