The digital economy as a tool for the sustainability of the growth of distribution and communication

Abstract  

We follow the irreversible development of significant changes in the field of digitization, e-commerce, robotics, the Internet of Things, artificial intelligence, but also in others. The digital economy is being pushed out by the digital economy. We are witnessing the forced restructuring of economies in order to ensure competitiveness. The question arises as to whether the tools used are of sufficient quality and efficiency. To what extent can they rally on the results of existing tools in business, public administration, but also in improving people’s lives? The main goal of this paper is to analyze the existing tools for measuring the progress of digitization. Our wildlife research has also focused on the distribution of intangible products in pandemic conditions. Selected scientific research methods, such as public opinion polls, selected statistical methods, analytical, comparative and synthesizing methods and other procedures resulting from the study of the already mentioned environment, processes and phenomena, were used in the acquisition, processing and analysis of data

JEL classification:  M15,  C43.

Keywords: Digitalization, analysis of main components, correlation of selected indicators.

Introduction

Globalization creates a new market environment with new opportunities and risks for individual economies. In particular, if countries wish to mitigate the effects of the pandemic crisis, they must restore consumption and demand. This task is not easy. For several years now, we have been following the irreversible development of significant changes in digitization, e-commerce, robotization and others. The traditional economy is displaced by the virtual /digital/  economy. We are seeing a forced restructuring of economies to ensure competitiveness.  The level of digitization has only been measured for a few years. Logically, the question arises as to whether the tools used are of sufficient quality /effective/ and effective. To what extent can the results of existing instruments be linked to business, public administration, but also to improving people’s lives? The main goal of this paper is to analyze the newly measured / existing / tools for measuring the extent of digitization. Selected scientific research methods were used in data collection, processing and analysis. For example, opinion polls, selected statistical methods, analyzes, comparisons, synthesis and other procedures for examining the environment, processes and phenomena.

State of play of the investigation

Digitalization gradually affected competition in global markets. Shoppers can reach different retailers from all over the world online and vice versa. They can significantly expand their range and reduce purchase time. Companies with the most interesting offer are growing. Digitization therefore increases the tendency towards flexibility and consumer orientation. Literature combines progress with developments in digital technologies to facilitate international entrepreneurship. [19] Digital technologies simplify and speed up access to information. They allow communication over long distances at real time. Digitization refers to the ongoing adoption and application of digital technologies by an online company. [17]   Studies highlight the positive effects of combining global business competences and performance enhancements. [14] This study responds to calls for further research into the impact of digitization. Corporate survival strategies perceive global risks and respond flexibly to global opportunities. However, not every company has the skills and capabilities to operate in a global market. International trade competences are prerequisites for success. The digitization of the business environment enables these firms to promote and sell their products at a price offered and acceptable. This mechanism does not work without digital skills. [8] Today we can already see the impact of digitization of processes with the impact of technological turbulence. [12] Various industries and markets are digitized at different rates. The degree of digitization affects the company’s ability to operate in the global market, despite having competence in international trade. Digitization facilitates knowledge acquisition and improves business networks. It creates a new business environment. [1] International business competences and relationships, business deployment, international experience and knowledge, digital network, digital skills and experience, innovative experience and capabilities are a prerequisite for success. Technological changes require a favorable business environment. [18]. Digitization is therefore seen as an opportunity for a small firm to enter the international market. Given the cost of adopting digital technologies, the digital transformation requires significant investment. SMEs have limited means of trial and error; Understanding the impact of digitization is essential for results-based decision-making. Firms under pressure from competition for transparency and market liberalization tend to expand their market for growth and survival. [15] Studies to examine digitization are targeted in general. Specific digital solutions are rather specific in nature.  [5]    Have found positive impact of digital technology on the marketing capabilities of the company. A positive combination of marketing skills with international performance has been demonstrated. [4] Businesses with high marketing capabilities can develop a marketing strategy that meets customer requirements. This ability is especially important when the company plans to enter the new market quickly. Digital technology through an online platform has significantly reduced the cost of traditional marketing. Many companies use digital tools such as Ecommerce Alibaba, Facebook, Instagram, YouTube, Google Search Engine, etc., to promote their products and services around the world.  [2] Marked digitization affecting business models through innovation activity, strategy and specific technology. Intangible resources then become a central factor in digitization and are an important determinant of their success. [13] The impact of digital skills on digitization processes has not been sufficiently discussed in literature. Empirical findings have shown that businesses are initially in high-tech sectors. The digitization of processes and the supply chain between traditional industries also creates opportunities for new firms. [7] Small and medium-sized enterprises with a strong emphasis on digitization are more successful. In practical terms, companies must operate in an industry or market strongly affected by digitization in order to benefit from lower promotion and distribution costs. A company operating in a less digitized space needs to build significant resources and business networks slowly and is therefore in a less disadvantageous position.  [6] Strong relationships with local authorities, investors, business partners, suppliers, distributors, customers and multinationals can help the world to create sustainable competitive advantages. [3] So that the originally proposed global companies with poor access to economies of scale and lack of financial and knowledge resources can overcome constraints through networks and alliances. They suggested using a personal network, collaborative partnerships, client tracking, the use of advanced technologies, and multiple input methods.  With official networks affect the performance of the company. [10] The Track partnership is one of the main distinguishing features in growing global growth patterns, regardless of the type of industry. Itis also a source of new knowledge for smaller global firms. The network enables native global sources of additional resources and capabilities that the company does not have, by outsourcing tasks to reliable alliances. The company found that access to external technologies through licenses is one of the types of relationships positively linked to the export intensity of these firms. Literature is also devoted to defining the content of terms used, e.g. digital capability is a company’s ability to apply digital technologies to create value. Digital capacity covers more than the flow of information and the flow of communication.  [16] Born GlobalX’s ability to adopt digital technologies such as the Internet, digital marketing tools, e-commerce, big data, the Internet of Things, cloud computing, etc. in the world. [9] The company has digital capabilities, can use digital technologies to optimize its processes, support the creation of new products or services or to further promote connection with business partners in its network. [18] Digital products and services are more versatile. They may be intangible in comparison with traditional products. Then they need tangible packaging only in the case of the forms of distribution taken. Digital technologies such as automation, cyber system, etc. help businesses optimize their productivity. The introduction of automation is aimed at increasing quality and production capacity. However, the rationale for investing in automation and technology availability depends on a functioning ecosystem, customer preferences and the analysis of competitors. Digitalization of innovation increases the company’s ability to develop innovative products and increases the speed at which they are marketed. Several empirical findings confirm the contribution of innovation to the company’s performance. [1] The intensity of the innovation capability allows the company to keep at the forefront of innovators, which generates synergies in performance.

The findings showed that high-tech businesses have a high-end digitized system in their supply chain activities. Access to external technologies through licensing generates synergies in less time. Some digital systems are universal and others are specific. They are tailor-made for a particular entity. Businesses with minimal knowledge, skills and information use education and licensing to bridge differences in the level of mastery of the digitization process. [16] It has therefore been found that learning ability is positively linked to international performance. [1] Among firms with the ability to learn, the availability of online knowledge sources determines the speed at which knowledge is acquired. The transaction, process, product, service will be realized significantly faster.

Research Methodology and Methods

The main objective of this contribution is to analyze the perception of selected instruments for measuring scale /pace/ digitization in relation to competitiveness, R&D costs and GDP generation and internet connectivity. We obtained research data online. We statistically processed respondents’ perceptions of the Digital Economy and Society Index.  Data on the development of GDP, science and research were discussed with databases of the National Bank of the Slovak Republic and the Statistical Office. We examined the dependencies of the above parameters on the development of the level of digitization.  Our research question is whether to confirm the correlation. We have used recognized, general scientific methods to achieve the objectives set. Empirical methods, in particular observational methods and controlled interviews, were used to obtain information in the study of literature. The information is accompanied by observations of phenomena from different angles. In this respect, it used a comparison method. In processing the information received, a systemic approach has been applied as a general investigation methodology and allows the phenomenon of partial problems to be disseminated without disturbing the overall context and links. This approach allows for a comprehensive study of selected objects. In addition to the alleged methods, generally accepted methods of scientific research were also used, in particular basic and most commonly used methodologies such as analysis and synthesis. The analysis was used to identify links between parts of a whole, their complementarity and impact. Synthesis, which compared to the analysis of the reverse phenomenon. This allowed us to formulate generals.

Result of the Paper and Discussion

We consider digitization to be one of the most important processes. It’s probably not possible to avoid it. Rather, it is important not to stay in this process. Comparison of Slovakia’s performance with other Member States of the European Union in a wide range of areas is provided by the Digital Economy and Society Index, DESI. The score /position/ of each country is evaluated annually by the European Commission. The level of progress in the digital economy and the digitization of society in the Member States is established on the basis of a number of digital performance indicators in several main measurement areas: connectivity (25 %) Fixed and mobile broadband and broadband prices, human capital (25%) Internet use, basic and advanced digital skills, use of Internet services (15%) Citizens’ use of internet content, communication and online transactions, integration of digital technology (20%) Business informatics and e-commerce, digital public services (15%).

The objective of the evaluation of the index is to compare the performance of countries and, in particular, to help identify areas requiring investment. It is possible to assess progress in digital development. Digital Transformation Strategy of Slovakia 2030. Slovakia still belongs to the group of countries with poor results together with other countries /Bulgaria, Cyprus, Greece, Croatia, Hungary, Poland, Romania and Italy o/. The convergence of these countries to the average level of R&D intensity in the EU was partly due to the increased use of the European Structural and Investment Funds for research and innovation activities. Nevertheless, the R&D intensity in these countries was still almost twice as low as the overall R&D intensity in the EU. Finland, Sweden, Denmark and the Netherlands are significant exceptions to the increase in R&D intensities. Finland, which was a leader in R&D intensity in the EU in 2008, has seen a fall below 3.0% of GDP by 2017. Today, however, it is at the forefront of digitization in Europe. In the literature, we are particularly concerned with digitization analyses focusing on business performance. Our analysis of digitization in relation to competitiveness, R&D costs, GDP generation and internet connectivity focuses on the effectiveness of digitization measurement tools. We obtained research data online. We statistically processed respondents’ perceptions of the Digital Economy and Society Index:

Table 1

Source: self processing

The correlation analysis confirms the dependence of the development of the DESI index on the elasticity of R&D /0.49/ and GDP development /0.4849/. The development of competitiveness confirms the dependence on connectivity /0.4093/, R&D elasticity /0.5035/ and GDP development /0.4995/. R&D elasticity confirms dependence on R&D /0.5538/ on GDP development /0.9986/ and on internet connectivity /0.9040/. In research and development it confirms dependence with a range of connections /0.7669/ and GDP growth /0.533/. The correlation analysis also confirms the dependence of internet connection development on GDP development /0,8879/.

Discussion and Conclusion

For several years now, we have been following the irreversible development of significant changes in digitization, e-commerce, robotization and others. The level of digitization has only been measured for a few years. Logically, the question arises as to whether the tools used are of sufficient quality /effective/ and effective. The results of our research suggest a lack of correlation to competitiveness.

Physical distribution identifies an existing situation, monitors the environment, and identifies potential opportunities and threats. Some manufacturers are also distributors. However, most manufacturers do not supply their products directly to the final consumer and use the services of distribution intermediaries/brokers, distribution assistants. Wholesalers, retailers, publishers and others form a distribution channel. The decision to choose a distribution channel depends on various factors. Depending on the nature of the product and processes, intermediaries perform various tasks in the distribution process. From this can be derived the typology of distribution channels. Direct distribution path / distribution of the manufacturer directly to the consumer. It carries out all distribution activities at its own expense and risk. In the case of copyrighted works, this situation depends on the product. Indirect distribution channel / manufacturer in the implementation of its products engages one or more entities /. These entities partially or completely assume production and distribution activities / costs, risks and often participation in copyright, except for personality rights. The choice of distribution channel is determined by several factors: the size of the target market, the specificity of the target market, the characteristics of the product, the cost of production and distribution, the economic potential of the author, the producer, the consequences of the pandemic, sustainability, new technologies, the movement of copyright works in the digital space, the position of the author, new protection requirements and others.

Slovak, European and world legislation regulates the rights of the actors involved and the relations between them. Emphasis is placed on: a high level of protection, settlement of rights, creation of a framework for the use of the work, other objects of protection, stimulating innovation, creativity, investment, production, distribution including in the digital environment, new business models, new entrants, access to content, access to research, innovation, education and heritage protection. Consideration is being given to introducing/extending/mandatory and optional exemptions for the use of technologies for the collection of text and data, for teaching purposes and for the protection of cultural heritage in the digital environment. Existing exceptions and limitations in Union law should continue to apply as long as they do not limit the scope of the mandatory exemptions. Exceptions and limitations are intended to ensure a fair balance between the rights and interests of authors and other right holders, on the one hand, and users, on the other. They may be applied only in cases where they do not conflict with the normal use of works and do not unreasonably prejudice the legitimate interests of right holders.

The exercise of property rights depends on the authors and owners of rights in the works. Decisions to distribute the work are the right of the author / original owner /. By exercising his personal rights.This decision is conditional on many factors. The distributor shall choose a direct or indirect distribution route. Indirect distribution is associated with the transfer of part of the ownership rights to third parties. The manufacturer, seller, distributor, broadcaster of works shall have partial and temporary rights to use the rights to the work in the form of licenses or sub-licenses. A license may be granted to authors for one or more uses, so that the specific use of the work in the license agreement must be well defined. “The author may grant the user permission to sub-license third parties if the author agrees to further use the work in the license agreement. Royalties for the use of the work may be agreed on a flat-rate basis. They may also be identified as a proportion on an agreed basis. Interested parties may also agree on a combination of these options. An indirect form of distribution can be linked to a complex system of entities and relationships.  The involvement of new digital/intelligent/distribution platforms makes this system more complex and opaque. Direct distribution of works is now possible mainly due to the rapid development of various digital technology platforms. However, the use of these platforms is linked to a number of insecurities in securing distribution channels and new licensing methods for granting property rights to third parties. We also examined the correlation of selected parameters to identify the correct indicators to measure the effects of research results. We found a correlation between research spending, employment, turnover, wages and bonuses. The current situation has affected virtually the whole world. Innovation has inevitably focused on digital technologies. They are radically promoted in all areas of business and life. They have caused radical innovations in the distribution of works. These innovations and related changes create significant challenges for copyright actors and relationships. So far, we have not seen any action by the regulator in this area. New phenomena, entities and relationships are emerging. The position of authors in securing their rights is constantly deteriorating. This situation is unsustainable in the future.

Enterprise research activities can be partially identified in the register of intangible assets. Purchased results of external research activities are also problematic at the company’s expense. Generally accepted scientific research methods have been used, in particular basic and most widely used methodological procedures such as analysis and synthesis, deduction and induction. The research also used a method of purpose analysis – a questionnaire survey which focused on a selected sample of Slovak companies. The data was obtained by an own survey of respondents representing selected enterprises doing business in the Slovak Republic. In the questionnaire, we formulated a number of questions in order to obtain evidence to achieve the research objective. The owners took over the research share 10% and the managers took over 15%. Owners do not consider the estimate of the share to be significant and managers believe that the research evidence is 5% lower. They therefore claim that the evidence is inconsistent with reality. The average value of the range of research activities is M = 7 492; standard deviation SD = 10,9. Minimum value Min = 0, maximum Max = 50. The scale was filled in by 238 respondents. We also examined the correlation of selected parameters in order to identify the correct parameters (indicators) to measure the effects of the research results realized. We found a correlation between research spending, employment, turnover, wages and rewards.

Acknowledgement

The contribution is the output of the scientific project VEGA MINISTRY of The Slovak Republic No. 1/0708/20 “Socio-economic determinants of sustainable consumption and production in terms of impact on the performance and competitiveness of enterprises”

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Contact

Ing. Matušovič Martin, PhD.

University of Economics in Bratislava

Faculty of Business Management

Department of Business Economy

Dolnozemská cesta 1/b

852 35 Bratislava

Slovak Republic

e-mail: martin.matusovic@euba.sk

RECENZENTI:
PhDr. Peter Veselý, PhD., MBA
Univerzita Komenského, Fakulta managementu

Ing. Jaroslav Vojtechovský, PhD.
Univerzita Komenského, Fakulta managementu

VYDANIE:

Digital Science Magazine, Číslo 1, Ročník VII. ISSN: 1339-3782

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