ISBN: 978-93-94174-93-1

Economic Transformations Driven by Digitalization: Opportunities and Challenges

¹Associate Professor and Head, Department of Economics, Government Arts College for Women, Salem -636008, India

Guest Lecturer, Department of Economics, Government Arts College, Chidambaram, India

Digitalization, characterized by the widespread adoption of technologies such as artificial intelligence, cloud computing, and big data analytics, is fundamentally reshaping global and regional economies. This paper examines the multifaceted impacts of digitalization on economic structures, focusing on productivity, labor markets, income inequality, and sectoral transformations. Using a mixed-methods approach, including econometric analysis of global and Indian economic data and case studies of digital adoption in sectors like fintech and e-commerce, the study reveals significant productivity gains alongside challenges such as job displacement and the digital divide. Findings highlight that while digitalization drives economic growth and innovation, it exacerbates inequalities, particularly in developing economies like India. The paper proposes policy recommendations, including investments in digital infrastructure, digital literacy programs, and inclusive strategies to bridge the digital divide. By analyzing global trends and India’s Digital India initiative, this study contributes to understanding how digitalization can foster sustainable economic development while addressing its socioeconomic challenges.

*Corresponding author; e-mail: c.gomathisubu@gmail.com; Sathyaeco2015@gmail.Com

Cite this Chapter: Gomathi, C. and Sathya, S., 2025. Economic Transformations Driven by Digitalization: Opportunities and Challenges. In: Dr. Lubna Suraiya Dr. P. Kanchana (Eds.). Commerce Reimagined: The Future of Trade and Transactions. Excellent Publishers, India. pp. 151-161. doi: https://doi.org/10.20546/978-93-94174-93-1_10