DIGITALIZATION OF THE ECONOMY: DEEPENING THE ESSENCE OF BASIC CONCEPT

Abstract

It is a widely accepted view that the national economy of Ukraine is undergoing a transformation driven by the need to finally eliminate the features of a planned economy and to approximate the parameters of a market-based system. The protracted nature of this process is explained by complex accompanying circumstances, including the ongoing relevance of privatization, the unfinished land reform, unfavorable volatility in global markets, intensifying external competition, and social and political disturbances. At the same time, the objective fact is often overlooked that the economies of leading countries are not static; they are also subject to change, one of the key drivers of which is digitalization. This study aims to generalize and systematize contemporary approaches to understanding the concept of “digitalization,” with subsequent clarification of its content in both broad and narrow senses for characterizing processes occurring at the macro- and micro-levels. To deepen the understanding of the essence of the concept of “digitalization,” the following methods were employed: induction and deduction, comparison and systematization – when examining the essential characteristics of the terms “digitization,” “digitalization,” and “digital transformation”; synthesis and analysis – to trace and specify time periods that differ in the nature of digital technology implementation; morphological analysis – to refine the scope of application of the broad and narrow interpretations of the term “digitalization”; graphical methods –for the visual presentation of theoretical and methodological material; and the abstract-logical method – for theoretical generalizations and conclusions of the study. The expediency of interpreting the digitalization of the economy as a process involving the synchronous implementation of digital technologies in relation to individuals, businesses, society, and the state is substantiated, with the aim of creating a foundation for economic growth, more efficient use of resources, and the satisfaction of needs. The level of implementation of digital technologies is considered in relation to stages, where the first is digitization (the conversion of information into digital format in order to provide it with properties that enable more comprehensive and effective use in management processes); the second is digitalization (in a narrow sense – a process of expanding the scope of application and systematic updating of digital technologies to keep pace with technological progress, ensuring rational resource use and the achievement of set objectives); and the third is digital transformation (a process of rethinking the principles of internal structure and interaction with the external environment based on maximizing benefits and minimizing risks arising from the continuous use of digital technologies).