The role of digitalization in economic development

Abstract

Digitalization of the economy is a process of structural transformation in which digital technology and information are used to enhance many aspects of economic activities, from public administration to health, education, and operations within businesses. The reason for doing so lies with the rapid development of ICT, which has totally changed the way consumers interact, firms are organized, and production is carried out. While the use of digital technologies such as the Internet, artificial intelligence, and blockchain has already been widely recognized as crucial in optimizing economies, only a small amount of research focuses on the impact of digitalization in developing economies, including Azerbaijan. Thus, in this paper, an attempt is made to analyze the influence of digitalization on economic development by focusing attention on the example of the Republic of Azerbaijan and further investigate how the implementation of information and communication technologies in this country has been a key tool for its economic development. The research reveals that digitalization serves as more than just the application of digital technologies to economic processes; it functions as a powerful catalyst for increasing productivity, optimizing resource allocation, and creating new development opportunities. These findings underline that digitally enabled transformation is of strategic relevance to achieve economic growth and underline, therefore, that ICT infrastructure development promotion and digital integration in most economic sectors become one of the top priorities of policy makers to advance economic competitiveness and sustainability.