Development of the Digital Economy in the USA and China: Factors and Trends

Abstract

Complex research of the “digital economy” in the U.S.A. and China –undisputable leaders of the phenomena – appears to be an important research task. This article is focused on identifying its` key factors and developmental trends (also important for understanding global processes). Growing economic impact and dominance of the U.S.A. and China in the “digital economy”, especially on the Internet markets, is confirmed – with special attention to the extra-large platformic companies. Analyzing the history of the “digital economy” in both nations primacy of market success factors is stated – while stressing important role of technological specifics in shaping trends. For the U.S.A. the key drivers were meeting existing demand on the traditional markets with fundamentally new technological products, as well as formation of new markets to address existing latent demand. For China originally it was inability of the service sector to address growing internal demand, which supported strong growth of internet markets as a fast and cheap alternative (using localized western technologies and business models). Sizable market, governmental support, and later strong investments in technology and innovation determined China`s leadership in the digital economy– with overcoming the U.S.A. in some areas. In conclusion, it is noted that the importance of original digital economy drivers (U.S. technological superiority, China`s huge growing market, etc.) in both nations is expiring. This makes serious changes inevitable. The situation is complicated by growing challenges for the digital economy – from evolving regulatory framework to digitalization of the global economy.

Keywords

• digital economy, u.s.a., china, internet platforms, information and communication technologies