On The Role Of Digital Transformation In The Real Econom

In today’s era,a new generation of digital technology innovations,represented by the Internet,big data,cloud computing,artificial intelligence and blockchain,are actively and rapidly spreading,accelerating their deep integration with various sectors of the economy and society,and setting off a new wave of digital transformation with global repercussions.The digital economy is developing at an unprecedented speed,with a wide range of radiation and a deeper impact than ever before,and is becoming a key force in restructuring global factor resources,reshaping the global economic structure and changing the global competitive landscape.Major countries have seized the opportunity to accelerate industrial transformation and upgrade,using data as a key factor of production to start the digital transformation process and strive to seize the first opportunity in the new round of technological revolution.Although the digital transformation brings a once-in-a-lifetime opportunity,it is undeniable that we are still in the exploration phase of the digital economy,which is a difficult "climbing period" in the process of digital revolution.The questions of how the transformation is being implemented,how it is progressing,what economic effects it is having,what the channels of action are,whether everyone will be able to enjoy the dividends of digital transformation,how it will develop in the future,etc.are all questions that have yet to be explored.The issue of development in the context of digital transformation is an important proposition in the promotion of the state and the modernization process.Since the 18 th National Congress,the Chinese Communist Party has attached great importance to the development of the digital economy and elevated it to a national strategy.The report of the 20 th Party Congress also clearly proposes to "accelerate the building of a strong manufacturing country,a strong quality country,a strong aerospace country,a strong transportation country,a strong network country and a strong digital China." Against this backdrop,an in-depth understanding of the development of digitalization and an analysis of its economic effects and channels of action in the real economy has become an important issue that needs to be studied.The study of these issues not only helps to deepen the understanding of the digital transformation process,clarify and correctly view the logic behind its development,but also has important practical significance for better promoting the construction of Digital China,promoting the deep integration of the digital economy with the real economy,and further improving the quality of economic development.This study focuses on the effect of digital transformation on the income of micro and small businesses,and the role of digital transformation in coping with the impact of the COVID-19 pandemic and enhancing the resilience of the national(regional)economy.Compared with existing studies,the specific research of this paper is as follows:Firstly,this paper examines the impact of digital transformation on the incomes of low-end workers at the micro level.The rapid rise of the digital economy has given rise to a variety of new economic formats,among which the platform economy has become an important organisational form connecting consumers and businesses.Through rich data elements,digital economy platforms have created many new jobs while also laying the foundation for inclusive digital financial services,significantly improving the efficiency of the allocation of social financial resources.But on the other hand,as traditional business operation models are disrupted,new technical and financial barriers may also emerge.This is because the prerequisite for enjoying the digital dividend is the availability of supporting facilities and corresponding knowledge and skill levels,and it remains to be seen whether income and welfare in the low-end labour market can be guaranteed.General Secretary Xi Jinping clearly stated in his 20 th National Congress report that we must insist on safeguarding and improving people’s livelihoods in the course of development.To this end,there is an urgent need to clarify the impact of such changes on those in employment,especially at the lower end of the labour market.To answer this question,this paper focuses on one of the most mature and wideranging scenarios of China’s current digital transformation-the mobile payment offline code scanning scenario.Based on the digital financial services derived from mobile payment,this paper constructs a dynamic equilibrium model of production and financing for the informal workers,and theoretically analyses the mechanism of the impact of digital financial services in mobile payment platforms on the value of the informal workers.In addition,this paper also empirically examines the business impact of digital financial services on the informal workers mediated by mobile payment devices with the help of the income data of QR merchants.This study finds that digital financial services mediated by mobile payment devices significantly increase the income of informal workers by improving their asset management capabilities and alleviating financing constraints.Secondly,on the premise that the digital transformation has been proven to have an income-increasing effect on micro and small businesses represented by the informal workers,this paper further distinguishes the heterogeneous impact of digital financial services among different groups of people,beware of the creation of new inequalities and discrimination.As an important social issue,the distribution of digital dividends is closely linked to people’s gender,age,education level and so on.These demographic distribution characteristics variables regarding social class and social inequality determine how people access and use digital resources,and ultimately influence how much of a dividend they receive.While digital transformation can reduce certain contextual advantages and provide equitable access to participation for all,generating a digital dividend,its utility will also vary depending on the level of individual acceptance of digital technologies.On top of this,human participation in thedesigning and coding algorithms of fintech is equally subjective.These biases and discrimination by programmers have the potential to permeate the algorithms of digital services,thereby exacerbating or entrenching forms of discrimination and prejudice already present in society and increasing the gap in the distribution of dividends between different groups of people.The above issues imply that,as digital technology enters into social adoption,we should also be wary of the newly created mechanisms of digital dividend distribution becoming an important factor affecting income inequality,in addition to the existing inequality.In view of this,this paper further explores the distribution of dividends from digital financial services among different groups of people,building on the previous research sample,to investigate whether digital discrimination exists.It is found that those socially disadvantaged groups who may be discriminated against do perform less well in terms of embracing digital technology,but once they embrace the digital transformation,their income increases significantly more than others,suggesting that in the mobile payment scenario,digital transformation can help address income inequality by creating a balance between groups with different characteristics.Finally,the paper also explores the role of digital transformation at the macro level in increasing economic resilience and facilitating post-epidemic economic recovery.COVID-19 spread as a global epidemic in the early 2020 s,and policies such as border restrictions,quarantine measures and national embargoes implemented to contain the spread of the virus brought an abrupt end to the global economy that had returned to prosperity in the post-financial crisis era.Despite the negative impact of COVID-19 on many industries,the size of the digital economy has grown rapidly globally after the outbreak.Digital transformation is known from previous research to improve financial accessibility and close the gap in the delivery of financial services to vulnerable populations.Moreover,the use of contactless payment methods and e-money in the digital economy can also reduce the need for physical contact with payment instruments such as cash,which is particularly relevant during the novel Coronavirus pneumonia epidemic.This is because it helps to reduce the spread of COVID-19 by changing people’s financial behaviour.Can digital transformation,then,help a country to withstand economic shocks during the COVID-19 pandemic and contribute to postepidemic economic recovery.To answer this question,this paper looks at changes in GDP and unemployment rates in 86 major countries around the world over the threeyear period following the outbreak,and finds that countries(regions)that maintain high GDP growth rates and unemployment rates after the COVID-19 shock are often those with higher degree of digital transformation,and most of them also show higher levels of digital transformation during the outbreak.The majority of countries(regions)also show a higher need for digital transformation during the epidemic.This seems to coincide with our conjecture.This paper therefore constructs an economic resilience evaluation indicator to measure a country’s(region’s)ability to resist and recover from the shock of the COVID-19 pandemic,and explores the impact of digital development and other possible determinants of economic resilience in post-epidemic countries.The study finds that the degree of digital transformation is one of the key determinants of a country’s resistance to and recovery from an epidemic shock.In addition,countries with better economic development and higher levels of rule of law prior to COVID-19 also experienced stronger recovery in GDP growth and employment.Taking a holistic view of the grouping and following a fuzzy set qualitative comparative analysis we also find that digital transformation is a necessary condition for the resilience of regional economies.However,digital transformation alone is not sufficient for countries to achieve better economic resilience during a new pneumonia pandemic,but needs to be combined with other conditions,such as strict strict policies or educational attainment.Compared to existing studies,the possible innovations of this paper are as follows:First,it is important to fully clarify the economic effects brought about by digital transformation in order to seize the strategic opportunities in the digital era and build a digital China.This paper not only interprets the income enhancement effect of digital transformation on small and micro businesses and the impact on social inequality,but also explores the role of digital transformation in economic resilience in the context of the crisis of the COVID-19 pandemic,which provides a relatively novel perspective for deepening the understanding of the economic effects of digital transformation.Second,although the literature has focused on the economic effects of digital transformation,most of it has examined the combined impact of the digital economy at the city or provincial level,with little literature using individual-level data to measure the extent of digital transformation,and there is a gap in research on the impact of digital finance on groups of informal workers.This study fills the research gap on the impact of the digital economy in the area of informal workers,and expands the literature on the digital economy and inclusive growth,financial inclusion,and the digital divide.Third,this paper advances the research on the impact of digital transformation on macroeconomic resilience.While prior research has shown that digital transformation can have multiple economic benefits,evidence on the importance of digital transformation for the economy during the COVID-19 pandemic has been mostly descriptive(Pinshi,2021)or focused on business segments within digital economy industries.This paper is the first cross-country study covering a large number of countries to reveal the economic impact of a large set of technological,economic,political,social and healthcare factors when establishing the economic relevance of digitalization during the COVID-19 pandemic.Fourth,this paper also makes a useful attempt at a technical level.We draw on(Rezaei Soufi et al.,2022)for the measurement of economic resilience,but we extend and improve it somewhat to meet the needs of the study and attempt to construct a measurement framework that fits the context of this paper.Drawing on Beck et al.’s(2018)theoretical model,this paper also constructs a representative dynamic equilibrium model of informal workers regarding mobile payment and production and financing,and thus illustrates the impact of digital transformation on the value of informal workers.