Technological Risks of the Digital Economy
Journal of Corporate Finance Research, Vol. 12, No. 4, pp. 99-109, 2018
11 Pages Posted: 4 Apr 2019
Date Written: 2018
This article postulates that the successful development of the digital economy will be ensured by strengthening the position of corporations, increasing quality of corporate governance, and increasing the interaction and clarity of the structure of financial institutions in accordance with the latest technologies. A general definition of the term ‘digital economy’ is formulated to understand this transformation. The digital economy (as an environment) includes a combination of digital infrastructure, innodiversification information, and communication technologies for doing business. This article discusses issues related to the development of new methods of risk assessment and their impact on business processes in the formation and development of the digital economy.
The article further emphasises that corporations must pay special attention to the risks inherent in the digital economy in the transformation process. The purpose of this study is to identify the most significant risks. The study was conducted through hierarchical methods for developing classifications, ranking, and a priori analysis. It has been established that the highest priority of research in the traditional economy is given to financial and commercial types of risk as a result of an a priori analysis. A classification of risks of the digital economy is herein proposed.
The article further states that the most specific corporate risk for the digital economy is a specific risk, called technological risk. The concept of technological risk is suggested in order to understand the problems associated with large-scale acceleration of the digital economy, and the development and implementation of information and communication technologies. The development of these technologies appear almost impossible to halt due to their tending toward self-propagation and interactive innovation. The article highlights the positive trend of the emergence of an innovative financial system, which is based on digital platforms, technology and marketing. A well-thought and concerted strategy of digital transformation is important for corporations and successful businesses in modern conditions, instead of disparate use of separate tools.
The article also notes that the contradictions in strategy and influence between the leading transnational corporations are becoming one of the main sources of risk in the new conditions of the digital economy from the point of view of ensuring national security issues.
Keywords: digital economy, corporate risks, digital economy risks, financial risks, technological risks, management, risk management, corporate governance, corporate governance principles
JEL Classification: G32, G34, G38
Suggested Citation: Suggested Citation