The Faster-Accelerating Digital Economy

The digital economy is one of the most important features of the knowledge-based society of the future. Based on information and communications technology (ICT), it grows faster than and eventually overtakes the traditional industrial economy. The fundamental driving forces of the digital economy’s faster economic growth are as follows. First, ICT converges with and improves the efficiency of traditional industries. Second, the production function of the ICT industry shows increasing returns to scale. Third, the development of ICT stimulates not only demand and supply but the entire expansive reproduction system, resulting in faster-accelerating economic growth. This paper investigates the essentials, causes, and patterns of the faster economic growth of the digital economy, and forecasts its future on the basis of real-life examples from the US, Finland, and Ireland. Furthermore, the core of the IT paradox is revisited, so that the potential of the digital economy can be reaffirmed.