This article was automatically translated from the original Turkish version.
In today’s world, wherever we look, we are surrounded by screens, applications, data flows, and digital services. We are all digital actors—sometimes consciously, sometimes unconsciously. The two key concepts of this transformation, digitalization and digital economy, are often used interchangeably. Yet, although these two concepts are closely interlinked, they represent distinct processes. Like the relationship between a seed and its fruit: one initiates the process, the other represents the outcome.
Digitalization is a transformative process that began with the migration of analog systems into digital environments but has since evolved far beyond that initial step. What started in the 1990s with the storage of files on computers has now transformed into AI-driven decision-making systems, big data analytics, and automation. As Kara (2024) notes, digitalization is not merely the use of technological tools; it is a multi-layered transformation that alters how organizations, institutions, and individuals think.
An example from Türkiye: e-Government applications have become an ordinary part of daily life. Dozens of procedures—from obtaining a residence certificate to booking a medical appointment, settling tax debts, or acquiring a student ID—can now be completed within minutes via our smartphones. This is a success of digitalization. But we must ask: how much of the data generated during this process has been converted into economic value? This is where the digital economy comes into play.
The digital economy is the economic dimension of digitalization. It is the process of creating economic value through the infrastructure enabled by digitalization, using components such as artificial intelligence, the Internet of Things (IoT), fintech, e-commerce, and data analytics. As Yılmaz and Şahin (2023) observe, unlike classical economic structures, the digital economy treats “data” as its primary capital resource.
Platforms such as Amazon, Alibaba, and Spotify generate billions of dollars in value despite owning far fewer physical assets than traditional firms. Their power lies in data: user behavior, preference algorithms, real-time data streams—all of these constitute the muscle of the digital economy.
Let us acknowledge that these two concepts are deeply intertwined. Yet a simple example can clarify the difference: Moving a hospital’s appointment system into a digital environment is digitalization. But using big data to analyze this system, optimize doctor distribution, and reduce resource waste is the digital economy. One is the infrastructure, the other is the value creation enabled by that infrastructure.
Türkiye has taken significant steps in digitalization. Systems such as e-School, e-Government, e-Invoice, and e-Prescription are exemplary on a global scale. However, a more profound structural transformation is needed to transition toward a digital economy.
On the other hand, rising fintech startups, mobile payment systems, and growing e-commerce volumes offer promising signs. Especially the digital leap experienced during the pandemic revealed the potential of the digital economy.
Digitalization is not merely a technological issue. As Demir (2020) notes, it has also reshaped corporate social responsibility approaches. Today, companies bear responsibility not only in their physical operations but also on social media, digital platforms, and in their data policies.
Yet serious risks accompany this transformation:
For the digital economy to be sustainable, strategic and inclusive policies must be developed in these areas.
Digitalization is not a one-way trend but a transformation. The digital economy is the new world order that this transformation has produced. Correctly understanding these two concepts and recognizing them as complementary parts is a prerequisite for taking firm steps into the future. For Türkiye, becoming not merely a user but a producer and shaper of this process will be decisive for economic growth and social well-being. It is our collective responsibility to approach digitalization not just as a tool but as a strategic vision.
Digitalization: The Driving Force of Transformation
Digital Economy: From Data to Value
Why Are Digitalization and Digital Economy Confused?
Where Does Türkiye Stand in This Process?
Beyond Digitalization: Social and Ethical Dimensions
Let Us Become the Agents of Transformation