Digitisation and Economic Development

Video: Presentation by WIFO Industrial Economist Peneder at E-Day 19 of the WKO
What opportunities and risks does digitisation bring for the economy and society? At the E-Day 19 of the Austrian Federal Economic Chamber (WKO), WIFO industrial economist Michael Peneder reported on the most important macroeconomic effects of digitisation.

As a growth engine, digitisation enables numerous innovations that create new needs and ways to meet existing needs. This growth creates new income, but it is not evenly distributed. Rather, change favours those companies, population groups and business locations that are best able to adapt to and shape technological changes.

In his remarks, Peneder emphasised the increase in real purchasing power through digitisation. Cost savings and quality improvements mean that consumers can demand more goods and services with the same nominal income. This additional demand benefits not only highly digitised sectors of the economy, but also those that are less affected. While automation directly replaces employment, it also creates the conditions for additional demand and new employment under competitive conditions. This dual effect of automation is a major explanation for the stable development of the volume of work in recent decades.