The Cyber Economy as an Outcome of Digital Modernization Based on the Breakthrough Technologies of Industry 4.0

Abstract

Purpose: The purpose of this chapter is to provide a critical analysis of the initial results of digital modernization in the modern economy based on the breakthrough technologies of Industry 4.0. The chapter also introduces the concept of the ‘Cyber Economy’ as a new type of economic system. The chapter illustrates that the cyber economy is a product of digital modernization, provides a definition of the cyber economy and also scientifically substantiates the logic and sequence of the birth of the cyber economy.

Design/methodology/approach: Because the expected result of any country’s modernization is to enhance the livelihoods of its citizens, an assessment of the effect of the level of an economy’s digital competitiveness on the population’s living standards was conducted. The assessment was done with the help of regression analysis using statistical data from the IMD World Competitiveness Center and Numbeo. The research was conducted on countries with the highest level of digital competitiveness in 2018, including Russia. The rationale behind the selection of countries was that they are the only ones where there is a statistically significant influence of digital modernization on the population’s living standards.

Findings: As a result of studying the peculiarities of various technological modes, the stages of digital modernization for the economy based on the breakthrough technologies of Industry 4.0 were characterized as follows: the information economy, the digital economy, and, ultimately, the cyber economy. A conceptual model of the cyber economy was built reflecting its technological mode, objectives and means of management, criterion for measuring the effectiveness of management, new subjects of economic relations, and new spheres of the economy.

Originality/value: It is substantiated that the digital modernization of the economy based on the breakthrough technologies of Industry 4.0 will lead to the formation of the cyber economy that will involve the close interaction of humans and fully autonomous machines within cyber-physical systems that are transparent, predictable, and manageable.