Advances in Economics, Business and Management Research, volume 113

Factors of Regional Extensive Development (FRED 2019)

Impact of Digital Economy on

Well-Being of Population
Maria Khazheeva
The Department of Economics and Management of Railway Transport
Irkutsk State Transport University
Irkutsk, Russian Federation
marya77@list.ru

Abstract—The relevance of the topic is due to the need to filled Creativity. The well-being of the population is made up
study the impact of ratings on economic development. The article of the capacity of each individual country to ensure a decent
examines the digital impact on government regulation in Russia, level of living in its territory. Many Governments are striving
through the rating system. A comparative analysis of the to improve the standard and quality of life of their citizens.
international economic development indices of Russia and the The assessment of well-being is possible through research
leading countries is being conducted. In the context of the conducted by various world rating agencies, which
innovative vector of the development of the Russian economy, the demonstrates the course and economic policy pursued in the
use of information and communication technologies to improve country.
the well-being of the population is described. The development of
digital technologies contributes to their penetration into all areas Ensuring sustainable growth of well-being and
of our lives and, having gained wide recognition, transforms the competitiveness are the essence of national ideas and priority
level of well-being of citizens. Innovations in information and projects of the may (2018) Presidential Decree and the Russia-
communication technologies affect citizens' behavior, 2024 Social and Economic Development Strategy [1].
information needs and how people work and share information.
Further advances in digital innovation will greatly enhance this The development of the Russian Federation is closely
change and provide us with exceptional services and well-being related to the peculiarities and trends of world economic
that were not previously expected. Digitalization blurs formation and formation, now many countries of the world are
boundaries, resulting in a constant interconnection of societies at evolving under the influence of digitalization. In the digital
the international level. economy, needs are very different from pre-existing needs.
Key words—well-being of the population, information, The digital economy as any complex social phenomenon
international ratings created by technological progress has a number of features of
its own :
I. INTRODUCTION
1) The digital economy is a translation (transition) to a
The current phase of economic development is digital accounting system.
characterized by an accelerating digitalization process, where
the innovative infrastructure of countries plays a crucial role. 2) Digitalization can be quite dense and systematic, or
The globalization of the economy, which began at the end of chaotic, unexpectedly releasing large numbers of workers.
the last century, has contributed to the creation and 3) Digitalization provides companies or statesmen with
development of many supranational institutions of power, the most complete and objective information about the state of
which have resulted in the ability to remotely influence affairs (in a company or in the national economy), extracting it
domestic government regulation. National governments are from a myriad of sources for decision-making. This increases
required by national governments to take into account the need to comply with the Adequacy Act, which is
international regulations prescribed and provided by consistent with the intellectual level of managers with the
supranational institutions of power and various regional level of information.
integration authorities groups that not only alter the current
situation and fortunes of many countries around the world, but 4) Leaders at all levels where economic processes have
also exert significant pressure and economic impact. The to be regulated should be people with exceptional intelligence.
impact has both a direct and indirect impact on the well-being P. Shchedrovitsky's point of view is a fair, when he writes,
of the population living in the territory. is that “by digitizing various processes and creating so-called
In the study of well-being at the level of the world digital twins, we will be able to quickly compare and compare
economy, it can be stated that all the countries of the world are what we could not before: for example, efficiency project or
uneven in their development, in some countries the issue of benefit from the use of a material” [2].
survival is acute, in others the majority of the population lives
in relative well-being. The world's supranational institutions of II. METHODS AND MATERIALS
power are constantly faced with the task of balancing these In the study of the well-being of the population at the level
two opposing poles and creating new living conditions for of the world economy, it is possible to face the problem of the
people in which their lives would be long, happy, healthy and need to give an objective and complete assessment of the

Copyright © 2020 The Authors. Published by Atlantis Press SARL.

This is an open access article distributed under the CC BY-NC 4.0 license (http://creativecommons.org/licenses/by-nc/4.0/) 191
 Advances in Economics, Business and Management Research, volume 113

available diverse information, which has resulted in the freedom in making vital decisions (107th place) and in
international industry different kinds of indices and ratings. At readiness for charity (101st place).
present, a system of relations based on rating consciousness
has developed. They form rating psychology and thinking [3]. The second equally interesting rating is the study of social
well-being and its development on a global scale. This index
The author proposes to investigate three independent of prosperity of the world countries is calculated by the
rankings presented by different institutions: Legatum Institute. This indicator measures the results and
successes of the countries of the world in terms of the
1) International index of happiness; prosperity of the state.
2) Ranking of prosperity countries; The place of each country is formed as the weighted
3) The global competitiveness index. average value of these indicators. The statistics used in the
ranking are derived from various supranational institutions of
The World's Happiness Rankings is an international power (UN, World Bank, WTO and other institutions).
research project sponsored by the United Nations as part of the Accordingly, the lower the rating, the worse the country's
Global Sustainable Development Solutions Network initiative performance in this category (Table 2).
to show the achievements of countries around the world and
individual regions in terms of their ability to provide their TABLE II. RANKING OF PROSPERITY COUNTRIES 2012-2018 [6]
residents with a happy life (Table 1).
2010 Country 2018 Country Rating
TABLE I. INTERNATIONAL INDEX OF HAPPINESS WITH 2012-2019 1 Norway 1 Norway 80.9
YEARS [4, 5]
2 Denmark 2 New Zealand 80.9
2012 Country 2019 Country Rating
3 Finland 3 Finland 80.5
1 Finland 1 Finland 7.76
4 Australia 4 Switzerland 79.7
2 Norway 2 Denmark 7.60
5 New Zealand 5 Denmark 79.3
3 Denmark 3 Norway 7.55
6 Sweden 6 Sweden 79.1
4 Iceland 4 Iceland 7.49
7 Canada 7 United 79.1
5 Switzerland 5 Netherlands 7.48
Kingdom
6 Netherlands 6 Switzerland 7.48 8 Switzerland 8 Canada 79.0

7 Canada 7 Sweden 7.34 9 Netherlands 9 Netherlands 78.9

8 New 8 New Zealand 7.30 10 USA 10 Ireland 78.9

Zealand
… … … … …
9 Sweden 9 Canada 7.27
63 Russia 96 Russia 57.0
10 Australia 10 Austria 7.24

… … … … … Based on data provided by the rating agency, Denmark

59 Russia 68 Russia 5.64 took the leader in the quality of life index in 2018. Russia
went down again in the rankings. In 2010, Russia ranked 63rd,
The Table dynamics show data from The World Happiness but over a period of 8 years the method of counting has
Report from 2012 to 2019, with an annual study of global changed repeatedly. Thus, based on the ranking of countries
happiness conducted in more than 156 countries happy on quality of life, it is possible to evaluate each country. If we
citizens. Finland as a repeated leader is considered the look at this indicator more broadly, we can draw a conclusion
happiest country in the world, leading the top five Nordic about public health, family and social life, material well-being,
countries. The happiest of all this country make developed political stability and security, climate and geography, job
social support (2nd place in this indicator), high level of security, political freedom and gender equality.
freedom in making vital decisions (5th place), and low level of The third index, which characterizes the readiness of the
corruption (4th place). However by generosity Finns occupy country, is the development of information and
only the 47th place (2019) among all the countries of the communication technologies in countries of the world. This
ranking. It should be noted that Denmark, Norway, Iceland, study is the most valuable because it demonstrates the
Netherlands, Switzerland, Sweden, New Zealand, Canada and potential of countries and the possibilities of its development.
Austria are in the top ten, along with Finland. United Used as a means of analysis to build comparative ratings that
Kingdom ranked 15th and USA 19th. Russia is in 68th place, reflects the level of development of digital society in different
although in 2016 the level of happiness of citizens increased countries (Table 3).
(56th place), nevertheless even with a good result in terms of
GDP per capita (45th place), we significantly lose to
competitors in the perception of corruption (127th place),

192
 Advances in Economics, Business and Management Research, volume 113

TABLE III. RANKING COUNTRIES FOR THE GLOBAL NETWORK There is a faster production of new technology and
INTERACTION INDEX FOR 2012-2018 [7, 8]
technology, as we use traditional tools to develop technology
2012 Country 2018 Lead countries Rating and produce new products, research becomes more powerful,
[12] digital technologies allow creating new ones innovation
1 Sweden 1 USA 78 technology through recombination, which requires little or no
2 Singapore 2 Singapore 75 research and development.
New technological developments contribute to the rapid
3 Finland 3 Sweden 73 growth of the economy; their spread is facilitated by global
4 Denmark 4 Switzerland 71 digital networks, opening up fundamentally new opportunities
for international information exchange. The formation of the
5 Switzerland 5 United Kingdom 70 digital economy transforms the well-being of citizens, with its
6 Netherlands 6 Finland 683 subsequent growth. The observed trend blurs national
boundaries, allow highly skilled professionals participating in
7 Norway 7 Denmark 68 the development and implementation of many world projects
8 USA 8 Netherlands 67 in various fields, exporting their services and implementing
newly created ones.
9 Canada 9 Norway 65 Unfortunately, the digitalization of society brings not only
10 United 10 Japan 65 benefits and conveniences to man, but also new problems. One
Kingdom problem is the information disparity between people, countries
… … … … … and their regions in the new digital environment of society.
56 Russia 36 Russia 46
There is a problem of information asymmetry and
opportunistic behavior of agents in different kinds of surveys.
The quality and quantity of information provided, as well as
At the heart of the division of countries into leading the degree of awareness, are different for everyone.
countries, catch-up countries and newcomer countries is such The asymmetry of information and opportunistic behavior
a figure as GDP per capita, so, the leaders' countries, it depends on the depth and completeness of the material
averages 54,100 U.S. dollars, catch-up countries $16,300, and proposed for research. This quality of the material depends
the new countries $3,700. [3]. primarily on the amount of investment in the study, the
We see that leaders have more access to new technologies, professional level and competence of the expert, opportunistic
so their knowledge levels increase every year, and intelligent behavior of the agent working with primary information,
networking contributes to a new cycle of economic growth. asymmetry on the part of the interviewee, etc. There are many
There is now an annual race between countries to increase factors and conditions that affect the quality of information.
participation in intelligent networking, which will Thus, the information received is not an objective given, but a
subsequently lead to the transformation of the digital industry. subject of choice made under the influence of many
However, the data show that improved infrastructure is having circumstances.
a positive impact on demand [4]. As the Russian Federation At the heart of any level of well-being is the economic
considers the availability of Internet bandwidth, the number of component - based on mutually beneficial cooperation and
users is growing at a slower rate than expected. The positive personal interest of the interested parties of the economy.
impact of information and communication technologies is felt The basis for information asymmetry may be:
both from the economic and social points reflected in the
 Imperfect competition (high level of market power
rating. With the digitalization of the economy, the problem of
and entry barriers);
uneven development at the global, country and regional levels
becomes the least acute, because with certain competencies,  Situations where information in the market for
the price of backwardness (costs for those who have not had rational consumer choice and decision-making is not
time to fit into the new, the globalized world economy system) enough (information is not available, information is
is declining many times compared to the past, made possible unconscionable, information is too expensive);
by the expansion of the digital flow, which we now believe is  High transaction costs (including the cost of
exponentially growing. seeking the necessary information and the cost of
obtaining compensation in the event of unfair conduct by
III. RESULTS the seller);
 The case of insufficient production of public
The main strategic goal of Russia's development today is
goods;
to transition the economy to an innovative path of
development, increase competitiveness and improve the well-  External effects (external) - benefits or costs not
being of citizens. The formation of the digital economy is reflected in contracts (agreements), etc.
based on the latest advances in information and  Therefore, we believe that the digital component
telecommunications technologies and beyond. Information as of improving the well-being of citizens is:
a factor of production is now growing much faster than we can  Attention to the transformation of the quality of
expect, because it is influenced by the law of "accelerating the modern worker;
impact" opened by R. Kurzweil.  Destructure the value of the relationship over time;

193
 Advances in Economics, Business and Management Research, volume 113

 Continuous focus on developing and improving requires measuring not only economic but also non-economic
the institutional framework; indices. In the digital economy, the state's impact is being
 Modifying the nature of freedom and property. transformed, influenced by both supranational institutions and
national institutions of power, as well as by the population
The growth of the economy and the well-being of the through online referendums and votes. There is a gradual
population depend on many aspects and economic one of transparency in the decisions taken; the population has the
them. Thus, indicators become one of the arguments for opportunity to influence the activities of the government in
decision-making by economic actors on investment placement, real time, bypassing various administrative barriers, and those
business prospects, etc. in a particular region. The political - to respond to them in a timely manner. The digital economy
aspect is used as an element of political rhetoric, in a media stimulates the reduction of spatial barriers, increasing the
context, or an argument in disputes with political opponents. tightness and power of communication through the Internet
Participation in international rankings can therefore be of resource.
political importance to emerging economies. The research
aspect is related to quantitative and qualitative assessments of References
the degree of development and dynamics of the phenomenon [1] D.A. Medvedev “Russia-2024: the strategy of social and
assessed and its components. The strategic aspect is due to the economic development”, Voprosy Ekonomiki, vol. 10, pp. 5-28,
fact that process monitoring systems are a mandatory element 2018.
of effective public policy and in the form of tools to determine [2] P. Shchedrovitsky “In the first stage”, Izvestia, vol. 158 (30143),
vectors and dynamics of movement towards the goal. pp.6, 2018.
[3] E.F. Avdokushin “Rating as an instrument of the financial
Rankings of countries, regions, organizations and economy”, Issues of the new economy, vol. 2 (30), pp.4-12,
enterprises have become an important information tool, a 2014.
mechanism for establishing and maintaining business [4] J. Helliwell, R. Layard, J. Sachs “World Happiness Report
relations. 2012”, New York: UN Sustainable Development Solutions
Network, 2012
Independent assessments of the economic financial and
industrial condition, as well as possible changes in the state of [5] J. Helliwell, R. Layard, J. Sachs “World Happiness Report
2019”, New York: Sustainable Development Solutions Network,
countries, regions of enterprises, banks, insurance and 2019.
investment companies, pension funds and other business [6] S. Brien, S. Flanagan, D. Herring, H. Irving, J. Lee, M. McFahn,
entities are important for to increase the level of confidence of S. Pilsbury, E. Wickstead “The Legatum Prosperity Index
partners and clients to assess investment opportunities, 2018”, London: Legatum Institute, 2018
including attracting foreign investors. [7] K. Schwab “The Global Competitiveness Report 2012-2013”,
Ratings, for example, can be used in decision-making on Geneva: World Economic Forum, 2012
the scope, timing and nature of investments in development [8] K. Schwab “The Global Competitiveness Report 2018”, Geneva:
and maintenance of production, as well as calculating the level World Economic Forum, 2018
of risk of financial investments, when assessing the prospects [9] M.A. Khazheeva “Welfare of the population in the conditions of
of business relationships. As already noted, the rating is a the innovative economy”, Economy and Entrepreneurship, vol.
13 Nom. 4, pp. 101-106, 2019.
comprehensive assessment of the state of the subject, allowing
[10] M.A. Khazheeva “Methodological approaches to transformation
attributing it to a certain level of development. Therefore, in of the basic components of population welfare in the information
our view, production opportunities are closely related to the economy” Bulletin of the Pacific State University, vol. 2 (41),
conditions of the digital environment and the availability of pp. 163-170, 2016.
basic production resources. [11] A. V. Shcherbakov, V. G. Budanov, L. A. Kolesova,
Introduction to the theory of digital Moscow: Gryphon, 2018.
IV. CONCLUSION [12] A. V. Keshelava V. G. Budanov, V. Yu. Rumyantsev,
Introduction to the "Digital" Book one. Moscow: Vniigeosistem,
To sum up the above, with the formation of the global 2017.
world order, a digital economy has been formed, which

194