Contribution of E-Commerce to Economic Growth

contribution of ecommerce to economy

The main contribution of e-commerce in this new economy are knowledge, information, innovation, and technical progress that lead to the growth of economic development. And this includes e-commerce. In this article, e-commerce will be explained and how it contributes to the growth of our economy.

What is E-Commerce?

E-Commerce or Electronic Commerce refers to the products or services over the internet bought by the customers and sold by the sellers. Today, e-commerce plays a vital role in our lives. It evolved in profound ways that it redefines commercial activities and starting to overtake traditional business all around the world.

E-Commerce in the New Economy

The discovery of the Internet serves as a communication and source of information. The worldwide use of websites with the help of the Internet set the stage for e-commerce.

E-commerce exists in many forms and in different contexts. It distinguishes itself as the most dynamic and visible component of the new economy. 

The contribution of e-commerce on both companies and society will become of great importance as intensity and extent. In companies, e-commerce offers unique opportunities for transforming businesses, redefining markets, and creating a new market. On the other hand, e-commerce’s impact on society is relieved by the aspects of aiming the economic process. And this results in an opportunity to increase both on a micro and macroeconomic level.

Read the E-Commerce Trends and what to expect this 2021.

Importance of E-Commerce to the Economic Growth

As the Internet penetrates, accessibility increases and more people can benefit from online services, including e-commerce. E-commerce is a key innovation that drives economic growth. E-commerce generates economic growth in the country. It also has activities that have tremendous growth potential. However, it has not realized that it can bring about structural changes needed for economic development. It is important to recognize that e-commerce will become the driving force of economic development in countries. And these interactions of such factors will bring about rapid economic growth.

E-commerce is important in economic growth because gains related to productivity and efficiency are generated by it. The potential that e-commerce has in productivity and competitiveness terms is significant and provides the right situation for the increase of production and efficiency by supporting networks and communications, electronic storage media, which are the infrastructure for e-commerce.


E-commerce helps to make business deals easily and quickly. It also helps increase foreign trade, especially exports. With the help of modern technology and discoveries, e-commerce can facilitate the process between consumers and producers and eliminates geographical distance.



Investment opportunities are being created because of e-commerce. The increasing production in this sector helps direct capital to invest in it.

Capital Market

capital market

E-commerce is affecting the capital market as capital flows are exchanged between surplus units. And this plays a major role in stimulating investment and economic growth.

Work’s Strength

A lot of developing countries are suffering from unemployment, and e-commerce serves as an opportunity and can bring advantages to the economy. E-commerce is creating new opportunities for employment by setting up small businesses and connects them to the international market at the lowest investment cost. Second, e-commerce would lead to the replacement of new jobs. E-commerce will transform traditional jobs into a digital one that requires workers to use technology to enter the competitive platform.


The experience of e-commerce to date is very positive, though it is still early for developing new e-commerce indicators. However, the collected indicators in other countries highlight several barriers to the wide implementation of e-commerce. In this case, the most important thing to do is to use those positive indicators to grow as individuals that will help the growth of the economy eventually.

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