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THE RELATIONSHIP BETWEEN THE DIGITAL ECONOMY AND EMPLOYMENT
M.Sh.Chinorova
National University of Uzbekistan after named Mirzo Ulugbek
“Regional economy and management” department
“Regional economy” specialization
Student
K.U.Salaeva
National University of Uzbekistan after named Mirzo Ulugbek
“Regional economy and management” department
“Regional economy” specialization
Student
https://doi.org/10.5281/zenodo.14849871
Abstract.
The digitalization of the economy is opening up vast opportunities in many
countries today. In particular, the digital economy not only creates numerous opportunities for
the population but also plays a crucial role in the socio-economic development of the state. This
article discusses the advantages of the digital economy and its role in reducing the shadow
economy and informal employment.
Key words:
digital economy, shadow economy, informal employment, e-government,
economic growth, labor productivity.
Introduction
: In many countries around the world, the introduction of e-government
began with the emergence of new technologies. Although there are various debates on this issue,
e-government is generally defined as the use of ICT to improve the functioning of public sector
organizations. As a result of advanced technological tools, "E-government aims to enhance
relations between people and their governments by improving the efficiency of service delivery,
ensuring easy access for all, considering people's needs, increasing public participation in
decision-making, and enhancing the transparency and accountability of state institutions."
1
The demand for labor is expected to increase for innovative products and services,
whereas the opposite can be expected for more standardized products. For example, Rifkin argues
that in the future, the digital revolution will significantly reduce employment, as he considers the
marginal cost of production to be close to zero
2
. This means that even a low-wage worker would
be more expensive than the additional costs required to operate a smart machine. However, this
pessimistic scenario can only materialize if the level of production remains unchanged..
We are witnessing the rapid expansion of new opportunities for entrepreneurship and self-
employment in the digital economy. In many cases, investments aimed at developing ICT have
resulted in economic growth, the creation of new jobs, the emergence of new services for the
population and businesses, and the reduction of government administration costs within e-
government projects. The advantages of horizontal networks over hierarchical ones—primarily
1
Ўзбекистон Республикаси Президентининг 2020 йил 28 апрелдаги “Рақамли иқтисодиёт ва электрон
ҳукуматни кенг жорий этиш чора-тадбирлари тўғрисида” ПҚ-4699-сонли қарори.
2
Policies to Reduce Informal Employment. An International Survey. Technical Note for the Government of Ukraine.
The World Bank - 2011. – 17 p.
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due to their higher exchange speed and diversity—serve as the foundation for a new phase of
economic growth.
The 2016 ILO study, “Non-Standard Employment Around the World: Understanding
Challenges, Shaping Prospects”, explored various perspectives on the relationship between new
technologies and informality. Some studies focus on the emergence of new forms of informality,
particularly the rise of non-standard employment. Others examine the processes and challenges
faced by informal sector entities in adopting new technologies into their businesses or activities.
Additionally, some researchers analyze the impact of technology on productivity and
informality. Moreover, there is an increasing view that the distinction between formal and informal
employment is becoming less clear, making these categories increasingly difficult to differentiate.
3
As a result of analyzing various characteristics of the digital economy that may impact
the labor market, the following figure highlights its strengths and opportunities.
1–picture. The impact of the digital economy on the labor market
Source: Compiled by the author.
The formation of a digitalized economy has distinct characteristics, primarily defined by
the expansion and systematization of digital content (the object of labor) and the automatic
creation of added value without human intervention. One of the key features of the digital
economy is the speed of change in practical business models and management within the
production of goods and services.
Although Table 1 presents the potential economic and social benefits of digitalizing the
economy, all studies highlight that this "revolution" has a significant impact on the labor market.
3
Schneider F. New Estimates for the Shadow Economies all over the World / F. Schneider, A. Buehn, C.E.
Montenegro // International Economic Journal. – 2010. – №24 (4). P. 443-461.
The Impact of the Digital Economy on the Labor Market
Strengths
Opportunities
1.
A connected World, open systems,
and a knowledge-based economy
2.
Automation, robotics, and machine
learning
3. Productivity, efficiency, speed, and
profitability
4. Cost-effective efficiency with near-
zero marginal costs
5. Innovative products and services,
“Life-Simplifying” applications
6.Industry and services
1.New jobs (Computer engineers and
scientists, network specialist, etc)
2. Establishing more “flexible” and
autonomous work models
3. Elimination of repetitive and Monotonous
tasks
4. Improving economics, assisting in heavy or
complex tasks
5.New mwthods of labor productivity
distribution (reducing working hours)
6. new forms of employee collaboration
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Table 1.
The economic and social impact of digitalizing the economy
Economic benefit
Social benefit
1.
S
ignificant contribution to economic growth
2.
S
harp reduction in bureaucratic processes,
corruption, and bribery
3.
D
ecrease in the level of the shadow economy and
informal eployment
4.
I
ncrease in labor productivity
5.
A
cceleration of small and medium-sized
business growth
6.
G
rowth in job opportunities in related industries
7.
E
xpanded and easier access to financial services
8.
R
eduction of market entry barriers for products
and businesses
1.
I
ncreased inclusivity and reduction of poverty
2.
T
ime-saving benefits
3.
I
mproved access to and quality of healthcare
services
4.
L
ower costs and greater accessibility of mass
education
5.
R
educed negative impact on the environment
6.
D
ecrease in crime rates and enhanced public
safety
7.
E
xpanded
opportunities
for
developing
countries
Source: Compiled by the author
Based on the above, it can be concluded that the digital economy plays a crucial role not
only in public administration but also in the formation of a new economic structure, the emergence
of an information-based society, and the reduction of the shadow economy and informal
employment. The provision of government services through the digital economy ensures the
following:
Reduction of budget expenditures;
Simplification of public service delivery (e.g., obtaining information, permits, etc.);
Decrease in bureaucracy and corruption;
Free access to essential government data and reduced interaction time between citizens and
government officials;
Continuous expansion of electronic public services available to the population;
Increased public trust in government institutions, among other benefits.
In Uzbekistan, starting from January 1, 2020, a "Unified National Labor System" was
introduced to register new employment contracts, modify existing ones, and record contract
terminations.
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Additionally, an electronic labor book was implemented, automatically generating
employee work activity records
4
. Moreover, the system requires inputting data on available job
vacancies, aiming to reduce unemployment, improve service quality for job seekers, and formalize
labor relations for informal workers. The system also focuses on enhancing vocational training
and retraining programs, particularly for youth and women, by actively utilizing information and
communication technologies (ICT) in project development.
Table 2
5
The annual volume of gross added value generated in the
information economy
and
e-commerce sector (in billion UZS)
This table presents the gross added value generated in Uzbekistan's information economy
and e-commerce sector. Over the years, its volume has increased due to ongoing efforts and
reforms, reflecting the development of the digital economy in the country. At the same time,
some governments are actively adapting to new technologies in the public sector, particularly in
the labor market, and are using digital tools to facilitate the formalization of economic entities
and employment.
In the context of Uzbekistan, the digitalization of the economy has a significant impact on
employment. Digital technologies enable job optimization, increase labor productivity, and reduce
informal employment. While some traditional professions may disappear due to new technologies,
new professions such as IT specialists, e-commerce professionals, and digital service providers are
emerging.
The digital economy enhances labor market flexibility and expands opportunities for
remote work (e.g., freelancing and telecommuting). Additionally, e-government systems reduce
bureaucracy and encourage people to participate in formal employment relationships.
4
Ўзбекистон Республикаси Президентининг 2019 йил 31 октябрдаги “Ягона миллий меҳнат тизими”
идоралараро дастурий-аппарат комплексини жорий қилиш чора-тадбирлари тўғрисида”ги ПҚ 4502-сонли
қарори.
5
Muallif ishlanmasi. Manba:stat.uz
8241,9
9220,2
11742
18253,1
29626,1
42410,6
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2018
2019
2020
2021
2022
2023
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In Uzbekistan, the launch of platforms like the "Unified National Labor System" has
contributed to increasing formal employment rates.
However, to fully harness the benefits of digitalization, the following aspects must be
addressed:
-
Training and retraining of personnel – Developing a skilled workforce that meets the
demands of the digital economy.
-
Development of ICT infrastructure – Expanding internet access and improving IT services.
-
Encouraging the transition from the informal to the formal sector – Strengthening the legal
framework for e-commerce and labor relations.
In conclusion, in Uzbekistan, the digitalization of the economy not only increases
employment but also leads to qualitative changes in job structures. Therefore, a well-implemented
state policy that adapts to technological transformations will maximize the positive impact of the
digital economy on the labor market.
List of References
1.
Ўзбекистон Республикаси Президентининг 2020 йил 28 апрелдаги “Рақамли
иқтисодиёт ва электрон ҳукуматни кенг жорий этиш чора-тадбирлари тўғрисида” ПҚ-
4699-сонли қарори
2.
Ўзбекистон Республикаси Президентининг 2019 йил 31 октябрдаги “Ягона миллий
меҳнат тизими” идоралараро дастурий-аппарат комплексини жорий қилиш чора-
тадбирлари тўғрисида”ги ПҚ 4502-сонли қарори.
3.
Policies to Reduce Informal Employment. An International Survey. Technical Note for the
Government of Ukraine. The World Bank - 2011. – 17 p.
4.
Schneider F. New Estimates for the Shadow Economies all over the World / F. Schneider, A.
Buehn, C.E. Montenegro // International Economic Journal. – 2010. – №24 (4). P. 443-461.
5.
Stat.uz
