In today’s world, economies are no longer just about factories, roads, and natural resources. A new kind of wealth is shaping the future – intangible digital resources like data, software, and artificial intelligence. A recent study by Olegs Cernisevs, Doctor of Science and CTO of Blackcatcard, explores how these digital assets are changing economic region theory and influencing growth in the digital age.
Traditionally, a region’s economic strength depended on its physical resources – things like coal, oil, or access to trade routes. This type of assets has always been the focus of traditional economic theory. However, digital technology is rewriting the rules. Instead of relying solely on tangible assets, modern economies thrive on digital products, intellectual property, and technological innovation. And that’s where economic science stays behind – there is a significant lack of scholars’ attention to non-material resources and products.
That’s why Cernisevs and his colleagues are researching regions that successfully integrate these resources. The study highlights Silicon Valley, Estonia, and Dubai as examples of places where digital assets drive economic success. These regions have built economies around innovation, digital services, and technological expertise rather than traditional industries.
Unlike physical resources, intangible digital products can be used by millions of people at the same time without depletion. Software, AI, and blockchain technologies can be distributed instantly across the world, creating value far beyond geographic limitations. This means that the success of a region is increasingly tied to how well it fosters digital innovations.
Since digital products are not physically transported, economists need new ways to measure their value. The study suggests that instead of counting the number of goods produced, we should track transactions – such as data exchanges, software downloads, and online service usage. These transactions represent economic activity and show how digital assets contribute to regional growth.
For example, Estonia’s e-Residency program allows people from all over the world to establish businesses there without physically being in the country. Similarly, Dubai’s investment in blockchain technology is making it a leader in digital finance, attracting global businesses and entrepreneurs.
While digital resources offer exciting opportunities, they also come with challenges. Developing a strong digital economy requires investment in high-speed internet, cybersecurity, and digital education. Not all regions have the same level of access to these critical elements, which can create economic gaps. Additionally, regulations surrounding digital transactions and intellectual property vary from country to country, making it difficult for businesses to expand globally without legal barriers.
As the global economy continues shifting toward digital-first business models, regions that embrace intangible resources will be better positioned for success. Policymakers need to recognize the value of digital assets and invest in infrastructure that supports innovation and connectivity.
The study concludes that digital resources function much like traditional ones in economic theory, but they require new ways of thinking about cost structures, economic contribution, and regional development. By focusing on digital transformation, regions can remain competitive and resilient in an ever-evolving economy.
As technology advances, the question is no longer just about who has the most factories or natural resources – it’s about who can best harness the power of digital innovation. In his previous article, published in Geography, Olegs shared his insights on the role geography plays in the success of a fintech company. Highlights of this article are available here.
