CHALLENGES IN ADOPTING DIGITAL PLATFORMS IN DEVELOPING ECONOMIES: BARRIERS, OPPORTUNITIES, AND POLICY IMPLICATIONS

Abstract

Digital platforms have emerged as a transformative force in global commerce, enabling businesses to enhance operational efficiency, improve customer engagement, and expand market access. Despite their potential, adoption remains uneven across developing economies due to infrastructural deficiencies, financial constraints, limited digital literacy, cybersecurity concerns, and regulatory complexities. This chapter examines the challenges associated with digital platform adoption in developing economies, with particular emphasis on small and medium enterprises (SMEs). Drawing upon secondary data, international reports, and contemporary research, the chapter identifies major barriers including limited broadband penetration, affordability challenges, digital skill deficits, and trust-related concerns in digital transactions. Recent statistics indicate that while internet penetration in developing nations reached approximately 64% in 2023, fewer than 35% of SMEs actively utilize digital platforms for business operations. Using India as a case illustration, the chapter explores the rapid expansion of digital payments, e-commerce ecosystems, and government-led digital initiatives, alongside persistent adoption gaps among micro and rural enterprises. The chapter further discusses opportunities created by digital platforms, including financial inclusion, supply chain efficiency, innovation, and employment generation. Policy recommendations emphasize investment in digital infrastructure, SME digital training, regulatory clarity, and cybersecurity frameworks. By integrating theoretical perspectives with empirical insights and policy implications, this chapter contributes to understanding how inclusive digital transformation can be achieved in emerging economies.