Enhancing online business sector: digital trust formation process

Tsotne Zhghenti,Vakhtang Chkareuli

doi:10.21272/mmi.2021.2-07

Tsotne Zhghenti, Vakhtang Chkareuli

Open Access

https://doi.org/10.21272/mmi.2021.2-07

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Abstract

The paper reviews Georgia's digital trust formation process and underlines the most important challenges for the online business sector. This research can be generalized for most developing countries where the digital transition process is on the agenda, especially for countries that have recently emerged from economic-political transition. Georgia has completed the transition from a centrally planned economic system (the heritage of being part of the Soviet Union) to a free market economy. Although trust in institutions is improving gradually, mistrust in business processes is still a great challenge for local business sectors. A wide-reaching lockdown caused by the 2020-2021 COVID-19 pandemic pushed both firms and individuals further towards online activity worldwide. In this regard, trust has become the key determinant in facilitating electronic transactions. Technological advances are providing dozens of tools to improve customer satisfaction and trust, which should lead to customer loyalty. On the other hand, lack of digital skills and digital security problems raises digital untrust concerns. Therefore, trust research in the digital economy is becoming more actual for academic or business studies. Digital trust is a multidimensional factor that is under the influence of digital and physical operations. In Georgia, businesses have to overcome obstacles built-in people's minds as a heritage of the Soviet Union. Georgia was a part of the Soviet Union for 70 years, which critically degraded the trust of both formal and informal institutions. Therefore, building digital trust in business is getting more complex as it includes traditional trust problems and digital challenges too. The main research purpose in this paper is to present the digital trust forming process in Georgia to reveal the major problems. This study involved the trust stack model in analysing three different stages of trust formation in the Georgian digital economy (trust in the idea, trust in the platform, trust in the individual). The research identified challenges and steps which should be carried out soon. Research academic findings and methodological approaches can be used to analyze other developing countries whose economies are influenced by the digital transformation process.

Highlights

The digital economy had become an important part of the world economy starting from the late 20th century
Following the literature review discussed in the previous section and a deep and comprehensive analysis of country characteristics, we came up with different factors to analyze each step of the trust stack in the Georgian digital economy
This part discusses all hypotheses according to statistical overview and digital transformation characteristics in the Georgian economy

Summary

Introduction

The digital economy had become an important part of the world economy starting from the late 20th century. The digitalization process has never been more important than due to rapid technological advances and growing innovations in business. The digital gap between developed and developing countries becomes more challenging for developing economies, including the Georgian economy. Digital trust is a key instrument connecting individuals, businesses, and institutions in the current digital world. Studying digital trust is crucial for the academic sector to understand the digital economy. The digital trust concept is evolving, i.e., it is partially unexplored, especially in developing economies where statistical data or theoretical basis are not available for country level. No academic studies have not published from Georgian academic society about digital trust forming process

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