The term 'Digital Economy' was coined in Don Tapscott's 1995 best-seller The Digital Economy: Promise and Peril in the Age of Networked Intelligence. The Digital Economy was among the first books to show how the Internet would change the way we did business. It became an international best-seller within one month of its release, appearing on a number of best-seller lists, including the New York Times Business Book list and a seven month run on the BusinessWeek best sellers list. BusinessWeek also named The Digital Economy the top selling business book for 1996.

In the last decade of the 20th century. Nicholas Negroponte (1995) used a metaphor of shifting from processing atoms to processing bits. He discussed the disadvantages of the former (e.g., mass, materials, transport) and advantages of the latter (e.g., weightlessness, virtual, instant global movement). In this new economy, digital networking and communication infrastructures provide a global platform over which people and organizations devise strategies, interact, communicate, collaborate and search for information.

It is widely accepted that the growth of the digital economy has widespread impact on the whole economy. Various attempts at categorising the size of the impact on traditional sectors have been made. The Boston Consulting Group discussed "four waves of change sweeping over consumer goods and retail," for instance. Deloitte ranked six industry sectors as having a "short fuse" and to experience a "big bang" as a result of the digital economy. Telstra, a leading Australian telecommunications provider, describes how competition will become more global and more intense as a result of the digital economy.