Nope. Digitizing is the process of setting all the needle pokes, trims, color changes. It can be done with or without underlying artwork. If you want to auto digitize then you will need vector art but the results will need to be edited.
Hi, yes a decent quality JPEG is usually good enough for the job (assuming you have the right software & knowledge to do it yourself).
If not then send it away & get it digitised properly, it will be well worth it and produce professional results. There are many many digitising companies out there.
More detailed designs require higher resolution artwork. Correctly size the artwork. If its too pixelated for you to clearly see then you need higher resolution artwork. Poor quality artwork can negative impact the quality of a digitized design. If the digitizer can't see how a font is shaped then he can't correctly reproduce it.
When I receive poor quality artwork I ask my customer if they can supply a higher resolution file. Many times they have multiple file formats and don't know what to send. If you need to have artwork vectorized pass that cost on to your customer.
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