The study reveals that digitization plays a vital role in the economy, with more than one-fifth of the world’s gross domestic product (GDP) attributed to some form of digital skills, capital and goods and services.
Germany headquartered consultancy firm, Accenture, provides a range of services in strategy, consulting, digital, technology and operations.
The study provides a new measure of the scale of the digital economy in 11 major countries. It estimates the value added to GDP by hardware, software and related technologies and by workers who need these digital assets to do their jobs. It also calculates the value of intermediate digital goods and services used in production.
US leads the way
A little more than one-fifth (22 percent) of world output is linked to this digital economy of skills and capital. The US is the world’s most digital economy, with existing digital investments accounting for 33 percent of its output. Forty-three percent of the US labor force and 26 percent of its accumulated capital are capable of supporting digital-related activity. The digital economy in other markets varies from more than 30 percent in the UK and Australia to 10 percent in China.
“Businesses and governments are turning to digital to secure faster growth amid an uncertain global economic outlook, but the size of the digital economy is no guarantee of growth” Mark Knickrehm, Group Chief Executive, Accenture, Strategy, said.
“Organizations need to act aggressively in shifting the focus of their digital talent and technology from making efficiencies to creating entirely new business models. That requires not just greater digital investments, but broader organizational and cultural transformation in order to yield the greatest returns.”
The countries with the greatest opportunity for improving their overall digital performance are Brazil (6.6 percent), Italy, (4.2 percent), China (3.7 percent) and Japan (3.3 percent).
The output of the study shows that every economy of the world could boost its revenues through prioritizing and extra efforts. US needs just 10 percent of extra digital efforts to be injected into technology, while a greater return will be gained from boosting digital skills and broader enabling factors. This is how this study has worked out.
Focus on platform business models
In order to get a digitally driven growth, platform business models provide ample opportunities as it allows organizations to create new markets.
“The high growth rates experienced by many digital companies can now be enjoyed by traditional industry incumbents if they apply platform models to create an ecosystem of partners and customers in which they can offer new value added services,” said Bruno Brethon, managing director, Accenture Strategy.
The report recommends three broad actions that can improve the application of digital business models to drive higher levels of productivity and growth:
- Prioritizing digital investments: Assess carefully the balance of digital investments so that an optimal combination of improvements to skills and technology can maximize returns on digital investments
- Compete using an industry-specific digital strategy: Be clear on which platform, what roles, and which data are fundamental to compete successfully in your industry.
- Create the right environment for digital transformation: Improve your “digital IQ,” teaming with government to open up cross-industry relationships and change the rules of competition.