How to capture value in the fast-growing digital economy

  • INSIGHTS  |
  • 17/12/2019  |
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How to capture value in the fast-growing digital economy



The recently published UN Digital Economy Report is a 200-page deep-dive into the way the fast-growing digital world is affecting the real world. The main takeaway is that this digital growth has proved fiscally fantastic for the wealthy but still needs to be leveraged to benefit the less economically developed parts of the world.

The data driven economy is a potential gold mine for developing nations that can become producers and innovators. However, only a decade remains to achieve Sustainable Development Goals (SDGs).

Digital disruptions have made tremendous wealth in a very short time for a small number of countries, companies and individuals. They have also made a lot of hard work for policy makers in countries at all levels. There now needs to be better global cooperation to avoid further widening the income gap.

Fast growth breeds new business

The digital economy has boomed with IP traffic growing from 100GB per day in 1992 to a mind-boggling 45,000 GB per second in 2017. By 2022 the projected traffic level is expected to hit 150,700 GB per second.

All this data has developed new types of business to support and leverage the growth. This new “data value chain” has evolved to support data collection, data insights, data storage, analysis and modelling. It’s when data are transformed into digital intelligence that they can be monetized through commercial use.

The second way to capitalize on data growth is by platforms that disrupt existing industry. Seven of the world’s top eight companies, by market capitalization, use platform-based business models. The combined value of the platform companies in 2017 was $7 trillion.

The result of digitization leads to the production of higher quality goods and services at reduced costs, opening up new channels for value addition and broader structural change. Measuring this value is difficult but it’s estimated the digital economy ranges between 4.5 and 15.5 per cent of world GDP. For Information and Communications Technology (ICT) the United States and China account for a massive 40 per cent.

To help Less Economically Developed (LDC) countries, the UNCTAD (United Nations Conference on Trade and Development)’s Rapid eTrade Readiness Assessment can assist as this identifies areas for improvement and policy intervention that could help alleviate bottlenecks for future growth.



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