This is not just theoretical or hypothetical. Data shows that the digital economy has been growing consistently faster than the traditional economy for several years. The COVID-19 pandemic has greatly accelerated this digital transition. For many small and medium-sized businesses it became “go digital or disappear.”
One of the best studies to date, conducted by the International Telecommunications Union, also empirically demonstrates the importance of increasing fixed and mobile broadband access to citizens and businesses. The ITU found that a 10% increase in mobile broadband penetration in a country led to a permanent increase in GDP of 1.5% between 2007 and 2019. The impact was even more pronounced for developing countries.
In the report Intelligent World 2030 we see that global connections will exceed 200,000 million; monthly data per cellular user will grow 40 times to 600 gigabytes; the overall computing volume worldwide will multiply by 10 and the data generated will increase 23 times, reaching one yottabyte (YB is a unit of measure for the computers of the future and contains 1,000 zettabytes or 1024 bytes) for the first time. All of this shows new challenges and opportunities for the digital infrastructure sector for the next decade.
A Boston Consulting Group study recently conducted in more than 20 countries shows 9 common challenges in the development of the digital economy (especially in developing countries) including: digital infrastructure, adoption in SMEs, talent, financing, regulation, environment of innovation, electronic government, strategic planning and government organization, highlighting that the three most commonly seen challenges among the countries studied are:
– Infrastructure: limited in terms of fixed or mobile broadband coverage, performance or affordability.
– And adoption of SMEs– Insufficient support to drive business adoption.
– But talent is still the most common obstacle: lack of highly productive local talents with advanced digital skills due to insufficient push in technology upgrade, education reform, or incentives to retain talent.
For any government that is constrained by resources and other competing priorities, it is suggested that focusing first on these three areas can go a long way toward driving innovation.
Digital innovation capacity is exponentially related to the overall economic power of a country. Once economic strength has risen to a certain level, innovation performance also forms a barrier to the gap with laggards; Each country should be compared to similar countries to identify realistic goals.
Thus, the case for a digitally-driven economic recovery is compelling. And I believe that government has a bigger role to play than in previous economic revolutions, in helping to support and shape the digital journey, where social returns will far exceed private returns.