The digital economy is on a rapid ascent, expected to reach $16.5 trillion by 2028 and make up 17% of the global GDP. This surge is largely driven by the booming online retail and travel sectors, solidifying the digital economy as a central part of modern life. However, marketers are still working to keep pace with these evolving digital trends with varying degrees of success.
According to the recent Forrester report, “Global Digital Economy Forecast, 2023 to 2028,” the U.S. and China account for nearly two-thirds of this growth. Online retail and travel are projected to expand their share of the digital economy with a 9% and 7% compound annual growth rate (CAGR) from 2023 to 2028.
The report identifies four key areas contributing to digital economy growth: digital businesses, the availability of digital skills, digital public services, and digital research and development. Growth in these areas differs by region, with notable disparities. By 2028, South Korea is expected to have the most balanced and extensive digital economy, contributing 31% of its GDP, whereas Mexico and Brazil are forecasted to contribute only 10% and 8%, respectively. China and Australia also show significant growth potential, particularly in government and enterprise tech spending.
Digital businesses, especially those funded by advertising, are pivotal in driving this growth. Valuing free, ad-supported digital goods could potentially expand the digital economy by 25%. Despite this potential, challenges remain, such as the EU’s lower adoption rates of cloud services and data-driven decision-making.
As digital businesses expand, the demand for skilled talent rises, with cybersecurity alone facing a shortage of 3.5 million jobs in 2023. This shortage could impact automation efforts and broader digital economy growth.
Tech spending is not solely driven by private sectors; U.S. government investments will account for nearly 20% of tech expenditures. To sustain global economic scaling, public sector tech spending must hit $881 billion by 2024.
A thriving digital economy is underpinned by robust research and development, making it a crucial element for future success.
