How Digitized Is Our World?
New technology is speeding up processes of digitization, with economies and job markets to be the first to feel the impact.
Strategy&'s econometric analysis estimated that despite the uncertainty in the global economic climate, digitization has already provided a $193 billion boost to the world's economic output, and created 6 million jobs globally in 2011. The positive impact of digitization is uneven due to differences in the state of the economies of developed and emerging markets. Developed economies enjoy the impact because it improves productivity and usually has a measurable effect on growth, but it also affects the job sector, due to a high demand for cheaper labour. Emerging economies are driven by treatable sectors and exports, therefore, digitization improves their employment rates, but has a slower impact on their economy growth.
To get the most out of digitization, it has to be diffused within both the economic and social sectors of the nation. According to the Digital Index, calculated for the United Nations Commission on Science and Technology, out of 150 countries, only 58 are at the advanced stage of digitization, and nearly 60 were placed on the limited stage of digital development.
In the corporate environment, the influence of new digital technologies and the Internet of things is capable of providing sustainable growth. Gartner Inc. research suggests that 75% of businesses are going to be digital by 2020. There are, however, difficulties in digital implementation, such as affordability and complexity in its adoption, which puts many businesses at risk of becoming isolated and not capable of catching up with innovation.
There is some good news coming from developed economies, as emerging technology will be able to speed up the transformation. There are hopes that the appearance of 5G connection will streamline the transmitting of even larger amounts of data that is needed for connected intelligence and a better performance of the digital devices. It is rumored to be launched in 2018, although the real impact of it would not be visible until 2020.
Digitally connected devices are capable of creating a connected society, and in a result, we may have cities and countries, where almost everything is digital. Dubai can potentially become one of those cities and according to his Highness Sheikh Mohammed bin Rashid Al Maktoum, it will be the smartest city in the world by 2017. Sensors are already embedded throughout the city and will connect utilities, urban transportation, energy, entertainment, policing and even politics. Such improvement is predicted to produce an added value of $4.7 billion by 2019.
There are not many ways to escape digitization, as neither businesses or societies want to become obsolete. However, digitization is bringing as many challenges as opportunities it creates, with the business world has to adjust to the new digital routine fast enough so it doesn't suffer from losses, regulation changes or legal challenges. According to the World Economic Forum, there is an overall 10% increase in the digitization index amongst countries, which can result in a 0.75% rise in GDP and a 1.02% drop in unemployment. However, there may be job losses amongst the roles that will be replaced by digital services. The job market will have a chance to recover, though, as new software industry roles will be needed to maintain those digital services and create new ones.
To better position your brand in this new digital age, check out the upcoming Digital Strategy Innovation Summit.