Smarter use of digital skills, tech, could boost global economy by $2 Trillion: Accenture

BUSINESS

|
Image: By BiztechAfrica
Smarter use of digital skills, tech, could boost global economy by $2 Trillion: Accenture

Optimizing the use of digital skills and technologies could generate $2 trillion of additional global economic output by 2020, according to a new study by Accenture.  The study also reveals the vast role digital plays in economic activity, 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.

The Accenture Strategy report, Digital Disruption: the Growth Multiplier, provides a new and comprehensive 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.

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 U.S. labour 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 13 percent in China.

Digital share of GDP

“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,” said Mark Knickrehm, group chief executive, Accenture Strategy. “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 report states that in order to generate higher rates of growth, companies will need to improve their Accenture Strategy Digital Density score, which tracks the extent to which digital penetrates a country’s businesses and economy. This includes digital skills and technology, as well as broader enabling factors such as the ease of access to finance and the openness of a country’s regulatory environment.

For example, a 10 point increase in the overall digital density of the U.S. economy would result in a $368 billion uplift to 2020 GDP, 1.8 percent higher than current forecasts. But Accenture Strategy calculates that an optimal combination of improvements to digital skills, capital and other accelerators could lift U.S. GDP by an even greater $421 billion by 2020, representing a 2.1 percent boost.   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).

Digital impact on GDP

The study shows how each national economy could best prioritize its extra efforts to achieve the greatest boost to revenues and economic output. For example, 70 percent of Brazil’s extra digital efforts should be focused on the improved application of technology, such as cloud and analytics, whereas greater efforts in digital skills would generate less of an economic return. In the US, however, just 10 percent of extra digital efforts need to be injected into technology, while a greater return will be gained from boosting digital skills and broader enabling factors.

Platform based models are the key to growth

According to the report, platform business models represent one of the greatest opportunities for digitally driven growth. These models allow organizations to create new markets and uncover value by bringing partners and customers together across a common digital platform. In many cases, platform players can enjoy strong growth without having to own or manage assets, helping them expand with low marginal costs.

While ‘born digital companies’ dominate the platform economy today, the Accenture Strategy report suggests  that traditional industry incumbents could be among the greatest beneficiaries of platform strategies by combining their customer reach and product portfolios with the networking power of the platform.

“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 Berthon, managing director, Accenture Strategy.  “Companies need to shape their platform strategies and define their role as platform leaders or participants before aggressively forming partnerships that can deliver new value.”

The report recommends three broad actions that can improve the application of digital business models to drive higher levels of productivity and growth:

· Prioritize digital investments based on value opportunities: 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.



Share the News

Get Daily Newsletter

Search News

comments powered by Disqus

MORE BUSINESS NEWS

FNB, PayPal bring global eCommerce to Botswana

Ogone Madisa-Kgwarae First National Bank (FNB) has announced it will be extending the partnership between FNB and PayPal to offer the PayPal Withdraw Service, previously available only in South Africa, in Botswana. Read More

Survey: businesses have less than two years to make digital inroads

Progress has announced the results of its recent global survey: "Are Businesses Really Digitally Transforming or Living in Digital Denial?"  Read More

Gartner: profit opportunities exist for PC vendors

The worldwide PC market registered one of its lowest quarterly growth rates in the first quarter 2016, but Gartner, Inc. said several profit opportunities exist for PC vendors. Read More

MTN Business makes headway to be an ICT Partner of Choice

MTN Business, the enterprise business unit of MTN SA, plans to focus on three key areas in a bid to become the ICT partner of choice, namely, getting the basics right, accelerating growth and diversifying its revenue streams. Read More

MTN Ghana celebrates 20 years of operations in Ghana

MTN Ghana has unveiled its 20th Anniversary logo at a grand ceremony held at the iconic MTN House in Accra to officially mark the 20 years of operations in the country.  Read More

Copy Cat bets on innovation to grow market share

Kenyan technology company Copy Cat Group is implementing a new transformational strategy to increase its market share in the ICT market.  Read More

Infrastructure investments highlight bright spots for SSA economic diversification

The commodity super cycle may have ended, but there are certainly bright spots for investors across sub-Saharan Africa, IHS has told the World Economic Forum on Africa. Read More

Africa’s CEOs look to innovation and technology to stimulate growth

CEOs in Africa are ramping up their efforts to innovate and find new ways to do business on the continent, according to PwC’s Africa Business Agenda released at the 26th World Economic Forum on Africa in Kigali. Read More

4th Africa Business Forum to be staged in Ethiopia

Registration is open for the 4th Africa Business Forum to be held on Wednesday, June 1st, 2016 at the Sheraton Hotel, Addis Ababa, Ethiopia, East Africa. Read More

Airtel divests telecoms tower assets in DRC to Helios Towers Africa

Bharti Airtel International and Helios Towers Africa have announced an agreement for the divestment of approximately 950 telecoms towers in the DRC from Airtel to Helois Towers Africa.  Read More

PRESS OFFICES

Sage EnterpriseSAP AfricaTrust PayVMWareSamsung ElectronicsMitsumi DistributionPhoenix DistributionMTN BusinessSchneider ElectricMultichoiceMicrosoft 4AfrikaNetworks UnlimitedArbor Networks
Advertisement

FEATURED STORY

Government should encourage youths in ICT earlyGovernment should encourage youths in ICT early

Youths should be given more encouragement to develop their ICT skills, an 11-year-old app developer told Kokumo Goodie.

IN DEPTH

IBM Opens First Cloud Data Centre in South AfricaIBM Opens First Cloud Data Centre in South Africa

IBM is opening a new IBM Cloud Data Centre in Johannesburg, South Africa. The new cloud center is the result of a close collaboration with Gijima and Vodacom and is designed to support cloud adoption and customer demand across the continent.  

COMPANY NEWS

Enhancing your security posture to fight new ransomware threats

Petya ransomware is proving to be one of the top cybersecurity stories of 2016. 

Arbor stops malware in its tracks

There is always a substantial amount of banking trojan activity taking place, however, recent developments have intensified the threat landscape.