The Digital Economy

The digital economy is approaching a critical tipping point. In just a few short years, IDC predicts that half of all GDP worldwide will come from products and services offered by digitally transformed companies.

To get to that point, organizations face a challenging timeline over the next three years. By the end of 2019, IDC predicts that 46% of organizations will be set up for a successful digital transformation – these are among the “digitally determined.” In 2020, these organizations will spend $1.3 trillion on the technologies and services that enable the digital transformation of their business models, products and services, and organizations.

And by 2022, 46% of global nominal GDP — $100 trillion — will be derived from digital products and services. In 2018, this percentage of global nominal GDP derived from digital products was less than 17%.

Figure 1: The Digital Economy is on the Horizon

Source: IDC Digital Economy Model, 2019

To become a digital leader, organiations must put in place a multiyear, multi-horizon, and integrated process for digital innovation and transformation investment planning.

It’s critical to understand the success factors for executing the digital innovation agenda: revamped and extended infrastructure, new approaches to developing digital apps and services, extensive leverage of intelligence, commitment to ensuring trust, massively expanded digital supply and distribution ecosystems, and expanded digital imagination (to visualize and create new multi-industry solutions).

Those enterprises that emerge as leaders in this new business landscape:

  • Have a long-term investment strategy based on the principle that data is inherently valuable to the business. Digital initiatives are built around creating, delivering and acting on data faster and more creatively, not just once, but continuously.
  • Adopt a single enterprise strategy from cloud to core to edge. The entire organization rallies around a single, cross-cloud and cross-location strategy instead of trying to coordinate multiple distinct strategies rooted in various lines of business and functional areas.
  • Leverage a single operational platform to scale innovations. They can scale development (DevOps), data (DataOps), and security (DevSecOps) operations via a common digital platform across the organization.
  • Are resolute in making the required organizational and cultural changes. They are committed to embedding digital throughout the organization as opposed to residing in separate digital/cloud centers of excellence.

Direct digital transformation investment will be $5.5T through 2021