The global digital economy will reach US$16.5 trillion and capture 17% of global GDP by 2028
The World Economic Forum forecasts that over the next decade, more than two-thirds of new value creation could be driven by digitally enabled platforms. In its latest Global Digital Economy Forecast, consulting firm, Forrester evaluates the growth and scale of the digital economy through various sectors, including technology expenditure, retail and travel e-commerce, insurance e-commerce, information and communication technology (ICT) exports, chip manufacturing, and data centers.
The largest digital economies are the US, China, the UK, Japan, Germany, and South Korea. From 2023 to 2028, the digital economy is expected to grow at a compound annual growth rate (CAGR) of 6.9%, outpacing global GDP growth. Key drivers of this expansion include:
- E-commerce, Tech Spending, and Exports: Online retail and travel are set to increase their shares of the digital economy, with 9% and 7% CAGR from 2023 to 2028, respectively. Technology spending is the major contributor to digital economies in countries such as France, Italy, Spain, Canada, Brazil, the US, the UK, Japan, and Germany. In contrast, ICT product and service exports are most significant in India, South Korea, and Mexico.
- The US and China: Together, the US and China account for nearly two-thirds of the global digital economy. The US, representing 4.2% of the global population and 26% of global GDP, commands 42% of global technology spending. In China, e-commerce leads the digital economy, with 39% of retail sales projected to be online in 2024, rising to 41% by 2028.
- Digital R&D Spending: There is a clear correlation between a country’s R&D spending as a percentage of GDP and its share of the digital economy. South Korea invests the highest proportion of its economy in R&D, focusing on AI, AI-specific semiconductors, 5G and 6G, quantum computing, the metaverse, and cybersecurity. Meanwhile, India’s Digital India futureLABS initiative aims to boost R&D and innovation investments. In Europe, digital investment lags, with annual tech spend growth forecasted at €83 billion from 2024 to 2027, falling short of the €125 billion needed to meet the European Commission’s digital growth targets.
To support the growth of the digital economy, countries need to emphasize digital businesses, public services, digital skills development, R&D growth, and technology investments that impact non-digital activities. According to Forrester’s Global Digital Economy Forecast for 2023 to 2028, the digital economy is expected to reach $16.5 trillion and represent 17% of global GDP by 2028 across 14 countries in North America, Europe, APAC, and Latin America.
