Economic growth and technological innovation have always been inextricably linked. Today, challenging economic conditions on the domestic, regional and international fronts are putting new attention on the need for greater investment in the development of the digital economy generally and the Internet economy specifically.
The Internet economy encompasses consumer consumption (including online purchases and Internet access), private and public investment, and net exports. During the past two decades alone the Internet has transformed industries and entire sectors and has become a powerful driver of economic growth. Measured as a separate industry the Internet economy is already outpacing some formidable traditional economic go-to sectors in developed markets.
According to an analysis by the Boston Consulting Group, the Internet contributes as much as seven per cent or eight per cent of gross domestic product (GDP) in some countries; and in every country, its size and impact on the economy is expected to increase.
In the United States it now accounts for a larger slice of GDP than the federal government. In the UK, France and Australia it already has a higher percentage of GDP than Agriculture.
In China it is among the top six industry sectors, surpassing education, hospitality and utilities. In South Korea it is among the top five and it is poised for even further growth.
By 2016, the researchers say, three billion people - half the world’s population - will be online. The majority of them will be using mobile devices to access the web, which means they’ll be able to make purchases anywhere, anytime, once there is an available Internet connection.
The statistics on the rapid growth of the global digital economy present a compelling argument. The growth of the digital sector is not just about Web sites, mobile apps, and tech firms. For producers of technology goods and services, it affects labor markets, exports and foreign exchange earnings. It also has a positive spill over impact on the education sector, investments markets and supporting service industries.
The research firm IDC, reports that the size of total worldwide e-commerce, when global business to business and consumer transactions are combined will equate to US$16 trillion in 2013.
When added to the global market for digital products and services (which the French technology research firm iDate estimates at US$14 trillion in 2013) the total size of the global digital economy is estimated at US$20.4 trillion, equivalent to roughly 13.8 per cent if all sales flowing through the world economy!
Given the magnitude of these numbers it is clear that developing the digital economy should be a priority for any county serious about securing its economic future; particularly in emerging markets like those in the Caribbean, Latin America, Africa and the Pacific.
Understanding the scope and implication of this staggering growth will be critical for business executives, politicians and educators as they make decisions about investments, policy, strategy that impact both social and economic development.
Executives and government leaders must be aware of the opportunities as well as the challenges that attend the digital economy. More importantly they must understand the levers that determine digital success or failure. To operate successfully on the global digital playing field, organisations and governments must reorganise to embrace the reality of the digital economy.
This shift, properly enacted, can have profound positive implications for sustainable economic growth and social stability.
Education, infrastructure, electronic commerce, intellectual property protection and innovation are critical components. Each requires clear national policy backed up by accessible implementation mechanisms. Lip service will not suffice. Neither fortune nor favor is on the side of those countries or companies that are slow to act.
Economies in emerging markets, faced with the opportunity to redefine the moorings of their economic development, can choose to stick to the traditional sectors and hope for a global rebound.
Alternatively, they can embark on an entirely new, digital path. What is at stake goes well beyond the technology sector and even beyond the economic growth it facilitates. The path chosen will testify to the quality of leadership for this generation.
No action should be without a philosophical underpinning; no journey with out a sense of the destination. For the Caribbean, our investment in the digital economy must be tied to our vision for our future. That future is based on the natural creativity of our people, our collective faith and our proven capacity to compete on the world stage....and emerge victorious.
Our decisions, for better or for worse, will be a statement to the next generation of the seriousness of our resolve to leave them an inheritance upon which their lives and the future of our Caribbean society will be based.
The digital economy will continue to grow apace. It is now for us to decide if we will miss our moment and be steamrolled by it, or seize the opportunity to grow with it.
Bevil Wooding is the Founder and Executive Director of BrightPath Foundation, an education-focused not-for-profit delivering values-based technology training programs including digital publishing and eBook creation workshops. He is also Chief Knowledge Officer of Congress WBN.
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