Global digital economy set to hit $21.6 trillion by 2028: Report
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Job seekers attend an employment fair in Beijing. Almost two-thirds of the global digital economy will be powered by the United States and China.
PHOTO: AFP
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SINGAPORE - The digital economy will reach US$16.5 trillion (S$21.6 trillion) and capture 17 per cent of global economic output by 2028, said research and advisory firm Forrester in a report on Aug 19.
Its study measures the size and growth of the digital economy across areas such as tech spend, retail and travel e-commerce, and estimates that the digital economy will see 6.9 per cent compound annual growth rate (CAGR) from 2023 to 2028.
Almost two-thirds of the global digital economy will be powered by the United States and China. The online retail and travel sectors will be the principal drivers behind the growth, at a CAGR of 9 per cent and 7 per cent, respectively.
Mr Michael O’ Grady, principal forecast analyst at Forrester, said: “The World Economic Forum estimates that more than two-thirds of new-value creation over the next decade could come from digitally enabled platforms.
“To nurture the growth of the digital economy, countries must focus on digital businesses, public services, digital skills availability, the growth of R&D (research and development) spend, and tech investments that influence non-digital activities.”
The US has captured 42 per cent of global technology spending, while China has the largest share of the digital economy in e-commerce, with 39 per cent of retail sales conducted online in 2024. This is estimated to rise to 41 per cent by 2028.
The report also indicated that South Korea spends the largest share of its economy on R&D, with focused investment on areas such as artificial intelligence (AI), semiconductors for AI, 5G and 6G, metaverse and cyber security.
On the flip side, digital investment lags in Europe, with average tech-spend growth per year from 2024 to 2027 forecast to reach €83 billion (S$120 billion), significantly lower than the €125 billion required by the European Commission.
The top six digital economies by size are the US, China, UK, Japan, Germany and South Korea. THE BUSINESS TIMES
