According to Forrester's new report, 'Global Digital Economy Forecast, 2023-2028,' the global digital economy will grow to US$16.5 trillion in 2028 from US$11.8 trillion in 2023 at a 7% compound annual growth rate (CAGR).
Growth drivers
The US and China will drive more than two-thirds of the digital economy. The UK, Japan, Germany, and South Korea are other geographic drivers of the industry's growth.
Online retail and travel will drive growth in the digital economy industry. They are expected to increase their share of the global digital economy from 2023 to 2028 at a CAGR of 9% and 7%, respectively.
Global digital economy
With 39% of retail sales bought online in 2024, consumer e-commerce captures China's most significant share of the digital economy. Forrester projects it to rise to 41% by 2028.
In Australia, online retail and travel comprise the most significant share of the digital economy. According to the report, 18% of Australian retail sales are online.
Tech spend drives over a third of the digital economy. Due to significant technology spending, Japan is among the leading contributors to growth in this area.
In India and South Korea, ICT product and service exports drive the largest share of their digital economies. Forty-four (44%) of India's digital economy comes from ICT exports.
Due to trade tensions, semiconductor manufacturing has also been reported to shift from regions like Taiwan to domestic markets.
Further, the report forecasts that Japan will be among those who invest over the next ten years to triple domestic chip production.
Nurturing growth
Forrester recommends that countries focus on digital businesses and public services, digital skills availability, and the growth of R&D spending to nurture the development of the global digital economy.
