|22 January 2016|
Digitisation has the potential to create upwards of $100 trillion for society and industry over the next decade, according to new research by the World Economic Forum.
The Forum’s Digital Transformation of Industries (DTI) project focuses on the ‘combinatorial’ effects of digital technologies – mobile, cloud, artificial intelligence, sensors and analytics, among others.
Examples of societal value generated by digitisation include mass adoption of autonomous vehicles and usage-based car insurance, which could save up to 1 million lives a year worldwide by 2025. In the electricity sector, a cumulative reduction in carbon emissions worth $867 billion by 2025 could be achieved through the adoption of digital technologies, principally through smarter asset planning.
The pace of innovation can be illustrated by the fact that, while it used to take Fortune 500 companies an average of 20 years to reach a billion-dollar valuation, digital start-ups are reaching the same milestone in just four years. The research suggests that, once limitations preventing the mass-market commercialisation of enabling technologies such as battery storage and wireless charging are overcome, the pace of change could accelerate.
“Society and the environment stand to gain the greatest share of the rewards from digitisation through improvements to welfare, health and other means. To capitalise fully, however, policy-makers must put in place an agile regulatory environment and incentive mechanisms that unlock investment, while businesses must fully embrace sustainable business practices. There is a win win for business and society if we can look beyond immediate commercial gain in favour of long term value creation,” said Mark Spelman, co-head, Future of the Internet Initiative, World Economic Forum.
“This in-depth industry analysis proves that there can be no business strategy today without digital strategy. Being digital means being ready to go beyond technology investments to embrace wider organisational and cultural change,” said Mark Knickrehm, Group chief executive, Accenture Strategy, Accenture, USA.
“To succeed, business leaders must be able to balance existing capabilities with big-bet investments in entirely new digital business models. And they must be prepared to take risks with partners across industry borders,” he said.
The DTI initiative serves as the focal point for new opportunities and themes arising from digitisation. It has been informed by over 230 expert interviews from business, government and academia and engagement with more than 100 of the Forum’s Partner organisations. For the complete set of findings, click here.