Global Digital Economy to Surge to $16.5 Trillion by 2028, Driven by U.S. and China
Report Highlights Rapid Growth in E-Commerce and Technology Spending as Key Drivers
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The digital economy is poised to become a dominant force in global economic output, with projections indicating it will reach a staggering $16.5 trillion by 2028. This growth, outlined in a recent report by Forrester, suggests that the digital economy will account for 17% of the world’s economic activity within the next five years, with a compound annual growth rate (CAGR) of 6.9% from 2023 to 2028.
The report, released on August 19, underscores the substantial role that technology spending, e-commerce in retail, and travel sectors will play in this expansion. Particularly noteworthy is the anticipated growth in online retail and travel, with CAGRs of 9% and 7%, respectively.
The United States and China are expected to dominate the global digital economy, contributing nearly two-thirds of the total $16.5 trillion by 2028. The United States, in particular, is projected to account for 42% of global technology spending by 2024. Meanwhile, China is set to lead in e-commerce, with an impressive 39% of its retail sales occurring online—a figure that could rise to 41% by 2028.
Michael O’Grady, Forrester’s principal forecast analyst, highlighted the World Economic Forum’s prediction that over two-thirds of new value creation in the next decade may stem from digitally enabled platforms. He emphasized the need for countries to invest in digital businesses, public services, digital skills, and research and development (R&D) to remain competitive in the digital landscape.
South Korea, a leader in dedicating resources to R&D, stands out in the report for its focus on areas such as artificial intelligence (AI), AI-related semiconductors, 5G and 6G technologies, the metaverse, and cybersecurity. The country’s commitment to innovation positions it as a key player in the global digital economy.
In contrast, Europe faces challenges in scaling its digital investments. According to the European Commission, the continent requires approximately $138 billion annually for tech growth between 2024 and 2027. However, current projections estimate that Europe’s annual tech spending will only reach €83 billion, indicating a significant gap in the resources needed to keep pace with global leaders.
The report identifies the United States, China, the United Kingdom, Japan, Germany, and South Korea as the six largest digital economies, highlighting the importance of strategic investment in technology and innovation to drive future economic growth.
As the world increasingly embraces digital transformation, these leading nations are set to shape the global digital economy, influencing everything from consumer behavior to technological advancement in the coming decade.
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