Digital Economy Trends You Need To Know (And Not In The Meeker Report)

Danielle Beurteaux

digital economy Each year, Mary Meeker of venture capital firm Kleiner Perkins Caufield Byers releases her Internet Trends report, a compendium/exhaustive review of what’s happening online in 196 PowerPoint slides.

But we’re transitioning from an Internet economy to a digital economy, and we have our own take on trends.

Hyperconnectivity is pushing global business

Hyperconnectivity isn’t just speeding up globalization; it’s putting international business within the reach of enterprises of all sizes.

Until recently, a really global business was pretty much the purview of large companies, but there is a growing sector of small- and mid-sized companies—“micro-multinationals”—that have are now able to operate around the world.

Smart manufacturing is on the rise—sloooooowly

Smart manufacturing has been on the radar for years, but implementation has been sluggish. Only 13 percent of U.S. companies, according to an American Society for Quality survey from December 2013, currently employ smart manufacturing, and 37 percent aren’t interested in it.

Smart manufacturing will likely a boon to workers in developing economies, but those benefits won’t be experienced in developed countries, where jobs will be pared down parallel with growth.

Internet of Things: Growing in leaps and bounds

A research report from Gartner forecasts the number of installed IoT-enabled devices will hit 26 billion by 2020. Compare that with the measly 0.9 billion in 2009.

Insecurity and connectedness

Hyperconnectivity might by the great connector, but IT company EMC Corporation’s Privacy Index, a survey of 15,000 people in 15 countries, found 53 percent of respondents valued suggestions for social connections, but only 31 percent would be willing to trade privacy for them. On the other hand, 40 percent would make the privacy trade for better travel planning (oddly, the same percentage for protection from terrorist attacks).

One response to these concerns are sites that protect and manage personal data, like MyDex and The Locker Project, and promise users control over their data. If services such as these have high adoption rates, the relationship between businesses that gather and monetize or otherwise use consumer data and consumers could fundamentally change.

Many have little or no access

Around 60 percent of the global population is not online, for a variety of economic and infrastructure reasons. For example, a McKinsey report from March 2013 says that only 10 percent of India is online, and expected that number to triple by this year. But that’s still only a third of the (admittedly very large) population. (Also, keep in mind that cash is still the dominant form of payment in India.) In 2013, World Bank figures put India’s GNI at $1570 USD per annum. So for many, even an inexpensive smartphone or tablet won’t be within reach for a long time.

If and when that happens…

A Deloitte report found that if low-Internet usage countries increased usage on par with high-use developed countries, GDP growth rates would increase by 25 percent, GDP would increase by $2.2 trillion, add almost 140 million new jobs, increase incomes, and improve healthcare and education.

For more about where the digital economy is headed, look at the Economist Intelligence Unit report The Hyperconnected Economy.

Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.