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Digital density index: Guiding digital transformation

How governments and business leaders can measure and manage digital strategies to drive US$1.36 trillion in growth.

Overview

Leaders of businesses and countries are being told that “going digital” is the pathway to growth and prosperity. Now they have a new way to understand, measure, and manage digital strategies to drive growth and competitiveness.

New research from Accenture empirically links the adoption and use of digital technologies with quantifiable improvements in productivity that can boost competitiveness and economic growth.

More importantly, it shows where and how to invest in digital technology to achieve results. Using an index that emerged from our research, decision makers can measure and track the “digital density” of economies and industries—that is, the extent to which economies or industries use digital technologies for economic activity. Decision makers can also determine how shifting or emphasizing different indicators can boost economic performance. Doing so is a vital first step for governments looking to take a broader view in fostering the digital transformation of their economies, and for businesses seeking to use digital technologies to drive growth.

Key Findings

Joint analysis by Accenture and Oxford Economics shows how digital technologies can be harnessed to unlock faster economic growth, adding as much as US$1.36 trillion to the GDP of the world’s top 10 economies by 2020—2.3 percent more in real terms than currently forecast.

Digital density can be increased by shifting or emphasizing more than 50 indicators across four broad activity areas of a business or economy, which include:

  • The increasing digitalization of existing markets and creation of new digital markets

  • Businesses’ use of digital technologies and activities to execute key business functions

  • The use of digital technologies to source and/or use factors of production such as land, capital, talent, plant, and property

  • Changes in institutional and socio-economic environments to facilitate digitalization.

Recommendations

While indicators in the Accenture Digital Density Index can help pinpoint specific areas for improvement, governments and businesses must think differently about digital technology to capitalize on growth opportunities. For example:

  • Governments must rethink how they view disruptive new business models and stop protecting outdated industry boundaries, while businesses need to engage with governments in new ways.

  • Businesses and governments should increase their use of digital technologies to transform business processes and improve efficiency and productivity.

  • Economies and businesses must use the Internet of Things and other digital technologies to enhance access to and the use of vital factors of production such as land, talent, capital, and ideas.

  • Governments and businesses must work together on enablers beyond technology infrastructure to create an environment in which digital can flourish.

  • Businesses should consider digital density a critical criterion in deciding where to expand or locate.


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