• by Laurie Sullivan  @lauriesullivan, August 12, 2024

The global digital economy will grow at a 7% compound annual growth rate (CAGR) from $11.8 trillion in 2023 to $16.5 trillion in 2028, according to new data.

The report -- made public Monday by Forrester Research -- ranks the top six digital economies by size as U.S., China, the U.K., Japan, Germany, and South Korea.

The U.S. digital economy will rise by 6.4% CAGR from $4.4 trillion in 2023 to $6 trillion in 2028. 

Gains from digital platforms are not equitably distributed, with Microsoft, Oracle, SAP, and Amazon capturing 39% of global commercial software market in 2023. Amazon, Tmall, JD, Pinduoduo capturing 53% of global B2C ecommerce in 2023.

As part of the forecast modeling, Forrester developed historical and base-year market-size estimates based on a variety of sources such as public financial documents, executive interviews and analysis of internet traffic.

Online retail and online travel have become the main drivers, with both expected to increase their share between 2023 and 2028 at a CAGR of 9% and 7%, respectively. 

More than two-thirds of the digital economy is driven by the U. S. and China. The U.S. -- although it has only 4.2% of the global population and 26% of global GDP -- captures 42% of global technology spend. 

About one-third of the digital economy is driven by technology spend. France, Italy, Spain, Canada, Brazil, U.S., the U.K., Japan and Germany are leading contributors to their respective digital economies because of significant technology spending.

Digital economies vary widely by country. By 2028, the digital economy will drive 31% of South Korea’s GDP, but only 10% of Mexico’s and 8% of Brazil’s.

South Korea has the largest and one of the most balanced digital economies across consumer and business spend, with significant room for government and enterprise tech spend growth in China and consumer digital spending in Australia.

The report, Global Digital Economy Forecast, 2023-28, measures size and growth of the digital economy across tech spend, retail, travel ecommerce, insurance ecommerce, ICT exports, chip manufacturing, and data centers.