The eco-digital economy, which combines digital advancement with sustainability, is projected to nearly doubled from $16.6tn today to approximately $33tn in 2028, according to a new report by Capgemini in collaboration with the Digital Data Design Institute at Harvard. The report titled "The Eco-Digital Era: The dual transition to a sustainable and digital economy" also unveiled that this expansion equates a Compound Annual Growth Rate (CAGR) of 15%.
The report highlights that, over the next five years, investments in digital transformation in Australia are expected to provide the most significant returns. Current expectations stand at 6%, but this is predicted to surge to 14% in 2028. Notably, this compares to a global estimate of 4% to 14% over the same period.
Notably, implementing digital technologies has facilitated organisations in Australia to decrease their energy usage by over a quarter (25%). This transition has also allowed a 14% reduction in Greenhouse Gas (GHG) emissions in the last five years. On a wider scale, the report emphasises that 77% of organisations in Australia acknowledge the shift towards an economy that emphasises both digital and sustainable aspects.
Reflecting this perceptible shift, 20% of organisations in Australia have formed dedicated software teams to enhance their digitisation strategies. Hence, almost 40% of the total workforce is expected to be committed to digital initiatives within the next three to five years. With these findings, it can be argued that we are entering an era marked by dual transitions to an eco-digital economy, spurred by not only financial rewards but also environmental and societal gains.
Dr. Suraj Srinivasan, Philip J. Stomberg, Professor of Business Administration at Harvard Business School and Head of the Digital Value Lab at the Digital Data and Design Institute at Harvard, commented on this emergent trend: "In the eco-digital era, there is greater exploration of digital technologies’ value to business. There is also a fast evolution of emerging tech such as generative AI and synthetic biology, and greater collaboration giving rise to digital ecosystems. This shift is truly fundamental, cross-sectoral, and global in nature."
Interestingly, the report also highlighted that it is the mainstream technologies, such as data and analytics and cloud scaling, that organisations believe will deliver the most potent business benefits over the next five years. Nonetheless, almost half of organisations (48%) are either planning or actively developing strategies to harness potential emerging technologies like edge computing and generative AI.
Fernando Alvarez, Chief Strategy and Development Officer at Capgemini and Group Executive Board member, elegantly summarised these trends: "We are at the dawn of a new transformative era and we have only scratched the surface of how digital technologies can help expedite the delivery of substantial economic, environmental, and societal benefits."