Towards a Digitized Economy

By Bukola Olanrewaju

The global economy is experiencing massive, accelerated digital transformation, resulting in the creation of new business models, innovative products and services, and very different ways of doing business.

As the digital age is transforming everything: the nature of markets and products, how to produce, how to deliver and pay, the scale of capital to operate globally, and human capital requirements, it is also boosting productivity, exposing companies to new ideas, technologies, new management and business models, and creating new channels of market access.

A digital economy is built on digital platforms that facilitate business processes and enable better economic value. The new economy highlights the inescapable hyperconnectivity of people and businesses, expanding the connections between people, organizations, and machinery through the internet, mobile technology and IoT.

The expansion of connectivity, infrastructure, network-effects, falling computing and sensor costs, open software architectures, and the deregulation of digital markets are accelerating the adoption and use of digital technologies and enabling the emergence of a whole new generation of investment and business models.

The global digital economy estimated at $11.5 trillion, about 16 percent of the global economy), World Bank estimates that the digital economy contributes to more than 15% of global gross domestic product (GDP) and in the past decade it has been growing at two and a half times faster than physical world GDP.

The digital economy is growing exponentially every year, and this is expected to continue at an accelerated rate in the near future.

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In Nigeria, digital economy is valued at approximately $100 billion in terms of revenue flow. Emerged data also revealed that the financial services within Nigeria’s digital economy could add US$88 billion and create over 3 million new jobs over the next 10 years.

Further studies indicate that potential gains of the digital economy will be manifest in digital accounts, payments, mobile money, health and educational services and other sectors of the economy.

In the past four years, Nigeria’s digital economy space has recorded over $4.4 billion investments as a result of strategic collaborations and programmes. The Director-General of National Information Technology Development Agency (NITDA), Kashifu Inuwa recently stated that the country stands to gain a whopping $230 billion in GDP growth by the year 2025.

 

However, for digital technologies to impact economic development, however, appropriate policies have to be in place to remove the obstacles preventing emerging economies from fully engaging in the digital economy and optimising the benefits, while minimising the risks, the International Institute of Sustainable Development has said.