For the past 23 years, connectivity has been at the center of the Internet revolution. For policy makers worldwide, investing in ICT infrastructure became a centerpiece of economic planning. And it’s a strategy that’s paid off. From 2002 to 2017, the digital economy grew at a rate two-and-a-half-times faster than global GDP, reaching US$12.9 trillion by 2017 or about 17.1% of global GDP.
Intelligent Connectivity can trigger innovation on a scale previously unknown. The resulting new business models and applications will change the way business is run and how products and services are consumed. It will drive expansion of the digital economy.
In this post, I give an overview of how investment in ICT infrastructure and artificial intelligence solutions can benefit enterprises, industry verticals, and thus national economies.
Intelligence Will Drive Productivity
The next wave of dramatic growth in the digital economy will come from industrial digitalization. By leveraging intelligent technologies, traditional industries will be well-positioned to maximize digital spillover and contribute more to the overall digital economy.
Here are a few examples:
- Intelligent manufacturing is connecting the dots along the value chain, with the sector expected to reach a value of $6.4 trillion by 2025. Intelligent Connectivity enables manufacturers to unlock underleveraged value along the supply chain for process optimization, productivity improvements, and risk mitigation. It also gives rise to new manufacturing ecosystems like more collaborative R&D, intelligent supply chains, a growing role for robotics, and enhanced asset performance through machine learning systems.
- Intelligent government is optimizing efficiency, management and service delivery to foster economic growth worth US$2.9 trillion by 2025. Intelligent Connectivity is changing the way governments deliver services and meet their mandates to citizens. By infusing AI with cloud, big data and the IoT, the flow of information from government to citizens can be transformed and improved while optimizing efficiency, management, and service delivery.
- Intelligent utilities are allocating resources more efficiently, with the industry forecast to reach US$0.5 trillion by 2025. Using data from smart sensors and predictive analytics infused with AI helps the electric power industry enhance demand and operations management to predict demand spikes and improve asset performance.
Today, the connectivity at the heart of the digital economy is getting a boost from Artificial Intelligence (AI), according to the Global Connectivity Index (GCI) 2018 report. The GCI notes that AI-powered Intelligent Connectivity is already enabling the rise of innovative new business models, products, processes and services that, in turn, could see the digital economy almost double in size to US$23 trillion from 2017 to 2025.
The GCI tracks the progress of the digital economy by monitoring the correlation of ICT infrastructure maturity and GDP growth. Policy makers responsible for planning digital transformation strategy find the GCI score is a benchmark with consequences for their country.
The addition of a single GCI point can translate into a 2.1% increase in competitiveness, 2.2% increase in innovation, and 2.3% increase in productivity for a nation’s economy – a testament to the strategic importance of investing in ICT infrastructure. ICT infrastructure investment also has a direct link to economic growth;
- A 20% increase in ICT investment can boost a nation’s GDP by 1%.
- The ROI in digital technologies is roughly 6.7 times the earnings taken from non-digital investments.
Moreover, strong digital infrastructure is necessary to develop the foundation for AI-powered Intelligent Connectivity.
However, there’s still a long way to go. Did you know that…?
- Only 10% of enterprises currently use Cloud
- Only 5% of enterprises are currently trialing AI solutions
Going forward, the focus of the GCI will be tracking this new cycle of economic growth in developed nations. It will continue providing actionable data and insights that policy makers in what we define as Adopters and Starter nations need to develop strategies to adopt AI and Intelligent Connectivity suited to their own level of development to achieve sustainable growth.
Undeniably, it is still early days for AI, but the technology is already widely seen as a gateway to a new economic growth cycle.
Stay tuned for more information on GCI insights and the upcoming GCI 2019.