A computer and a tablet.

Haves and have-mores in the digital economy

The digital age has profoundly changed day-to-day living and business practices alike. But, with digitization affecting the economy at all levels, some businesses could be left feeling like they missed the digitization boat.

A report by the McKinsey Global Institute, Digital America:  A Tale of the Haves and Have-mores, argues that businesses have barely scratched the surface of the digital era and that the US economy is only tapping into 18 percent of its digital potential. The report says that by expanding on areas like online talent platforms, data analytics and the Internet of Things, digitization could add up to $2.2 trillion to America’s annual GDP by 2025. However, the report also highlights that the gap between the “haves” and “have-mores” is widening as companies with advanced digital abilities are reaping disproportionate benefits.

The good news is that lagging businesses still have time to turn things around. The report outlines that companies need to identify their digital assets and use digital tools to reinvent every process. Policymakers need to create new training pathways for future jobs and skills, and governments should expand participation and digitize their own services.

The study does warn that digitization can pose challenges that could affect jobs, wages, inequality and security at the same time that the digital transformation of industries can make positive contributions to society and beyond.

This post first appeared in TINAN 71. Subscribe to TINAN for the latest economic development news and resources.