According to a recent report by Forrester, the digital economy is projected to reach US$16.5 trillion by 2028, accounting for 17% of the world’s economic output. The study, released on August 19, evaluates the expansion and scale of the digital economy, including tech spending, e-commerce in retail and travel, and more. It forecasts a compound annual growth rate (CAGR) of 6.9% from 2023 to 2028.
The United States and China are expected to dominate nearly two-thirds of this global digital economy. The primary engines of this growth will be the online retail and travel sectors, which are anticipated to grow at CAGRs of 9% and 7%, respectively.
Michael O’Grady, Forrester’s principal forecast analyst, referenced the World Economic Forum’s prediction that over two-thirds of new value creation in the coming decade might stem from digitally enabled platforms. He emphasized that countries aiming to boost their digital economies should prioritize digital businesses, public services, the availability of digital skills, and increased investment in research and development (R&D) as well as technology that impacts non-digital sectors.
In 2024, the United States is expected to command 42% of global technology spending, while China will lead the digital economy in e-commerce, with 39% of its retail sales taking place online—a figure that could rise to 41% by 2028. The report also highlighted that South Korea dedicates the largest portion of its economy to R&D, particularly in areas like artificial intelligence (AI), AI-related semiconductors, 5G and 6G technologies, the metaverse, and cybersecurity.
In contrast, Europe is facing challenges in digital investment. The European Commission has projected that the continent needs around $138 billion annually for tech growth between 2024 and 2027, but current estimates suggest the annual tech spend will only reach €83 billion.
The report identifies the United States, China, the United Kingdom, Japan, Germany, and South Korea as the six largest digital economies globally.
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