Harnessing the fourth Industrial Revolution

THE digital economy is bigger than you think. Much bigger. Some call it the Second Machine Age. The Germans refer to it as Industry 4.0. In Davos, the World Economic Forum has crowned it the 4th Industrial Revolution. No one is playing down the future impact of digital, but there is a danger that many are underestimating its prevalence today.

New research from Accenture Strategy released in Davos this week reveals that the digital economy represents one third of the US economy. That is equivalent to US$5.9 trillion. The proportion is similar in the UK and Australia, but falls to about one quarter in France and Germany. In China, the digital economy represents less than 15 per cent of its current GDP.

Such fresh data matter. Too many businesses and organisations assume that digital is something that will happen to them. They expect technology-driven startups to disrupt their traditional business models and threaten their competitive position. While that may be true, the breadth of digital assets and skills means that incumbent organisations may have a greater digital base to build on. It tells us they can be more aggressive and proactive in disrupting markets themselves.