This might sound like an empty cliché, but digitisation has created a global economy. A recent report by leading management consultancy firm and global business analyst McKinsey & Co highlights the remarkable effect on world trade flows (of goods, services and finance) that the digital boom has created. Moreover, it shows the wealth of new digital marketing opportunities that lies ahead.
The report finds that global trade flows in 2012 represented 36% of global GDP, 1.5 times the proportion in 1990, and over the next 10 years could triple, fuelled by the increased participation of emerging world economies and the increased prevalence of digital technologies. It’s also no coincidence that these two factors are inherently interlinked.
Knowledge is a tradable commodity and social technologies are predicted to form an economy of their own. Indeed, social media’s as yet untapped market is reason enough to get excited. But let’s first take a peek at the digitised world in numbers.
The digital world in a snapshot
The digital world grows exponentially. Nearly 40% of the world’s population were connected to the internet in 2012, and two-thirds had a mobile phone (making the business case for responsive design all the more pertinent). In the next five years, the number of wireless devices online worldwide will double, and over the next decade global internet traffic will be eight times its current level.
Emerging markets and emerging players
Digitally-enabled services accounted for nearly two-thirds of the world’s services industries last year.
Meanwhile the world’s digital marketplace is rapidly climbing the ranks in its global influence.
All this has had a considerable effect in mobilising emerging economies.
While developed economies are on the whole more digitally connected, the effect of digitisation in boosting trade flows from the emerging markets is not only remarkable, but set to grow substantially, opening up considerable digital marketing opportunities.
Digital technology has made physical trade more widely accessible and manageable to more countries and indeed companies, no matter how small. Factors such as the lower cost of access, lowered costs in transport and production, and the potential for almost limitless social reach and engagement has given the small players a chance to emerge and rise up against the big names. The potential for cross-border trade that is made possible by digitisation is enormous. Consider that 90% of commercial eBay sellers export to other countries, while just 25% of traditional small businesses export. This statistic, for example, reveals much about our changing online habits and how quickly that picture has evolved:
Social media’s untapped market
Notably, the report predicts an enormous untapped market that can be unlocked by social technologies. The report estimates a value of £774 billion across four industries – consumer packaged goods, consumer financial services, professional services, and advanced manufacturing.
McKinsey’s report gives us a snapshot of how digitisation has completely transformed the way in which we trade and behave on an international level, and has shifted the hierarchy of power in numerous commercial ways. Moreover we see a striking landscape of digital opportunity ahead, and the need to use social media and content marketing’s capabilities to their fullest is of paramount importance to stay ahead of the game.
Source: McKinsey Global Institute report – Global flows in a digital age: How trade, finance, people, and data connect the world economy – April 2014