The Eco-Digital Economy Sprouts, But Will It Bloom?
- By CDOTrends editors
- January 29, 2024
As the world grapples with sustainability and technological advancement, a new horizon emerges in the form of the eco-digital economy. This growing field combines environmental consciousness with digital innovation and is poised to redefine the landscape of business and society.
At the heart of this transition is the realization that while organizations are increasingly adopting digital solutions, they have only tapped into approximately 25% of their potential. This untapped reservoir of opportunity could lead to an eco-digital economy worth an estimated $33 trillion by 2028, a staggering increase from current levels.
A recent report by the Capgemini Research Institute, in collaboration with the Digital Value Lab at the Digital Data and Design Institute at Harvard, sheds light on this phenomenon. The findings reveal that digital technologies have significantly impacted energy consumption by nearly a quarter and slashed greenhouse gas (GHG) emissions by 21% over the past five years. These figures underscore the pivotal role of digital solutions in driving economic growth and fostering environmental and social responsibility.
The shift towards this eco-digital era is marked by collaborative and platform-driven approaches, ushering in innovative business models, new revenue streams, and enhanced cost efficiencies. Data utilization, cloud technology, and connected products and services are at the forefront of this transformation. According to the report, 70% of organizations believe that digitally driven business models will be a significant revenue contributor in the coming years, with 60% expecting these models to outperform traditional ones.
Dr. Suraj Srinivasan, Philip J. Stomberg Professor of Business Administration at Harvard Business School and head of the Digital Value Lab, emphasizes the importance of this transition. “This shift is truly fundamental, cross-sectoral and global in nature. One of the biggest questions that organizations have to address and manage, as they scale, is knowing what to centralize and what to decentralize in terms of platform architecture, and most importantly, data governance,” he states.
Investments in digital transformation are expected to yield significant returns, increasing from 4% to 14% by 2028. While the allure of emerging technologies like generative AI and edge computing is solid, mainstream technologies such as data analytics and cloud computing are predicted to offer the most substantial benefits in the next five years.
Fernando Alvarez, chief strategy and development officer at Capgemini, highlights the unique nature of the eco-digital economy. “Society has harnessed only a fraction of the overarching potential that mainstream technologies such as cloud, AI, and automation hold,” he remarks. “We are at the dawn of a new transformative era, and we have only scratched the surface of how digital technologies can help expedite the delivery of substantial economic, environmental, and societal benefits.”
As the eco-digital era gains momentum, the workforce must also evolve. With 64% of organizations investing in reskilling their employees, the global workforce is on the brink of a significant shift toward digital initiatives. This transformative journey promises economic prosperity and a sustainable future, blending technological advancement with environmental stewardship in a world increasingly defined by digital innovation.
Image credit: iStockphoto/amenic181