The world is evolving at breakneck speed. People, businesses, devices, data, and processes are all interconnected, and this state of hyperconnectivity is not only transforming life as we know it but the global economy too.
By Byron Clatterbuck, CEO of Seacom
This ‘digital economy’ grows every day from billions of online connections and reimagines traditional thinking of how organisations are run, how goods and services are produced, and how we, as consumers, use them. Business success in this modern, digitalised economy comes down to adaptability: the new competitive advantage in an era of change.
Reimagining the global economy
The digital economy refers to, as the name implies, the economy and economic activities that rely on digital computing technologies. The value of the digital economy was approximately $11,5-trillion in 2019, or 15,5% of global GDP.
Even more notable, the World Economic Forum estimates that, of the new value that’s created in the global economy over the next decade, 70% will come from digitally enabled business. These figures alone should show business leaders why the digital economy is something that cannot be ignored.
Of course, stable infrastructure and Internet availability have been (and still are) critical for powering the digital economy. Cloud technology is another driving force behind the growth of the digital economy, and it has given many businesses worldwide the opportunity to compete in larger, more competitive markets. It’s allowed businesses to streamline their operations, improve productivity, explore new business models, and reduce unnecessary costs.
While this innovation is revolutionising many parts of the world, we cannot ignore that other parts don’t have access to the tools needed to participate in a digital economy. We must be mindful to prioritise infrastructure roll out so that all parts of our world, continent and country have the opportunity to benefit from the digital economy.
The future is evolving
Businesses that fail to account for the changes that the digital economy brings face declining revenues, or worse, closure. Brands like Blockbuster Video and Kodak serve as a warning to others about what could happen if they fail to innovate. But homegrown digital-first businesses like Sweepsouth, Bottles App and Easy Equities – to name a few – show how much is to be gained for smart businesses that can embrace change.
There’s a good reason why so many businesses that operate in the digital economy have been labelled ‘disruptors’. This new tech has made it possible for businesses to move into a digital space where things like opening hours, inventory storage, ownership of assets and hiring permanent staff are no longer a restriction. The only thing that’s certain about what kind of businesses we will see in the next 10 years is that they will certainly be just as disruptive as the ones emerging today.
Although new business models may be impossible to predict, there’s no doubt that customers will still expect personalised engagement and positive experiences. Whether you serve other businesses or consumers, your customers need to be able to ask questions, request information and communicate easily at the simple click of a button (or tap of a screen). Delayed responses are no longer acceptable, and these ‘always on’ expectations will only increase.
Forced acceleration
The importance of the digital economy and how businesses must consider it even if they don’t think it’s relevant to them has become clear over the last few months. People have been forced to change how they work, and businesses have had to facilitate this change. With a large portion of the workforce working from home, an almost overnight digital migration and remote working facilitation had to take place. While many businesses thrived, others couldn’t manage the change at first. But now, some businesses are looking to implement a hybrid model, avoiding full-time office work. Certain companies have even gone as far as to say that they’ll never go back to the office.
Organisations have also had to embrace the digital economy in other ways, pivoting to new online models, considering different digital offerings and embracing cloud-based software to help them ensure business continuity. With so many more businesses and consumers joining the digital economy in the last few months, considering how you can make it work for you is more important than ever.
Digital transformation providing opportunities in Africa
As the digital economy grows, there will be opportunities for organisations that are ready to take advantage of them. At a smaller scale, a small farm may be able to sell produce online and order new, innovative equipment. The farmer could connect with others in the industry and exchange information on a global platform. At a larger scale, a smart new business might disrupt the healthcare industry, allowing more people to obtain services at a lower cost.
Technology and information will become more easily accessible, allowing people to better themselves and improve their standard of living. This in turn benefits their communities as they begin to live more comfortable lifestyles. Education, digital jobs and further training will be available virtually, contributing to a growing economy.
This digital economy cannot truly thrive in Africa until we have developed stable, reliable infrastructure within the continent – as well as between the continent and the rest of the world – that can support world-class Internet connectivity. This will require not only more international subsea cables to handle increased traffic volumes, but also diversity from these cables. New cables should be built on different routing and land in different landing stations. This will ensure that Africa has a diverse, and therefore more resilient, international backbone for data traffic.
We also need more diversified and better protected terrestrial routes that connect key metropolitan centres, and more fibre within metros to connect homes and businesses. An interconnected world ultimately relies on physical data connectivity and, as such, we need to start driving the implementation of resilient data services, at affordable costs, to be able to connect with the rest of the world.
The journey to a flourishing digital economy starts with us.