The importance of the digital economy

The digital economy is developing rapidly worldwide. It is the single most important driver of innovation, competitiveness and growth, and it holds huge potential for entrepreneurs and small and medium-sized enterprises (SMEs). Unfortunately, only two percent of European enterprises are currently taking full advantage of new digital opportunities. How businesses adopt digital technologies will be a key determinant of their future growth.

New digital trends such as cloud computing, mobile web services, smart grids, and social media, are radically changing the business landscape, reshaping the nature of work, the boundaries of enterprises and the responsibilities of business leaders.

These trends enable more than just technological innovation. They spur innovation in business models, business networking and the transfer of knowledge and access to international markets.

Two billion people are currently connected to the internet and by 2016, this number will exceed 3 billion – almost half of the world’s population.  Businesses that fail to get digitally connected will become excluded from the global market.

The huge potential of the digital economy is underexploited in Europe, with 41% of enterprises being non-digital, and only two percent taking full advantage of digital opportunities.

Just engaging with customers online seems to create growth: figures have shown that SMEs from many countries that have actively engaged with consumers on the internet have experienced sales growth rates that are up to 22 percentage points higher over three years than those companies in countries with low or no internet presence. By not taking full advantage of digital technologies, EU businesses miss out on the chance to expand and create jobs. It is estimated that if all EU countries mirrored the performance of the USA or the best-performing EU countries, 400,000 to 1.5 million new jobs could be created in the EU internet economy.

To read the full original article by the European Commission, please click here.

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