Digital

Daily Review: Measuring the Evolving Digital Economy to Find Value in Unexpected Places

MEDICIGlobal Head of Content

The past few weeks have been rich on outstandingly insightful data. Out of the endless content published every single day, there are two gems I’d like to emphasize today:

  1. UNCTAD data on the state of digital economy and quantitative predictions on its trends, and
  2. A beautifully deep research, ranking 55 countries by 40 parameters to provide gig economy entrepreneurs with an answer to an expansion dilemma.

Information Economy Report 2017 – Measuring the evolving digital economy

By the United Nations Conference on Trade and Development (UNCTAD)

“These are still the early days of the digital economy. But already it is clear that it has had, and will continue to have, globally transformative impacts on the way we live, work and develop our economies.”

  • Since increased reliance on digital technologies, such as cloud computing, three-dimensional printing, big data and IoT is certain to influence most industries and global value chains. It is essential to start assessing opportunities and pitfalls alike, and to prepare for what is coming.
  • In 2014, credit and debit cards accounted for more than half of all e-commerce payments in value terms. However, their share is expected to drop to 46% by 2019, as e-wallets and other alternative payment methods (such as mobile money) gain in importance.
  • The digital economy is expanding in several ways. Global production of ICT goods and services now amounts to an estimated 6.5% of global gross domestic product (GDP), and some 100 million people are employed in the ICT services sector alone. Exports of ICT services grew by 40% between 2010 and 2015.
  • Worldwide e-commerce sales in 2015 reached $25.3 trillion, 90% of which were in the form of B2B e-commerce and 10% in the form of B2C sales. Cross-border B2C e-commerce was worth about $189 billion in 2015 (7% of total B2C e-commerce).
  • Sales of robots are at the highest level ever, worldwide shipments of 3D printers more than doubled in 2016, to over 450,000, and are expected to reach 6.7 million in 2020.
  • By 2019, the volume of global Internet traffic is expected to increase 66 times from what it was in 2005.

Read the full report here.

The 2018 Marketplace Expansion Index – Finding value in unexpected places

By Hyperwallet

The 2018 Marketplace Expansion Index by Hyperwallet is one of the most fantastic studies I have seen so far. It was developed to assist digital marketplace platforms operating in the collaborative, gig, and sharing economies to gauge the expansion readiness of 36 countries. Hyperwallet researchers began their analysis by conducting a series of informal interviews with a diverse collection of two-sided marketplaces in order to understand how they identify potential expansion markets. These insights went on to inform macro-level data analysis, which included metrics like population size and internet penetration of 209 countries. A thorough analysis of this data allowed Hyperwallet analysts to narrow the field to 55 countries of preliminary interest. A further review of this information helped to identify a set of four key expansion readiness indicators: Infrastructure, Workforce, E-commerce Activity, and Foreign Competition. Data was split into 10 sub-parameters within each of the four sectors:

Measuring the Evolving Digital Economy to Find Value in Unexpected Places

Source: The 2018 Marketplace Expansion Index

Established countries – the USA, Netherlands, Germany, Australia, Singapore, Canada, South Korea, India, China, Austria, UK, and Denmark – boast sizable retail e-commerce markets (larger than $50 billion annually).

Measuring the Evolving Digital Economy to Find Value in Unexpected Places

Final Scores. Source: The 2018 Marketplace Expansion Index

  • When it comes to growth potential, marketplaces should keep their eyes on China and India: e-commerce growth in both countries is substantial, with China recording the highest level of e-commerce as a percentage of all retail sales. The size of the market is a good proxy for the prevalence/acceptance of gig economy platforms. Reasons for this include a robust market size, a steady and consistent growth rate, high adoption of information and mobile technologies, and an impressive tech infrastructure. These things, when combined with the country’s robust logistical networks, make it easy for two-sided marketplaces to bring their business to scale in China.
  • South Korea offers ample support for true collaborative business models that promote the sharing of assets, whereas capitalistic platforms face strict taxation.
  • In Australia, opening a local bank account as a marketplace is a complex process; a local entity is required, and rules can be strict when it comes to paying out to freelancers. Finding a licensed partner – someone with deep experience in the payments space – is often the best solution for marketplaces that are looking to hit the ground running.
  • Singapore leads Southeast Asia in smartphone penetration (>100%) and mobile broadband subscriptions (140%).

Download the full report here.

Note: The featured image for this article was sourced from the UNCTAD report.

Elena Mesropyan

MEDICIGlobal Head of Content

Global Head of Content, MEDICI

Elena is a research professional with a background in social sciences and extensive experience in consumer behavior studies and marketing analytics. She is passionate about technologies enabling financial inclusion for underprivileged and vulnerable groups of the population around the world.