Digitizing so rapidly that users are scrambling to adapt

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The United States is digitizing so rapidly that most users are scrambling to adapt. The race to keep up withtechnology and put it to the most effective business use is producing digital “haves” and “have-mores”—andthe large, persistent gap between them is becoming a decisive factor in competition across the economy. Digitization is happening unevenly, and users with advanced digital capabilities are capturingdisproportionate benefits. The companies leading the charge are winning the battle for market share andprofit growth; some are reshaping entire industries to their own advantage. But many businesses arestruggling to evolve quickly enough. Workers in the most digitized industries enjoy wage growth that is twicethe national average, while the majority of US workers face stagnant incomes and uncertain prospects.

Digitization is not just about buying IT equipment and systems. The most explosive growth is now in usageas companies continue to integrate digital tools into an ever-widening variety of business processes. MGI’sIndustry Digitization Index is the first major effort to capture how this activity is playing out at the sectorlevel. It compiles dozens of indicators to provide a picture of digital assets, usage, and workers acrossthe economy. In addition to the information and communications technology (ICT) sector, media, financialservices, and professional services are surging ahead, while others have significant upside to capture. Infact, most sectors across the economy are less than 15 percent as digitized as the leading sectors. Despitea great rush of adoption, this gap has barely narrowed over the past decade. We see this pattern at thecompany level as well as the sector level. Digitization is changing the dynamics in many industries. New markets are proliferating, value chains arebreaking up, and profit pools are shifting. Businesses that rely too heavily on a single revenue stream or onplaying an intermediary role in a given market are particularly vulnerable.

In some markets, there is a winnertake-all effect. For companies, this is a wake-up call—and an opportunity to reinvent every process with afresh focus on the customer. As digitization accelerates, the United States has a major opportunity to boost productivity growth. Lookingat just three big areas of potential—online talent platforms, big data analytics, and the Internet of Things—we estimate that digitization could add up to $2.2 trillion to annual GDP by 2025, although the possibilitiesare much wider. Some of the sectors that are currently lagging could be poised for rapid growth.Companies in manufacturing, energy, and other heavy industries are investing in digitizing their extensivephysical assets, bringing us closer to the era of connected cars, smart buildings, and intelligent oil fields. But there will also be more economic dislocation. As digital technologies automate many of the tasksthat humans are paid to do, the day-to-day nature of work will change in a majority of occupations. Ascompanies redefine many roles and business processes, workers of all skill levels will be affected.

Historical job displacement rates could accelerate sharply over the next decade. The United States will need to adaptits institutions and training pathways to help workers acquire relevant skills and navigate this period oftransition and churn.Today the race is on to capture value from data analytics and the Internet of Things, btut there is no finish line.Digitization involves continuously experimenting and adapting, whether the focus is on back-office processes,the customer experience, or the introduction of new products and services. It takes investment, agility, andrelentless focus to stay ahead in this hypercompetitive new world, but there are outsized opportunities for theorganizations and individuals that can establish themselves as digital leaders. Examine the following issues:

What are the implications of digitalization for college Students in general?

What are the implications of digitalization for college Students at HBCUs?

What actions can college students type to prepare themselves for the future represented in this article?

Reference no: EM131486190

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