How can digital transformation support economic growth? The digital transformation brings positive effects on companies at the operational and productivity levels. There are numerous studies that show its effects in reducing costs and increasing profits. But when having a deeper reflection, the question "how does the digital transformation impact the real economy?" arises inevitably. Let’s take a close look at the topic and try to figure it out.
The new business opportunities that arise from the transformation have a clear impact on entrepreneurship and employment. In addition, they improve the way citizens interact with the government and improve the provision of public services such as education and health. In the long term, these improvements will also facilitate communication and social inclusion.
However, the quantifiable effects at the aggregate level are perceived more slowly than at the company level and are more difficult to calculate, since they cover the processes that are still in development. However, Microsoft and IDC conducted a study in 2018 on the specific impact of digital transformation in the manufacturing sector on the GDP of Asia Pacific ("Unlocking the Economic Impact of Digital Transformation in Asia Pacific"), in which they interviewed 1,560 leaders of the manufacturing industry in 15 countries in the area.
The study concluded that if the manufacturing sector were to adopt digital transformation as a development strategy, it would manage to grow an extra 1% each year. For this, the sector should consider the use of data as an asset and invest in big data, artificial intelligence, cognitive technologies, robotics and IoT solutions.
Although the study is aimed at the manufacturing sector, it is plausible to think that if we consider all the productive sectors, the impact of the digital transformation on the economy and on GDP could be greater, especially in the Middle East, where countries are in the preliminary stages of the digitization of their economies.
Thus, countries that promote the development of a work agenda that encourages innovation and digital transformation in the public and private sectors will be able to achieve a productive effect that will be seen in the health industry and will potentially lead to the growth of the country.
The digital transformation will ultimately encourage economic diversification, as in the case of Qatar. Apart from increasing its natural gas production, which will ensure continued control over the gas market globally, the country is also continuing its so-called efforts to diversify Qatar's economy.
For your information, Qatar is considered one of the best models of economy, and thanks to the implementation of the Qatar National Vision 2030, which seeks to strike a balance between an oil-based economy and a more knowledge-based economy, digital transformation is finding its role. With this transformation, Qatar can emphasize the importance of an economy characterized by diversity and reducing its dependence on hydrocarbon activities, as well as highlight the increasingly important role of the private sector and maintaining its competitiveness.
Guest Written article
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