NOVEMBER 2022CIOAPPLICATIONS.COM8IN MY Viewor more than a decade, the global economy has experienced an unprecedented transformation driven by the digital economy, also known as the fourth industrial revolution. During the first wave, this transformation impacted primarily the manufacturing sector and in its second wave, it encircled services and other less digital industries. Current estimates suggest that people spend $1 million per minute on online shopping while the digital economy accounts for around 16% of global GDP. In the U.S., this share is 10% and in the past 10 years, its contribution to real GDP growth is close to 40%. Under current trends, by 2050, the share of the digital economy in the U.S. could reach almost 20% and its contribution to real output could reach almost 70%. At the core of the digital economy lies the intersection between data, computing power and connectivity.Some estimates suggest that 90% of all the data in the world was created in the last 2 years. In fact, every day we generate 2.5 exabytes (18 zeros in one exabyte) of data, equivalent to listening to music nonstop for 285 million years. By 2025, there will be 200 zettabytes (21 zeros in one zettabyte) of data, implying far more stored bytes than observable stars in the universe or grains of sand in all of Earth's beaches. Although humans are generating most of the data, in a few more years this will be mostly created by machines.Data itself has little intrinsic value. However, once it is analyzed and used to make actionable decisions, it becomes an invaluable asset. The exponential growth of computing power is letting organizations to identify, store and manage massive and complex datasets. Already, around 50% of all corporate firm's data is stored in the cloud. Meanwhile, artificial intelligence (AI), which in broader terms implies giving computers the ability to emulate human intelligence, along with big data, machine learning (ML) and deep learning, is allowing organizations to develop algorithms and other tools that can learn and yield predictions to solve complex tasks and make objective decisions. In the past, only large organizations could benefit from AI and ML. However, the advent of third parties offering AI as a service (AIaaS) implies that small businesses can also benefit from these trends.Enriching AI and ML, delivering on-demand solutions, and expanding new technologies requires super-speed connectivity. The Cloud (computing services via the Internet) and the Internet of Things (IoT, interrelated devices over a network without human interaction) allow a real-time look at ongoing operations and automate processes, which can help track performance, build better strategies and improve the quality of life. For example, smart sensors allow cities to reduce congestion, saving thousands of man-hours, and conserve ADAPTING TO THE DIGITAL ERA: CHALLENGES AND OPPORTUNITIESFNATHANIEL KARP, CHIEF ECONOMIST, BBVA COMPASSNathaniel Karp
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