While the most advanced sectors, companies, and individuals are pushing the boundaries of technology, the U.S. economy as a whole is only realizing 18 percent of its digital potential.
Digital capabilities, adoption, and usage are evolving at an extremely rapid pace. While most users struggle to keep pace with the relentless pace of innovation, sectors, companies and individuals at the digital frontier continue to push the boundaries of technology use and, as a result, reap disproportionate benefits.
The pronounced gap between the digital “haves” and the “have-nots” is a major factor shaping competition at all levels of the economy. Companies that lead the way win in the struggle for market share and profit growth; some change entire industries to their advantage. Workers with the most advanced digital skills are in such high demand that their salaries are well above the national average. Meanwhile, the opportunity cost for organizations and individuals who fall behind is rising.
Our new report from the McKinsey Global Institute (MGI), Digital America: A Tale of the Haves and Have-Nots, represents the first major attempt to measure the ongoing digitalization of the U.S. economy at the sector level. It introduces the MGI Industry Digitization Index, which combines dozens of indicators to provide a comprehensive picture of where and how companies are building digital assets, expanding their use of digital technologies, and creating a more digital workforce. In addition to the information and communications technology sector, media, financial services and professional services are growing rapidly, while others have significant growth potential.
The report also quantifies the significant gap between the most digitized sectors and the rest of the economy over time and finds that despite massive adoption, most sectors have barely closed the gap over the past decade. Lagging sectors are less than 15 percent more digitized than leading sectors (exhibit). In fact, because the less digitized sectors are among the largest in terms of contribution to GDP and employment, we found that the U.S. economy as a whole is only reaching 18 percent of its digital potential (defined as the upper bound of leading sectors’ utilization across various indicators).