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New study offers detailed insight into structure of the digital economy

Digitalisation is a force that is significantly changing our economy. We are increasingly dependent on online services. The infrastructure of networks, data centers and cloud providers that enables these services plays a crucial role but is largely hidden from view. There is insufficient knowledge about how this digital infrastructure is built and what its significance is for the economy and society.

The interdependence of data, networks, data centers, cloud providers and the digital services they make possible is described in detail for the first time in the report ‘The Foundations of our Digital Economy’. The report is the result of a collaboration between the industry associations Dutch Hosting Provider Association (DHPA), Dutch Datacenter Association (DDA), ISPConnect and market research and consulting firm the METISfiles.

Digital dependencies
Ruud Alaerds, managing director of the DHPA: “The growing interest in the make-up of the digital economy is directly proportional to our increasing dependency on digital services. As industry associations, we observe a growing demand for a digital economy taxonomy. Which digital infrastructure elements, for example, are required to stream video or deliver cloud based accounting software? This report presents a comprehensive overview of all elements that are part of the digital infrastructure and the digital services that are delivered through it. We’ve composed a new model that visualises the digital economy structure.

Composition of the digital economy
The report and the model that it presents has been specifically designed to provide detailed insight into the interdependence of digital infrastructure, providers of digital services and businesses and consumers. Stijn Grove, managing director of the DDA, explains: “The new value chain of digital infrastructure (connectivity, data centers, hosting and cloud providers), digital service providers and digital consumption (the totality of the digital economy) is an increasingly important part of the economy. Every organisation, whether it’s a bank or a department store, has in effect partially become an IT company. Organisations invest less in on premise IT and shift their IT-expenditures towards hosting- and cloud services in data centers.”

A quarter of the Gross Domestic Product
The Netherlands is one of the largest data hubs in the world. As a result, foreign investment in IT-related projects, especially data centers, has grown substantially the past decade. The contribution of the digital economy to GDP in the Netherlands is currently estimated at 25% and rapidly growing.

In order for the Netherlands to remain successful, a few hurdles have to be crossed. Currently a new administration is being formed, and regardless of its composition it should fully support the continuous growth of the digital economy through investment and favorable policies.. Simon Besteman, CEO of industry association ISPConnect: “This report is part of our ongoing effort to inform all stakeholders, including policy makers. Considering the fast pace of digitisation we will release regular updates.”

A free copy of the report is available through this link.

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