Digitization is evolving at a rapid pace for the U.S. economy. The implications for companies, governments, and individuals are enormous. Those who are already successfully riding the wave are achieving faster growth in revenue, productivity, and profit margins. Those who opt out risk being swept away.

1. “Haves”and
“Have
Mores”
THE ACCELERATING DIGITIZATION OF THE US ECONOMY
MCKINSEY GLOBAL INSTITUTE
February 2016

2. Digitization now touches every aspect of the economy
PERCENT OF US ECONOMY IMPACTED
BY DIGITIZATION:
98%10%
ICT* as a share of
GDP, taking into
account price effects
5%
ICT* as a share of GDP in
official statistics
Retail via e-commerce
Investment in ICT as a share of
total investment
Payments made digitally
Freelancers who have done work online
Adults with smartphones
Households with broadband
Adults who use social media
Taxes that are e-filed
Adults who use the Internet
Millennials who regularly use e-mail
Americans with access to high-speed
wireless Internet
Households subscribing to online video
streaming services
Americans who get news from
online aggregators
THE ACCELERATING DIGITIZATION OF THE US ECONOMY 01
Up to 98% of the economy:
98%
90%
87%
85%
74%
73%
64%
51%
42%
36%
28%
17%
13%
*Information and communications technology

3. By 2025, digitization could contribute up to $2 trillion to annual US GDP*
THE ACCELERATING DIGITIZATION OF THE US ECONOMY 06
Total $2.2
Multifactor productivity
Capital productivity
Labor productivity
Low estimate
High estimate~0.5
~0.8
1.6
~1.3
0.3 0.4
Trillion
*This sizing is not comprehensive and reflects only certain applications of big data, the Internet of Things,
and online talent platforms. The potential for technology-fueled growth is much wider.

4. Those on the digital frontier already do more, better, faster
Faster revenue
growth
Faster productivity
growth
2-3X faster profit
margin growth
THE ACCELERATING DIGITIZATION OF THE US ECONOMY 04

5. THE ACCELERATING DIGITIZATION OF THE US ECONOMY 02
Some industries are more digitized than others
ICT sector
Finance and insurance
Wholesale trade
Oil and gas
Advanced manufacturing
Government
Personal and local services
Retail trade
Education
Transportation and warehousing
Basic goods manufacturing
Health care
Construction
Hospitality
Selected sectors Overall digitization Assets GDP share
Relatively
low digitization
Denotes leading digitized firms within relatively
un-digitized sectors
Relatively
high digitization
Employment
share
Productivity growth
2005-2014 CAGRUsage Labor
INDUSTRY DIGITIZATION INDEX
5%
8%
5%
2%
3%
16%
6%
5%
2%
3%
5%
10%
3%
4%
High level results from a sample of sectors out of 22 analyzed (November 2015)
Digitization by area
3%
4%
4%
0.1%
2%
15%
11%
11%
2%
3%
5%
13%
5%
8%
4.6%
1.6%
0.2%
2.9%
2.6%
0.2%
0.5%
-1.1%
-0.5%
1.4%
1.2%
-0.1%
-1.4%
-0.9%

6. Overall level of digitization
More digitization over time . . . and the digital leaders are
maintaining an enormous lead over everyone else.
THE ACCELERATING DIGITIZATION OF THE US ECONOMY 03
Overall
Most digitized sectors
Rest of US economy
1997 2005 2013
1x
baseline
1.7x
increase in
leading sectors
4.1x
increase in
leading sectors
8%
12%
14%

7. Automation could accelerate the displacement of middle-skill jobs
to nearly twice the rate of recent decades
THE ACCELERATING DIGITIZATION OF THE US ECONOMY 07
Up to 45% of tasks
could be automated
Up to 30% of tasks in
60% of jobs could be
automated
Millions of middle-skill jobs displaced
1960s 1970s 1980s 1990s 2000s 2007-15 2015-25
US MIDDLE-SKILL JOBS DISPLACED DUE TO
TECHNOLOGICAL CHANGE
2 3 5 5 6 6 12
5%
7%
4%
6%
9%
8%
10%
13%
15%
Low Estimate
Medium Estimate
High Estimate

8. Implications
THE ACCELERATING DIGITIZATION OF THE US ECONOMY 08
Companies
Opt out at your peril
Know where the digital frontier
is–and realize that it's not waiting
for you
Just having IT is not enough–you
need the "must-have" digital
capabilities
Beware competitors
from everywhere
Embrace and enable digital
Ease the transition
Don’t kill the goose, but solve
for the issues together with
technologists
Adapt and learn
Governments Individuals
It's a great time to be a
consumer and a user
Embrace the evolution of your
“job”
Build digital savvy

9. MCKINSEY GLOBAL INSTITUTE
Find this report and other MGI research at:
www.mckinsey.com/mgi
MCKINSEY GLOBAL INSTITUTE
@McKinsey_MGI