Digital leadership

What pathway between the two digital superpowers?

by Vincent BONNEAU

Digital tech has by no means escaped the overriding geopolitical trends, overshadowed by the US vs. China duel, at a time when globalisation was already slowing and now further accentuated by the Covid-19 crisis. On the sidelines of this battle, Europe and the other countries are looking for their area of specialisation as a way to stand out. Tensions are being exacerbated by the critical role that digital tech now plays throughout the economy and society.

Digital tech’s centre of gravity shifting towards the Pacific

Asia began steadily overtaking Europe as the world’s second largest digital market in 2014, and is now closing the gap with North America, which it is expected to overtake by 2025. China is of course one of the main powerhouses here, forecast to account for 50% of all global growth between now and 2023.

While Asia-Pacific naturally benefits from the sheer size of its population, other very populated but less developed regions (Africa, Latin America) will see less significant digital market growth, and in some cases only just above the global average. While APAC is steadily becoming the dominant region, it is also because of its tremendous capacity for innovation and for monetising for-pay services in consumer markets. Despite which North America remains by far number one in IT B2B segments, where Europe still holds second place.

Asia-Pacific number one in B2C markets, North America tops B2B

Regional breakdown of Digiworld markets by segment in 2023

Source : IDATE DigiWorld

Europe looking to forge its own niche outside the duel between China and the US

Chinese and American companies dominate virtually every digital sector, both leveraging a powerful domestic market to expand their international footprint. Americans are especially strong when it comes to content (except video games), with most OTT services financed by advertising, as well as IT, while Chinese companies lead the way in e-commerce and consumer electronics. Both countries also top the rankings in telecoms despite not having any strong international business as yet (outside B2B solutions).

China and the US are also home to the most of the world’s unicorns. With the exception of a few heavyweights (Nokia, Ericsson, Samsung, SAP, Sony…) and Europe’s IT and telecoms market challengers, top players in other countries often enjoy strong positions in their local markets, but are struggling to expand internationally.

Big Tech leaders mainly in the US and China

Top digital tech companies, by 2017 revenue

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Source : IDATE DigiWorld in "Digital Europe 2030"

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