– Chris Demasi
Everywhere we turn today we see digital technology has exploded. From simple tasks in our daily lives to complex processes in the world’s largest companies, digitization has taken over and seemingly become the norm. But there is still so much more to come.
A report published last year by the Organisation for Economic Co-operation and Development (OECD) found that even though enterprises in wealthy countries were using information and communications technology much more now than they were a decade ago, the collective use of digital tools and activities was still quite low.
The blue bars in the chart below from the report show the average penetration of different digital technologies among enterprises in OECD between, typically, 2010 and 2018. Broadband internet usage is the only digital technology where usage is highly mature and has been for some time now. Yet while almost all large businesses in all rich countries use the Internet, high-speed broadband is still only being used by around 20% of enterprises.
Percentage of enterprises in OECD countries using selected ICT tool and activities (2010 to 2018)
Outside of standard broadband access, all other digital technologies remain less than 50% penetrated by enterprises notwithstanding some large jumps in usage over the past decade or so. Take cloud computing as an example. Companies like Microsoft, Amazon and Alphabet’s Google have revolutionized the cloud computing industry over this period and their cloud infrastructure, platform and application businesses continue to grow from 30% to 60% or more. This has enabled more big businesses in OECD countries to rely on cloud computing, increasing from 20% to 30% of enterprises between 2014 and 2018. That means that 70% of enterprises are yet to adopt the cloud in any meaningful way which represents significant growth potential for cloud technology providers like those mentioned above in the years and decades ahead
While digital might seem ubiquitous, there is still tremendous uptake to come. In the Montaka and Montgomery Global funds we are already invested in the winners in some of these industries. And we spend all day every day scouring the globe for more.
Chris Demasi is a Portfolio Manager with Montaka Global Investments.
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