In today’s world, information technologies have become the basis of the global economy, playing a key role in the development of various sectors. The internet economy is driving transformation, impacting businesses, governments and consumers.
AI “FAKT” investigated the use of information technologies in the modern economy and their prospects in the future on the basis of the following platforms: Statista, DOU, eMarketer, KPMG Pulse of Fintech and McKinsey.
The 21st century is marked by the globalization of the world economy, based on the computerization of almost all spheres of human activity. This allows us to speak today about the phenomenon of the so-called “new economy”, in which a critical mass of innovations has been accumulated and an information and innovation explosion has occurred.
Growth of the IT sector in the world
According to Statista, the global information technology market was valued at US$5.2 trillion in 2022 and is projected to reach US$6 trillion by 2024. The main growth drivers are the development of cloud technologies, artificial intelligence, Internet of Things (IoT) and cyber security.
Currently, more than 90% of enterprises in the world use cloud technologies in their operations, while the AI market is estimated at more than 300 billion US dollars. The number of connected devices is expected to reach 75 billion by 2025.
Development of IT in Ukraine
Ukraine’s IT sector continues to demonstrate steady growth despite difficult economic conditions. As of 2024, Ukraine has secured its position as an important player in the global IT market, which is confirmed by the following statistics and forecasts.
In 2024, the volume of exports of IT services from Ukraine is expected to reach 7 billion US dollars, which indicates a stable growth compared to previous years. More than 300,000 IT specialists are currently working in our country, which reflects the growing demand for qualified workers in this field. At the same time, the Ukrainian startup ecosystem is actively developing – in 2024, there will be more than 2,500 startups operating in Ukraine, many of which work in the field of financial technologies, health care, and agricultural technologies. In addition, the attraction of venture capital in Ukrainian startups in 2024 reached 1.2 billion US dollars, which emphasizes the interest of investors in innovative projects.
The impact of IT on various sectors of the economy
IT technologies transform not only traditional fields, but also create new markets and opportunities.
Financial technologies (Fintech)
Fintech companies are actively using IT to provide more efficient financial services. However, total investment in the fintech sector worldwide has now fallen to a six-year low of $113.7 billion across 4,547 deals, down from $196.6 billion across 7,515 deals in 2022. This temporary decline is due to a number of global conflicts, including the war in Ukraine and hostilities in the Middle East, as well as high interest rates, persistently high inflation in many countries and a lack of exit opportunities.
Despite the overall decline, investments in proptech (technology in the field of real estate) increased to a record level of $13.4 billion. This indicates a growing interest in innovation in the real estate sector.
The $2.3 billion investment in 2023 is the second highest ever. The positive dynamics of investments in ESG-fintech solutions have been supported by the decisions of both governments and businesses, which commit to zero emissions and implement various regulatory changes. It is expected that the positive dynamics will continue in 2024.
Overall, payments remained the strongest area of fintech investment in the world in 2023, with total investment at $20.7 billion, up from $58 billion in 2022. Funding for the insurtech (insurance technologies) ($8.1 billion), cryptocurrency and blockchain ($7.5 billion), regtech ($2.6 billion), and cyber security ($1.3 billion) sectors was also highlighted.
$12.1 billion of fintech investments will be AI-driven, with many financial institutions and fintechs adopting AI through alliances and product spending rather than direct investment.
Regional fintech investment trends
- The US dominates with $73.5 billion in investments.
- The total volume of investments in the region decreased from $95.4 billion to $78.3 billion.
- Brazil and Canada made notable contributions ($2.6 billion and $920 million).
- Market activity in the second half of the year was low.
Europe, Middle East and Asia (EMEA):
- Investments fell to a seven-year low of $24.5 billion.
- More than half of the funding went to the British company Finastra.
- The decrease is felt in India ($3 billion) and Singapore ($2.2 billion).
- Growth in China – $1.9 billion.
The fintech market of Ukraine includes 246 companies, 7 of which were founded in 2022. For example, such companies as Monobank and PrivatBank introduce innovative solutions for consumers.
Healthcare (HealthTech)
IT in the medical field contributes to the improvement of diagnosis, treatment and management of patient data. According to forecasts, the digital medicine market will grow to 500 billion USD by 2024. At the same time, the volume of the telemedicine market in 2024 reached 100 billion US dollars. Currently, there are more than 500,000 mobile health applications available on the market, and more than 95% of hospitals in developed countries use electronic medical records.
Agricultural technologies
In 2024, the use of information technologies in the agricultural sector has increased significantly, contributing to the increase in the efficiency and productivity of agriculture. In the agricultural sector, global positioning systems (GPS) and geographic information systems (GIS) are used, which allow farmers to accurately plan and control all agricultural activities.
Also used:
- drones for monitoring the condition of crops, identifying plant stress zones, analyzing plant health and detecting pests;
- sensors and sensors for monitoring soil moisture, temperature, air humidity and other parameters that help farmers optimize the use of water and fertilizers;
- smart automatic irrigation systems that are adjusted based on sensor data, reduce water consumption and improve yields;
- collection and analysis of large volumes of data on soils, crops, climate conditions and yields to help make informed decisions about agricultural management;
- forecasting models for determining optimal sowing, harvesting and plant protection times;
- artificial intelligence (AI) and machine learning (ML) – to analyze images from drones and satellites to detect plant diseases, determine the condition of crops and predict yields;
- robotics – to perform routine tasks such as weeding, harvesting and monitoring the condition of plants.
Electronic commerce
E-commerce continues to grow at an impressive pace. According to eMarketer, global e-commerce sales will reach $5.2 trillion in 2022 and are projected to exceed $7 trillion in 2024. In Ukraine, the e-commerce market is also showing dynamic growth, the main players are Rozetka, Prom.ua and Aliexpress.
The attractiveness of e-commerce is related to the following factors:
Convenience and accessibility. Online shopping allows consumers to shop from anywhere at any time. The lack of need for a physical presence in stores, especially during the pandemic, has greatly increased the popularity of e-commerce.
A wide selection of goods and services. Online stores offer a wider range of products than traditional retail stores. Consumers can easily compare prices and features of products, which increases their satisfaction with the purchase.
Competitive prices. Due to reduced operating costs, online retailers often offer products at lower prices than brick-and-mortar stores. This appeals to price-sensitive consumers.
Fast delivery and convenient logistics. Modern logistics systems ensure fast and reliable delivery of goods. Many companies offer same-day or next-day delivery services, which greatly increases customer satisfaction.
Personalization and recommender systems. The use of big data and machine learning algorithms allows online stores to personalize offers for each customer. This makes shopping more attractive and convenient for consumers.
Loyalty programs and bonuses. Online retailers often offer loyalty programs, discounts and bonuses that encourage repeat purchases and attract new customers.
Mobile commerce. The growing use of smartphones and mobile shopping apps has made e-commerce even more accessible. Mobile apps often provide a user-friendly interface and special offers for users.
Secure payment systems. Modern technologies ensure high security of online payments, which contributes to the growth of consumer confidence in electronic commerce.
Reviews and ratings. The ability to leave and read product and seller reviews provides consumers with additional information to help them make purchasing decisions. This increases transparency and trust in online stores. In addition, the integration of e-commerce with social networks allows you to more effectively attract customers through targeted advertising and referrals from friends.
The Internet has fundamentally changed many aspects of economic activity, creating new opportunities and transforming traditional business models. Currently, online education is actively developing, the platforms of which have more than 1 billion users. In general, the Edtech market is estimated to be worth $400 billion in 2024.
Online advertising and digital media are also growing rapidly. So, in 2023, global spending on Internet advertising will reach 600 billion US dollars.
In 2024, digital media and online media will continue to play a key role in the global economy, influencing various aspects of information consumption and marketing. The average Internet user spends 6 hours and 40 minutes on the Internet every day, which is an increase of 1% compared to last year. This is equivalent to 780 trillion minutes or almost 1.5 billion years of collective human existence in a year. Ukrainian and foreign users actively use digital media to consume various information and entertainment (Digital Media), almost all of them are on social networks every day. By the end of 2023, the number of Netflix subscribers reached 230 million people, and more than 1.5 billion hours of video are watched on YouTube.
The Internet economy also includes the tourism sector (Travel Tech). Over 80% of all hotel and ticket reservations are made online. The popularity of virtual tours increased by 350% during the pandemic and remains high in 2024.
The Internet economy has become the core of information technologies and the basis of their development, which has significantly influenced the modern way of doing business. At the same time, each new technology induces a chain reaction of innovations, which determines the continuous, rapid growth of the new world economy.
