In 2024, the world’s digital economies constituted about 15 percent of global GDP in nominal terms, and there are rising elements of emerging digital economies in almost every nation, according to the International Data Center Authority’s Global Digital Economy Report 2025. With data being the most expensive commodity in the world, the capability to process and transact data becomes vital to the prosperity of nations. This is an era where GPUs (Graphics Processing Units) or HPCs (High Performance Computing) have the potential to be used alternatively with GDP as a measurable economic indicator. The digital economy represents all economic activities reliant on or significantly enhanced by digital technologies, including digital infrastructure, digital services and data. In essence, a digital economy uses technology to create, deliver and transact goods and services. With its importance to our modern lives, the global digital economy stands on five pillars that define its existence, growth and sustainability. 

The Five Pillars of the Digital Economy

Pillar 1: Strategy

Strategy is the foremost fundamental pillar of building digital economies. Without an overarching strategy defining the digital economy goals and objectives, the journey will be random and insecure for all stakeholders. The U.S., as the world’s largest digital economy, has reached its status due to the sheer size of its technology and investment base. However, to date, the nation lacks a strategic plan at the macro level to harness the key targets and decipher measurable milestones for building and operating a sustainable digital economy. This is while smaller nations are becoming fierce competitors by not only learning from the lessons learned by the world’s leading nations, namely the U.S., but also planning for shortcuts and strategizing to optimize results. Like any other form of economy, digital economies can also be vulnerable and face potent catastrophes if they are not well-planned and clearly understood. All world nations need a coherent, comprehensive digital economy strategy that will maintain their consistent growth over the long term. 

There have been attempts to put forward such plans throughout the most recent administrations. However, all these plans partially tackled the grander scheme of the digital economy and merely focused on transforming the business functions of the government. Barack Obama Administration tried to codify this culture by enabling the nation’s first national CIO, who developed a Cloud First strategy that continues to be followed to some extent throughout U.S. government agencies today. Donald Trump’s first administration unleashed the Cloud Smart strategy in an amplifying continuation. Due to the predicted shortages of energy and liquidity, the current administration started its international economic campaigns by visiting energy and cash-rich nations of the Middle East to secure investments with a key focus on A.I. and digital infrastructure. However, all of these are responsive measures and not proactive by any stretch of the imagination. Most days in the tenures of any administration are spent on familiar geopolitical and domestic concerns, and there appears to be no national call for creating a robust digital economy model for the world, similar to the 1960s call for landing people on the moon. 

Meanwhile, the world’s second-largest economic power, China, is clearly focusing on A.I. development given the recent appearance of the DeepSeek generative A.I. platform, and unmistakable activity in building out its data center infrastructure and the electricity to power it. Though not transparent in their thinking, China’s leaders seem determined to continue the country’s superpower status. Similarly, Saudi Arabia is emerging as a noted leader in this area, with its Vision 2030, which focuses on A.I., smart cities, increased cloud services and e-government services. In parallel, a recent announcement of a sprawling A.I. campus that would consume several gigawatts of power in the United Arab Emirates is a clear indicator of the UAE’s vision for this sector as well. In India, Narendra Modi’s Administration, recently reelected for a third term, remains focused on turning what is now the world’s most populous country into a developed nation by 2047. India has accomplished a heavy economic lift in recent decades, and its people seem determined to keep this momentum alive. 

Pillar 2: Policy

Subsequent to strategy, policy is paramount to the success of digital economies. Even the best strategies would be infertile if they were not accompanied by effective policies that mandate change and maintain order. In the absence of effective policies, even if there are short-term gains in sight, long-term credentials remain volatile. Government policy functions as a reach of a nation’s executive arm to encourage the development of digital economies and the legal framework to do so. In this context, the role of policy is to legalize the phase-by-phase deployment of the overarching national digital economy strategies and render a predictable business and investment environment that fosters stability and growth. 

Many pieces of recent legislation around the world focus on what not to do. For example, the EU Digital Services Act (DSA) focuses on illegal content, A.I. platform accountability and individual user rights. The companion Digital Markets Act (DMA) seeks to regulate fair-minded competition. The more recent EU A.I. Act follows these precedents. Similarly, laws in the United States, such as the E-Sign Act, Children’s Online Privacy Protection Act and California Consumer Privacy Act, focus on legal issues and regulatory control. India, Singapore, Australia, Nigeria, and others have similar new regulations. 

But where is the legislation for upgraded “interstate highway” networks, massive A.I. center development and government support of modern software development? While we are busy being proud of our immense global edge, other nations are bringing their bright minds to set the right policies that make digital economy sense, given their nations’ natural strengths and vulnerabilities. For instance, Brazil’s President Luiz Inácio Lula da Silva recently announced lifting all taxes related to data centers in hopes of attracting $2T of digital infrastructure investments to the country. As technology evolves, policies must change. Without the right policies, the world’s greatest economies will suffer the gravest impacts. The first policy required for any nation, state or organization is to make sure all policies are regularly revisited and revised. 

Pillar 3: Energy

With the exponential rate of A.I. growth, the demand for building massive data centers has never been greater. These data centers need energy to fuel their processing capabilities and fulfill their function. Currently projected to need at least 300 gigawatts of energy for data centers by 2023, the world is under pressure to meet this demand, and the attention on the global scarcity of energy is unlike any other time in the history of humankind. This is another area of concern to the United States, which has already seen electricity shortages in its most highly developed data center hubs. Loudoun County, VA, famously has the world’s largest concentration of data centers and has been combating this shortage to meet its data center market demand over the past several months. Concerns over the consumption of electricity by data centers have also been raised in Singapore, South Korea, the UK, Ireland, the Netherlands and many developing nations that have underdeveloped, struggling electricity grids. Seemingly, sustainability has been front and center in any discussions of energy and has now been built out to deliver 30 percent of the world’s electricity. Though not renewable, nuclear energy is sustainable and was given a new life with its endorsement at the United Nations’ COP28 summit in December 2023 in Baku, Azerbaijan. Encouraging the development of sustainable energy weighs heavily in determining the best performers in the IDCA’s Global Digital Readiness of Nations ranking. The United States is not a leader in this area, even as significant amounts of solar and wind energy continue to be developed, and large amounts of hydropower are imported from Canada. 

Pillar 4: Human Capital

Educating and empowering the necessary human capital is critical to developing and growing global digital economies. Possessing a skilled and capable workforce is a key success factor for any nation on the digital economy front. The IDCA’s Global Digital Economy Report 2025 found a need for slightly more than 100 million new IT-related jobs throughout the world by 2030 if the global workforce is going to keep pace with the massive buildout of A.I. data centers. China and India both face serious demands for new tech job creation, but the rest of the developing world sees a need for at least 25 million of these jobs. To combat this challenge, effective and tactical professional training (such as certified training programs) plays a vital role here. Even the world’s highly developed nations face daunting tasks of retraining and upskilling existing tech workforces to meet the demands of today and the near-term future. This makes it incumbent upon nations to plan carefully and effectively for their human capital and ensure that human resource shortages are overcome with speed and care so that their digital economies do not tremble. 

Pillar 5: Digital Infrastructure

The digital economy is just a term without the data centers, as the data factories that process and turn a nation’s modern economic wheel. Digital infrastructure density actually varies by magnitudes throughout the developed world, even as many nations are concerned about provisioning new infrastructure. This disparity is magnified by at least 1,000 times in the developing world, much of which is utterly lacking in the digital infrastructure required to bring life to strategies and policies. The underlying digital infrastructure and data center “footprint,” as it’s called in the data center industry, sets the foundation for any nation’s digital economy. The United States currently has more than 40 percent of the entire world’s footprint, but must modernize many of its existing facilities and think on a grand scale if it wishes to establish and maintain leadership with A.I.. Numerous highly ambitious plans have been announced for the U.S. this year, including the $500 billion StarGate plan. But it behooves the U.S. leadership to think of a more organized, thought-out plan to develop on this scale and to work with the business leaders who plan to make it happen. With the ever-expanding densities, devising and building the right set of digital infrastructure gear is key to ensuring that the needs of the new A.I. workloads are met. 

It is perceived that the most significant projects can remain the province of the world’s largest nations. However, in a world where nations need to share knowledge and resources, the development of digital economies does not have to be a winner-takes-all competition. If some measure of coordinated strategy and collaborative policy can be worked out, the entire world will benefit. The U.S., still the world’s largest economy by a significant amount, can lead the way in continuing to develop its digital economy and setting examples to be followed. The world’s other major economic powers can do the same, including China, India, the largest EU nations, the U.K., Japan, South Korea, Saudi Arabia and Brazil. Smaller nations such as Switzerland, Singapore and Malaysia can continue to attract business and credible momentum. 

Beyond the world’s largest nations, several others leap out with promising prospects for rapid development in A.I. and digital infrastructure to boost their digital economies. However, it is in every nation’s interest, including that of the United States, to address their concerns successfully through global collaboration and resource-sharing. Accomplishing real digital economy progress requires thoughtful commitment. To harvest the rewards of digital economies, it is absolutely essential for all nations to become inclusive and agile. At the core of this inclusive agility, the five digital economy pillars of strategy, policy, energy, human capital and digital infrastructure must work together and in an integrated fashion to render digital services and economic outputs. 

Mehdi Paryavi is the Chairman and CEO of the International Data Center Authority (IDCA), the world’s leading Digital Economy think tank and prime consortium of policymakers, investors, and developers in AI, data centers, and cloud.