Study shows digital investments set to deliver highest return in Singapore

The global eco-digital economy to nearly double to $33t by 2028.

Investments in digital transformation are projected to yield the highest returns for organisations in Singapore over the next five years, according to a recent study by Capgemini Research Institute.

Capgemini's Eco-Digital Era report showed the estimated annual return on investment in digital transformation is expected to grow from 6% in 2023 to 17% by 2028 in the Lion City, higher than the global average return of 4% currently as well as the projected 14% yield in 2028.

Large scale investments on mainstream technologies like data analytics and cloud will likely deliver the most value as it can unlock new revenue streams, drive cost efficiencies and ramp up green efforts, according to the think tank. 

Digital technologies already helped organisations in the city-state to reduce their energy consumption by 27% in the last five years, and a 22% cut in greenhouse gas emissions during the same period.

Majority or 78% of organisations surveyed in Singapore believe that the world is transitioning towards a digital and sustainable economy, with nearly half of respondents already creating dedicated software teams to reach their digitisation goals.

The report estimated Singapore’s eco-digital economy, a mix of digital advancements and sustainability, accounts for 0.6% of its domestic GDP.

Globally, it forecasted the eco-digital economy to post a compound annual growth rate of 15% over the next five years, growing from US$16.6t in 2023 to $33t by 2028.

“The eco-digital economy is unlike anything that has come before it, and society has harnessed only a fraction of the overarching potential that mainstream technologies such as cloud, AI, and automation hold,” said Fernando Alvarez, chief strategy and development officer at Capgemini. “Organizations will need to leverage focused efficiencies in their core business, enabled by digital, in order to free up investment to support their dual transition.”

The survey polled 1,500 senior executives, 1,350 large organisations and 150 startups across Asia Pacific, North America and Europe, with Singapore-based respondents accounting for 5% of the total.