Digital transformation, or digital transition, is that process of organisational, economic and social change that concerns the development and application of new technologies in Italy and worldwide. The latter are able to generate important cultural impacts, revolutionising markets and companies.
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Digital transformation: a fourth industrial revolution
Digital transformation can be framed as a fourth industrial revolution:
- the first (from 1750 to 1830), thanks to the invention of the steam engine, industrialised production in textiles and metallurgy;
- the second (1850 to 1914), thanks to the discovery of electricity, certain chemicals and the internal combustion engine, revolutionised the world of energy sources;
- the third (1970 to 2000), thanks to the birth of computer science, contributed to the spread of personal computers (PCs) and the subsequent automation of various processes.
Between 2011 and 2016, however, something changed again:
- from a production perspective, the use of integrated systems has made it possible to create production chains linking technological components directly to business software;
- from the social point of view, the Internet of Things (IoT), which is possible thanks to ultra-wide bandwidth and 5G, has made it possible to control everyday objects (cars, watches, household appliances, clothes, street lamps, etc.) via the smartphone;
- from a statistical point of view, big data has made possible increasingly up-to-date, sophisticated and powerful security systems and numerous smart business practices.
Digital transition in Europe and the world
The fourth industrial revolution is already bringing considerable benefits, especially in terms of productivity. Consulting firm McKinsey estimates that Europe alone could increase its GDP by 3.6 trillion euros by 2030, thanks precisely to digital transformation.
Much of the boom will be due to the development of conversational artificial intelligence, and many trends already underway; let us discover them together.
Digital transformation Italy: 2023 trends
A study conducted by Public First for AWS estimated that digital transformation is equivalent to a turnover of 251 billion euros in Italy, or 16% of the current value of the national economy.
Let’s now look in detail at which trends are confirmed with respect to 2022 and which are emerging on the Italian scene.
Cloud computing
Cloud technology allows access to computing resources (such as servers, storage and applications) via the Internet, without them having to be installed locally. Cloud computing offers advantages in terms of scalability, flexibility, security, savings and innovation.
According to research by Confindustria digitale, the cloud market in Italy was already worth 3 billion euros in 2020 and is expected to reach 6 billion euros by 2025, with an annual growth rate of 15%. The most popular solutions include public cloud (offered by external providers), private cloud (dedicated to a single customer) and hybrid cloud (combining both). The most active cloud sectors are finance, healthcare, public administration (PA) and manufacturing.
Europe is also aiming for the adoption of cloud services and hopes that more than 75% of European companies will adopt them by 2030. According to current figures, however, Italy will not reach this percentage before 2040.
Machine learning (ML) and artificial intelligence (AI)
Machine learning (ML) and artificial intelligence (AI) are two of the most advanced and promising technologies of the digital transformation. They consist in sophisticated algorithms that can process large amounts of data, learn autonomously and provide intelligent, customised solutions to complex problems. Moreover, ML and AI can be applied to various fields such as healthcare, industry 4.0, commerce, finance, security, education and entertainment.
According to research by Anitec-Assinform, the AI market in Italy will have an annual growth rate of 27% by 2030. Among the most popular applications, in addition to classic chatbots and virtual assistants, are advanced forms of AI, such as ChatGPT-4, with which one can interact in a simple and natural way, improving one’s operations. Other examples are facial and voice recognition systems, predictive analytics platforms, collaborative robots and autonomous vehicles.
e-Commerce
e-Commerce is the sale and purchase of products and services online. It is a channel that has expanded greatly in recent years, thanks mainly to the spread of smartphones, social media and virtual payment systems.
e-Commerce has also fostered the development of new business models, such as marketplaces (bringing supply and demand together) and subscription platforms (offering recurring services or products for a fee).
According to Osservatori.net, the e-commerce market in Italy is expected to reach 50 billion in 2025, compared to 31 billion in 2020. Among the most dynamic sectors are: food (+56% compared to 2020), clothing (+23%), furniture (+22%) and health (+21%). Emerging trends include social commerce (based on user interaction), voice e-Commerce (based on voice recognition) and omnichannel e-Commerce (integrating different physical and digital channels).
Internet of Things (IoT)
The Internet of Things (IoT is the acronym, an expression coined more than 20 years ago), is a technology that connects physical objects equipped with sensors, chips and network cards via the Internet. The IoT makes it possible to store large amounts of data in real time on the status and functioning of the objects themselves, to control them remotely and to make them interact with each other.
The IoT market in Italy is worth 6 billion euros, but will soon reach 12 billion euros; it is currently growing at around 15% per year. Examples of IoT solutions are wearable devices (such as smartwatches or fitness bracelets), home automation (which includes smart thermostats or light bulbs), industrial IoT (such as machinery or sensors for monitoring production processes) and smart cities (which include traffic lights or smart car parks).
It should be noted that IoT technology has grown a great deal in recent years, especially in the provision of services, which is why the NRRP allocates some 30 billion euros to the sector.
5G
5G is the fifth generation of mobile technology, which gives us the ability to transmit data at very high speeds (up to 10 Gbps), with low latency (up to 1 ms) and high capacity (up to one million devices per km2). Today, 5G represents a real revolution for wireless communication, which can finally benefit from new applications and services based on other digital technologies already mentioned such as AI, ML, IoT, augmented reality (AR) and virtual reality (VR).
Confindustria says that the 5G market in Italy could be worth 4 billion euros in 2025 and even double that in 2030. Annual growth is expected to be around 50%. The areas invested by 5G are: mobility (with autonomous vehicles connected to the network), industry (with intelligent robotized factories), healthcare (with m-health and e-health) and entertainment (with video games and multimedia content streamed).
How to make the most of the digital transition
During the pandemic period, most Italian companies realised that digital transition could represent a great opportunity. In this sense, 25% (i.e. 48 billion euros) of the 191.5 billion euros earmarked for Italy by the NRRP is earmarked for digital transition.
To get a slice of the pie, it is necessary to rely on the structural funds (and others) offered by our cluster.
Basically, if you too want to enjoy the full benefits of digital transformation and ride the trends of the moment with research and development projects, contact us by filling in the contact form below or call us directly. A team of experienced consultants will find the best solution for your needs and discuss the topics covered in this article with you.
Digital transformation is now, are you ready to be overwhelmed by innovation? JO Group: #borntoinnovate.