Digital economy seen surging to USD $28 trillion by 2026

The Digital Cooperation Organisation has forecast that the global digital economy will expand by 9.5% in 2026, almost three times faster than the wider world economy, as artificial intelligence, cybersecurity and converging technologies reshape growth and policy priorities.

The projection comes in the group's new Digital Economy Trends 2026 report, which estimates the digital economy will reach USD $28 trillion next year. That would represent about 22% of global GDP, underlining the growing weight of digital activity in trade, investment and employment.

The study draws on survey responses from more than 400 policymakers, economists and technology leaders across 26 countries. It identifies 18 trends that respondents expect will affect industries, societies and governments over the next five years.

DCO Secretary-General Deemah AlYahya said the pace of change will test how widely the benefits of digitalisation are shared.

"The digital economy is reshaping our world with unprecedented speed, and the true test of this new era will be whether its benefits reach everyone. The next wave of AI-driven innovation will only be as inclusive as the foundations we build today. With the Digital Economy Trends 2026 report, we call on the global community to act decisively-so that technology becomes not a divider, but a bridge to opportunity, resilience, and shared prosperity for all. The future of the digital economy will be defined not by the speed of innovation, but by how inclusively it is built. This report is a call to strengthen the foundations that make AI accessible, safe, and empowering for all and to act together before the gap becomes irreversible," said AlYahya.

The report was launched at the Development Finance Conference "MOMENTUM", which focuses on investment priorities and policy responses in emerging markets.

Cyber focus

Respondents identified strengthening end-to-end cybersecurity as the single most important trend for 2026 in terms of positive socio-economic impact. They linked this to a rise in sophisticated cyberattacks, widening security skill gaps, and new risks associated with generative AI and future quantum technologies.

The report states that investment in more resilient digital infrastructure and security frameworks could unlock an estimated USD $3.13 trillion in economic value. That figure reflects both direct spending and the protection of existing and future digital activity.

The emphasis on cyber-resilience coincides with a continuing shift of services, manufacturing and public administration onto digital platforms. It also comes as governments debate regulation of AI and encryption, and as companies reassess their exposure to operational disruption and data theft.

Ambient intelligence

The second major trend in the near term is what the study calls the "dawn of ambient intelligence". This describes systems that embed connectivity and localised AI into everyday environments and devices.

According to the report, these systems increasingly merge into daily life and consumer services. They create new products and business models in sectors including retail, health, transport and urban services. The authors state that the spread of such systems increases the urgency of clear safeguards and policies on responsible use.

The report links this development with wider deployment of sensors, edge computing and tailored AI models. It notes that these technologies alter how individuals interact with digital services, as more decisions and interactions shift into the background of physical environments.

Converging technologies

Looking at a three to five-year horizon, the survey ranks converging frontier technologies as the most transformative trend for the digital economy. The report states that advances in AI are speeding progress in fields such as robotics, spatial computing and biotechnology.

This convergence enables faster experimentation and product cycles across multiple industries. It also raises questions around workforce transition, future skills, secure digital infrastructure, governance frameworks and safety standards.

The report notes that governments and companies will need to reassess regulatory structures and labour policies as applications spread. It highlights the risk that uneven preparedness could widen gaps between sectors and regions.

Trillions in value

The DCO study sets out several areas of potential economic value as these technologies gain ground. It estimates that immersive hybrid technologies could unlock up to USD $4.14 trillion globally. These technologies include digitally enhanced experiences that bridge physical and virtual environments.

The report forecasts that AI-accelerated workforce transformation could generate nearly USD $4.91 trillion in value. This figure reflects productivity gains from automation, new roles in data and AI management, and reconfiguration of workflows.

Holistic transformation of digital trade could add around USD $3.63 trillion, according to the analysis. This includes cross-border eCommerce, digital services exports and more integrated digital logistics and payments.

The report states that actual outcomes will depend on policy choices, infrastructure investment and the pace of adoption in both advanced and emerging economies.

Readiness gap

The survey finds that preparedness for the identified trends varies widely by region and sector. Respondents judged the private sector as better prepared than governments and civil society for the changes expected through 2026.

The authors say this divergence creates a risk of misalignment between regulation, public services and private-sector innovation. It also increases the likelihood of fragmented standards and duplicated investment.

The DCO positions the new trends report as a complement to its existing Digital Economy Navigator, which measures countries' digital maturity. The organisation states that using the tools together can show both the direction of digital transformation and current readiness levels.

Founded in 2020, the DCO brings together communications and information technology ministries from 16 member states. Its members represent about USD $3.5 trillion in combined GDP and a market of more than 800 million people, a majority of whom are under 35.

The organisation says the trends analysis will inform future cooperation with governments, companies, civil society groups and international institutions as they refine digital strategies and investment plans over the next five years.