DCO Report: Digital Economy Set for 9.5% Growth to $28 Trillion in 2026, Driven by AI and Cybersecurity Needs

The global digital economy is accelerating toward a new scale of influence, with fresh projections estimating it will grow by a robust 9.5% in 2026. This extraordinary pace is set to make the digital sector expand three times faster than the expected overall global economic growth rate, which is currently projected to settle at around 3.1% for the same period. This assessment, released in the new Digital Economy Trends (DET) 2026 report by the Saudi Arabia-based Digital Cooperation Organization (DCO), frames the coming year as a pivotal moment where technological momentum, particularly driven by Artificial Intelligence (AI), will collide with profound challenges concerning governance, security, and global inclusion.

According to the DCO’s comprehensive analysis, the worldwide digital economy is forecast to reach an estimated $28 trillion next year, cementing its status as a central pillar of global commerce and society. This valuation is equivalent to 22% of global GDP, a significant leap from the digital economy’s estimated contribution of approximately 21% in 2025. The report, which draws on a broad primary survey from more than 400 respondents—including policymakers, economists, and technology executives across 26 countries—identifies 18 key forces reshaping digital activity and offers a strategic roadmap for nations aiming to harness this expansion effectively.

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The Imperative of Inclusive Growth

While celebrating the unprecedented speed of digital transformation, DCO Secretary-General Deemah AlYahya issued a strong warning that the benefits of this rapid technological change must be broadly and inclusively 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,” AlYahya stated.

The Secretary-General stressed that the future of the digital economy will be defined “not by the speed of innovation, but by how inclusively it is built”. This focus on inclusion is a core tenet of the DCO’s mission, which was established in November 2020 as the world’s first intergovernmental organization dedicated to accelerating digital transformation and ensuring digital prosperity for all. The DCO currently comprises 16 member states, including Saudi Arabia, Jordan, Pakistan, Bahrain, Bangladesh, and Oman, and aims to bridge the digital divide by promoting multilateral and multistakeholder cooperation.

The urgency of this inclusive mandate stems from persistent global inequalities. AlYahya has previously highlighted that more than one third of the world’s population still lacks access to the internet, indicating that the benefits of the growing $28 trillion economy risk exacerbating existing divides. To mitigate this risk, the DCO calls for stronger foundations to ensure that advances in artificial intelligence—a field whose global market value is expected to exceed **$800 billion by 2030**—remain accessible, safe, and empowering for all.

The organization emphasizes empowering marginalized communities, particularly women and youth, to participate fully in the digital sphere. The DCO actively champions initiatives focused on retaining women in the Information and Communications Technology (ICT) sector and creating a regulatory environment that bridges the gap between innovators and the public sector. This approach reflects a deep-seated belief that diverse perspectives are essential, especially in the development of AI, to avoid potential risks and ensure the technology serves everyone. The ultimate goal is to co-create high-impact initiatives leading to a world where every nation, company, and individual has a fair opportunity to prosper in an inclusive and sustainable digital economy.

The Immediate Forces of 2026: Security and Ambient Intelligence

The DET 2026 report pinpoints two trends expected to deliver the most significant positive socio-economic impact in the immediate year ahead: Strengthening End-to-End Cybersecurity and The Dawn of Ambient Intelligence.

Cyber-Resilience at the Forefront: Cybersecurity has surged to the top trend for 2026 amid a relentless wave of increasingly sophisticated cyberattacks that governments and companies worldwide are struggling to confront. The DCO warns of widening capability gaps among nations and institutions, a challenge compounded by new, complex risks associated with generative AI and the eventual advent of future quantum computing. Generative AI can be leveraged by malicious actors to create highly convincing phishing campaigns and automate sophisticated digital intrusions, dramatically lowering the barrier to entry for cybercrime.

The sheer volume of potential economic value at risk—estimated by the DCO at $3.13 trillion in value linked to strengthening end-to-end cybersecurity and resilient digital infrastructure—underscores why cyber-resilience has become an immediate, high-priority investment area. Governments and enterprises are responding by increasing demand for robust, compliant hybrid cloud solutions and bolstering their workload governance strategies to manage risk and improve scalability.

The Rise of Ambient Intelligence: The second major trend for 2026 is the emergence of ambient intelligence, defined as AI-enabled systems that become seamlessly embedded in everyday environments. This “invisible intelligence”—powered by sensors, ubiquitous connectivity, and localized edge AI—is merging into daily life, from connected homes and smart factories to advanced urban and transport systems.

Ambient intelligence promises to enrich experiences and unlock new opportunities through systems that learn, adapt, and operate autonomously. For example, enterprise applications are expected to integrate autonomous task agents, with forecasts indicating that up to 40% of enterprise applications will include task-specific AI agents by 2026. This pervasive adoption, however, simultaneously underscores the necessity for strong ethical safeguards, transparent governance frameworks, and responsible use policies to manage the vast amount of data being collected and processed.

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Frontier Convergence and the 3-5 Year Horizon

Looking beyond the immediate shifts of 2026, the DCO report argues that the deepest and most transformative effect on the digital economy over a three-to-five-year horizon will come from Converging Frontier Technologies. This trend involves the simultaneous advancement and fusion of technologies spanning AI, robotics, spatial computing (such as Virtual and Augmented Reality), and biotechnology.

This convergence is accelerating the speed and scope of experimentation across all sectors. In the Middle East, for instance, regional data center capacity is rapidly expanding, projected to reach 5-6 GW by 2030, driven by hyperscaler expansion and national AI strategies. This vast expansion of computational power is the necessary infrastructure foundation for scaling frontier applications, positioning regions as emerging exporters of secure and resilient AI services.

However, this rapid transformation also heightens challenges that require proactive policy interventions:

1. Workforce Adaptation: The convergence accelerates AI-driven automation, which, while boosting productivity, is catalyzing the fastest workforce transformation in history. This creates structural pressures on employment, concentrating job displacement in administrative and middle-management roles susceptible to automation. The economic implications of AI-accelerated workforce transformation are substantial, valued at $4.91 trillion in potential opportunity, but require sustained investment in upskilling and reskilling to avoid skills gaps. The DCO advocates for public-private reskilling funds and the adoption of verifiable, cross-border micro-credentials to validate AI and digital competencies.
2. Digital Infrastructure and Governance: Scaling these frontier technologies demands robust and secure infrastructure. The move toward cloud-dominated infrastructure requires resilient and compliant platforms, particularly in regions where cloud security is a top concern. Simultaneously, the proliferation of AI and spatial computing necessitates the urgent establishment of clear digital governance frameworks and consistent safety standards to manage ethical risks and data privacy concerns.
3. Digital Trade Transformation: The report highlights a staggering $3.63 trillion in potential value from the holistic transformation of digital trade. This value is realized through the expansion of global e-commerce, the migration of transactions to digital payments and embedded finance platforms, and the streamlining of cross-border logistics through platforms that aggregate supply chains. The accelerated use of digital wallets, which are projected to handle over $25 trillion of transactions by 2027, is central to this trend, embedding identity and authorization directly into marketplaces and lowering transaction abandonment rates. Furthermore, digitally delivered services are set to expand by around 4.7% in 2026 as major platforms continue to grow their market reach globally.

Quantifying the Trillion-Dollar Market Shifts

The Digital Economy Trends 2026 report provides a detailed quantification of the primary economic opportunities that the digital acceleration is expected to unlock globally, totaling nearly $15.81 trillion across four domains.

The largest single opportunity identified is the potential value derived from AI-accelerated workforce transformation, estimated at $4.91 trillion. This figure does not solely represent increased automation savings but encompasses the immense productivity gains realized by creating a human-machine hybrid workforce, alongside the value generated by new jobs and sectors created through advanced data and AI literacy.

Second in size is the opportunity linked to immersive hybrid technologies, which include digital twins, Virtual Reality (VR), Extended Reality (XR), and spatial computing. These technologies are set to unlock $4.14 trillion by enhancing collaboration, accelerating product development (via digital twins), and revolutionizing areas like remote training, maintenance, and complex task execution.

The transformation of global digital trade is the third major opportunity, projected to yield $3.63 trillion in value.

Finally, the value associated with strengthened end-to-end cybersecurity and the investment in resilient digital infrastructure contributes an estimated $3.13 trillion. This opportunity highlights the financial importance of security as a critical enabler of trust, without which the digital economy cannot function at scale.

The Role of the Digital Economy Navigator (DEN)

To help its member states and the broader global community prepare for these monumental shifts, the DCO complements the DET 2026 report with the Digital Economy Navigator (DEN). The DEN is a sophisticated global assessment tool designed to measure national digital maturity. It serves as an evidence-based framework, enabling countries to identify specific gaps, adopt international best practices, and prioritize targeted policy and investment interventions.

The DEN’s unique framework assesses the digital economy through the lens of three intersecting dimensions: Digital Enablers, Digital Business, and Digital Society.

• Digital Enablers: Focuses on foundational elements necessary for a digital economy, including broadband coverage, connectivity speed, and most importantly, digital literacy, skills, and cybersecurity capabilities.
• Digital Business: Measures the production of hardware, software, and telecommunications services, as well as the uptake of digital inputs in traditional industries (e.g., e-commerce adoption).
• Digital Society: Assesses technology’s direct impact on human wellbeing, covering everything from access to telehealth and e-learning to digital job creation, and the promotion of digital equity.

The DEN relies on a comprehensive methodology, combining over 100 established quantitative indicators from secondary sources with proprietary data gathered from a large-scale global survey. By tracking progress across these dimensions, the DCO provides decision-makers with the necessary data to cultivate a more inclusive and sustainable digital economy, ensuring that the unprecedented growth of the $28 trillion market translates into amplified sustainability and enhanced quality of life for all citizens. The report highlights that while preparedness varies, the private sector is viewed by respondents as the most ready to respond to the shifts expected in 2026, emphasizing the crucial role of cooperation between government and industry to ensure governance keeps pace with innovation.

The launch of the DET 2026 report at the DCO’s Development Finance Conference, “MOMENTUM”, acts as a clear call to action: the time for collaborative strategy and investment is now, before the accelerating speed of AI and frontier technologies creates digital divides that become permanent.

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By: Montel Kamau

Serrari Financial Analyst

15th December, 2025