The lightning speed of technological development will lead to “extraordinary wealth creation,” and trends such as increased mobility and cloud computing will be some of the biggest drivers of performance in business, according to new research from Oxford Economics.

The context to the report, The New Digital Economy: How it will transform business, is a world in flux, with the “E7” (Brazil, Russia, India, China, Mexico, Indonesia and Turkey) forecasted to hold a bigger share of world GDP than the G7 by 2020.

This shift of economic and political power from West to East is combining with leaps in technology to propel emerging market growth, says the research firm, a commercial venture associated with Oxford University.

Among the “seismic shifts” that will transform the global landscape over the next five years is the coming of age of the global digital economy, which will give rise to a “third wave” of capitalism and vast wealth creation, the study predicts.

The issue is significant for wealth managers, as picking up new business is notoriously much easier in times of wealth creation, compared to the zero-sum game of competition the industry faces in low-growth times.

Of the many implications of the digital economy, 57 per cent of executives expect the mobility it allows to have the greatest positive impact on business. This is followed by the availability of business intelligence (37 per cent), cloud computing (36 per cent), and social media (31 per cent).

Oxford Economics predicts that the value of the global digital economy—including all forms of e-commerce and the total market for digital products and services—will reach $20.4 trillion by 2013, roughly 13.8 per cent of worldwide sales.

Another key trend is the way technology is transforming all aspects of business, and 60 per cent of executives predict it will help them provide more responsive customer care. Again, this issue is highly relevant for wealth managers, who often differentiate themselves on customer service.

Tied in with the rising share of GDP concentrated in the East, is the prediction that emerging market consumers will take center stage, creating opportunities for firms as disposable income grows much faster in these markets than in developed markets. In China and India, disposable income is increasing at an annual rate of some 8 per cent, compared to 2 per cent in the US.

As the digital age means people have access to vast amounts of information, business is expected to go into “hyperdrive,” according to Oxford Economics. This trend will see business intelligence becoming critical for companies, as they are expected to react to events in real time. In the study, 70 per cent of executives in the technology, information, communication and entertainment industries cited business intelligence as very or extremely important.

As these changes play out, firms will reorganize to embrace the new reality, the study predicts, and astute western firms are moving towards flexible structures suited to a digital world. For example, some are adopting globally integrated approaches that impose a consistent set of processes while creating centers for decision-making.

"The firms that will succeed are those that prepare for the East but protect their positions in the West. As such, embedding new technologies into their global strategy will be key," said Debra D'Agostino, editorial director of thought leadership at Oxford Economics.