1. The rate of investment in digital assets.
Globally, investment in digital assets has been growing steadily for decades but accelerated significantly in the past five years. Our baseline assumption is that the rate of growth in digital investment in each individual country since 2011 continues into the future. In our high digitalization scenario, we assume that it accelerates by the same amount in the next 10 years as it did in the past five. In the low-digitalization scenario, we assume that the rate of investment falls back to pre-2011 levels.
2. The return on investment for digital technologies.
Our baseline projection assumes the average return on investment for digital technologies remains the same as it has been historically, as estimated by our econometric model. In the high digitalization scenario, we assume that due to a smart digital strategy and success in overcoming the constraints to technology adoption, the return on investment for digital technologies increases. For a low-digitalization scenario, we assume it decreases. We based these assumptions on a statistically plausible upper and lower bound around the results of the econometric analysis.