Irish businesses need to integrate digital thinking into their business model if they are to retain and grow their markets, according to a new report by consultancy firm BearingPoint.

The report, Leap into the connected digital economy, says the convergence and mass adoption of new technologies is creating a digital environment, where businesses are investing in new skills and looking to their digital-focused partners to provide technological insight and value to their operations.

BearingPoint figures suggest that the online market will constitute 20 per cent of the entire world market by 2030. Currently, Ireland’s internet economy is worth 5 per cent of GDP, and is estimated to grow to 10 per cent, or €21.1 billion, by 2020.

While the report outlines the consistently strong value of physical stores, it says businesses can offer bespoke, personalised services, through the use of emerging digital technologies.

For example, it highlights how car manufacturers, through the use of integrated digital services like music streaming, automatic traffic updates and anti-theft tracking, are enhancing customer experience.

The report warns that an unwillingness to adapt to new technologies, or a general ignorance of them, may be holding back Irish businesses.

It highlights the international examples of Blockbuster, Kodak and EMI, which failed to adopt a meaningful digital strategy in the face of internet-born competitors, suffering considerably as a result.

BearingPoint Ireland partner Michael O’Dwyer said Irish businesses can forge an entirely new digital environment using technologies such as big data and cloud computing.

“Adoption of these new technologies drives up not only productivity and efficiency, but profitability”.

Irish people are estimated to have spent €6 billion online in 2014, according to UPC Report on Ireland's Digital Future. In 2013, the Government estimated that Irish online shoppers spent only €1.1 billion on Irish goods and services.