Analyst firm Forrester estimates the Australian digital economy to grow from US$146 billion, to US$195 billion in 2028.
This puts Australia in the 12th spot globally, behind Spain and ahead of Mexico and Brazil.
Overall, the six biggest digital economies in the world are the United States, China, United Kingdom, Japan, Germany and South Korea.
Forrester sees the global digital economy grow by around 40 per cent from 2023 to 2028, reaching US$16.5 trillion in five years, accounting for 17 per cent of the total world gross domestic product.
That's a 7 per cent compound annual growth rate, with the United States and China capturing two-thirds of the digital economy, Forrester said.
The analysts measured the size and growth of a range of factors, including technology spend, retail, travel e-commerce, insurance e-commerce, ICT exports, chip manufacturing, and data centres.
Of these, online retail and travel are the principal drivers of growth, Forrester said in its Global Digital Economy Forecast, 2023-2028.
They are expected to put in CAGR of 9 and 7 per cent respectively in the five-year time period.
In Australia e-commerce for retail and travel capture the largest share of the digital economy.
For Australia, Forrester expects 27 per cent of Australian retailing to take place online in 2024.
Forrester said a country's research and development spend correlates with its digital econmy.
Australia well below the Organisation for Economic Cooperation and Development (OECD) country average of 2.7 R&D speending, reaching just 1.65 per cent in 2022.
Government R&D investment in Australia as a share of gross domestic product reached its lowest value since records began.
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