Scotland could add £12bn to its economy and create 20,000 jobs if it embraces digital technologies, according to a new report.
ScotlandIS, the trade body for the industry, has claimed that the country could be amongst the best digital economies in the world.
However, it warned that Scotland could lag even further behind other economies if urgent action was not taken soon.
It has called for tax breaks and a direct telecoms connection to Europe.
The organisation said that Scotland was "over-reliant on London for connectivity to Europe and the rest of the world" and a direct link to mainland Europe would solve that problem.
David Cairns, chairman of ScotlandIS, warned the country it would be "left in the dark ages" if it did not invest in digital technology.
He added: "As well as helping to combat social and geographic exclusion, we would create a digitally skilled nation which would add billions of pounds to our economy every year.
"Many other comparable countries are leapfrogging us. In turn these tech-savvy countries are enjoying greater economic benefits, including productivity gains, improved competitiveness and a greater ability to export through increased e-commerce."
The report said that "despite the opportunity e-commerce offers to level the geographic playing field", Scotland was under-performing in relation to the rest of the UK.
Although it said some companies had transformed their business by trading on the internet, others could do more and that would result in another £4bn of income.
ScotlandIS has called for the appointment of a "Digital Champion" to drive through change.
The IT and telecoms industry employs 108,000 people and contributes £3.4bn to the Scottish economy.