digitalization index by country

… Without question, the Stand Out and Break Out countries are benefiting from a combination of the strong rates of digitalization and the involvement of governments in orchestrating digital economies. This growth rate, which we refer to as momentum, is a lead indicator of a country’s future digital potential and prospects. While much has changed even since 2015, there are roadblocks on the journey that have remained surprisingly resilient. Around the world, digital access itself is far from uniform: Barely 50% of the world’s population has access to the internet today. Dubai, in particular, is rapidly emerging as a world class digital nation. All rights reserved. Digital technology is widespread and spreading fast. Consider the five most salient features of today’s digital landscape. This was measured by examining the ease of doing business within each country, including factors such as: local rule of law, the Ease of Doing Business Index, the Logistics Performance Index (LPI) infrastructure rating, and the time it takes businesses to obtain access to electricity. Ben Gummer’s claim, quoted above, is based on a 2016 United Nations E-Government Survey which positioned the UK in pole position in terms of both e-government development and e-participation as shown in Figure 1 below.. A major hurdle is the continuing stickiness of cash, which has not been displaced by digital alternatives despite myriad options. Digitalization is the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business. The world’s biggest trade deal, the Regional Comprehensive Economic Partnership (RCEP), was signed by China, Australia, New Zealand, Japan, South Korea and all 10 Association of Southeast Asian Nations … Our analysis of digital evolutions yields several implications for both public- and private-sector leaders as they explore ways to enhance the state of the digital economies across the world. How do countries accelerate their digital momentum. The index indicates that countries are clustered as Digitally Constrained,Emerging, Transitional or Advanced, with varying degree of contribution of digitization to economic growth. The fact that German companies rate themselves so much worse than their European neighbors do is astounding. DESI area report: Research and Development ICT. If we fail to pro-actively select our place within the global manufacturing industry we run the risk of continuing on this path of non-industrialization. Each of these five features contains both upsides and challenges. We identified many hotspots around the world where these changes are happening rapidly and other spots where momentum has slowed. As part of a collaboration between the Fletcher School at Tufts University and Mastercard, we created the Digital Evolution Index and analyzed the state and rate of digital evolution across 60 countries. The DAI is a worldwide index that measures countries’ digital adoption across three dimensions of the economy: people, government, and business. While more people can benefit from access to information and communication, the potential for bad actors to create widespread havoc increases; with every year, the incidents of cyberattacks get bigger and have wider impact. Often held back by relatively weak infrastructure and poor institutional quality, Break Out countries would do well to foster better institutions that can help nurture and sustain innovation. In terms of the mobile industry as the driver for service anywhere and anytime, specific gaps between Latin America and developed countries have to be considered. Yet in this short period, digital technologies have upended our world. Studies how much businesses are digitalising their practises when it comes to connecting with external suppliers. Based on their stock prices on July 6, 2017, Apple, Alphabet, Microsoft, Amazon, and Facebook were the five most valuable companies in the world. Most of the developing world is overwhelmingly cash-dependent; in Malaysia, Peru, and Egypt, only 1% of transactions are cashless. The overall DAI is the simple average of three sub-indexes. And when Unionbank president and CEO Edwin Bautista announced his vision to become a fully digital bank and even one of the top three universal banks in the country by 2020, he had is finger on the launch button early. Which country leads the world in digital? Will the world order as portrayed in this year’s Digital Evolution Index get overturned as transformational technologies, such as artificial intelligence, cause widespread changes or regulatory and political considerations add to the unevenness of digital markets? There is both anticipation and apprehension about what lies on the other side of the threshold of the “second machine age.” More than 1 billion jobs and $14.6 trillion in wages are automatable by today’s technology, which could open the door to new ways to harness human energy as well as to displacing routine jobs and increasing social inequities. The Most Tech-Savvy Governments. The United States, Germany and the Netherlands make the top three of the 2018 EDI ranking. This evolution is the outcome of an interplay among four drivers, with about 170 indicators across them (see sidebar). United United Kingdom remains in second place followed by Hong Kong (3rd), United States (4th) and Netherlands (5th. The IMD World Digital Competitiveness Ranking 2019 results . To stay ahead, these countries need to keep their innovation engines in top gear and generate new demand, failing which they risk stalling out. Digital Economy and Society Index 2020 (DESI) reports are based on 2019 data. The pandemic has boosted networking in Germany. Digitalization has many different aspects, which are explained in this article. But no one should panic, because jobs are … The countries investigated in the process represent over 70% of the global population and around 5.5 billion people. One reason for the advanced state of digitalisation digitalization in the Baltic country is to be found in its low population density. Also, digitalization should be used extensively, especially in situations of lockdown and switching from classical teaching to online systems (Bejinaru, 2019; Tsui & Dragicevic, 2018). The score is based on five components: Regulation, Knowledge, Connectivity, Infrastructure and Size. First, digital assets. Notably, two of the world’s most significant economies, the U.S. and Germany, are at the border of Stand Out and Stall Out, with a third, Japan, in the neighborhood. While the Netherlands, France, Sweden, and Switzerland are among the least cash-reliant countries in the world, even in the Eurozone, 75% of point-of-sale payments are in cash. 15. Enabling internet access on the mobile phone provides the biggest bang for the buck. Where quantified, agreement or strong agreement to indicators were found to be between 35 and 65 percent. In Africa, while the two largest economies, Nigeria and South Africa, remain in Break Out and Watch Out zones, respectively, digitally savvy Kenya has picked up an impressive level of momentum by assembling a thriving ecosystem. They have deep resources for innovation with the ability to accelerate the penetration and adoption of digital products. Chart. In conclusion, the world’s digital economy stands at a threshold where opportunity and risk stand in balance. Every country and multinational needs to be sensitive to the map of digital momentum so that they can tailor their strategies accordingly. In our 2018 ranking, the US, Germany and the Netherlands are the top 3 digitagile countries across the world. the country of advanced technologies, the Global Connectivity Index (GCI-C) devel- oped by Huawei [ 9 ] is worth mentioning. Thanks to DiGiX 2018, BBVA Research’s multidimensional digitization index, it is possible to compare which countries are the most advanced in this area, and discover their strengths and weaknesses. Moreover, how strongly each of them is felt varies depending on where you are in the world. The United Kingdom is still included in the 2020 DESI, and EU averages are calculated for 28 Member States. The picture that summarizes the state of the digital planet will evolve when it does. The index covers 180 countries on a 0–1 scale, and emphasizes the “supply-side” of digital adoption to maximize coverage and simplify theoretical linkages. country on digital startups. In parallel, countries in Latin America can learn some lessons from smaller, faster-moving countries, such as Colombia and Bolivia. 4. Business and Government Investment Building digital infrastructure and … As a measure of how well an economy is using information and communications technologies to boost competitiveness and well-being, it will be very interesting to watch the position of the UAE over the next few years. Within the digital entrepreneurship sector, IPOs and exits have not been keeping pace with the record sums of capital being pumped in. Digital commerce must still contend with cash. Australia ranked highest in the 2019 Digital Quality of Life index, a study produced by Surfshark, a virtual private network based in the British Virgin Islands. Now in its third year, the IMD World Digital Competitiveness Ranking measures the capacity and readiness of 63 economies to adopt and explore digital technologies as a key driver for economic transformation … In 2013 85% of the world’s transactions were in cash. Because the distance to local authorities is usually considerable, Estonians began working on digital solutions very early on. This can act as a drag on any initiative. Leaders of the digital world: US vs China. Two years on, depending on where we live, we continue to move at different speeds toward the digital planet. Countries with high-performing digital sectors, such as those in the EU, typically have had strong government/policy involvement in shaping the digital economies. Companies need to develop digital strategies and focus on what are the key success factors of digital transformation. Upstream supply chain phase. Our inquiry started with the following questions: By measuring each country’s current state of digital evolution and its pace of digital evolution over time, we created the following chart, a map of our digital planet (see chart below). Momentum is picking up in places like China, Malaysia, Bolivia, Kenya, and Russia, even though those countries may not be as digitally advanced as standouts New Zealand, the U.K., the UAE, and Singapore. A high score indicates active digital efforts across industry and government, backed by the capital, skills and technology to scale further. The five-country surveys, covering approximately 1,200 firms, provided the empirical base to examine the extent to which advancements in digitalization are evolving in each country. Alongside business innovation, digitalization – the development of digital innovations – is one of the most important business trends for the future of the economy. They are leaders in driving innovation, building on their existing advantages in efficient and effective ways. As regards mobile subscription penetration, there are similar behaviors, with 110–113 subscriptions per 100 inhabitants, but typologies differ heavily. Many might be tempted to answer that the US does, but the answer actually depends on what aspect of “digital” you’re looking at. Euler Hermes presents its Enabling Digitalization Index (EDI) 2018, which illustrates each country’s ability to provide the necessary environment for business to succeed in an increasingly digitalized global economy. Today , authorities and companies offer over 3,000 online services. India, with its 462 million internet users, has a digital economy representing arguably the greatest market potential for global players; however, it operates in multiple languages and multiple infrastructure challenges, despite the government having taken sweeping actions that affect the digital market. The high momentum of Break Out countries and their significant headroom for growth would make them highly attractive to investors. Traditional trading hubs (such as Hong Kong, Singapore, and the UK) and emerging digital hubs (such as New Zealand and Estonia) can take the lead in creating such “smart” digitally enabled ecosystems. Publication Finder ... "Digitalization index of banks in Russia in 2020, by stage of customer journey*." The United States, Germany and the Netherlands make the top three of the 2018 EDI ranking. With products that rely on network effects, these players enjoy economies of scale and dominant market share. Country size is also a factor. Cross-border flows of digitally transmitted data have grown manifold, accounting for more than one-third of the increase in global GDP in 2014, even as the free-flow of goods and services and cross-border capital have ebbed in the aftermath of the 2008 recession. Lebanon is another example; surpassed by Morocco in the Enabling Digitalization Index and ranked at the 90 th position in the Digitization Index out of 100 countries worldwide. Tools . country GDPs. Which actors are the prime drivers of competitiveness: public or private sector? For global technology players and policy makers, it is essential to understand how the progress toward a digital planet is proceeding in different parts of the world. Authors’ note: We are deeply grateful to Michaela Beck, Desmond Choong, Christina Filipovic, Yuwa Hedrick-Wong, Cassandra Pagan, Caroline Troein, Paul Trueman, and Christopher “Rusty” Tunnard, whose expertise, analyses, and insights have been essential for this research. Stall Out countries may look to Stand Out countries for lessons in sustaining innovation-led growth. The various reports present the data in areas like connectivity, digital skills, digital public services, and more. countries/organizations have started the digitalization path, providing the necessary environment for its development but still with significant challenges. DIGITALIZATION in the 15-country mega trade deal could improve trade systems with key partners, a research fellow from the Philippine Institute for Development Studies (PIDS) said. What are the patterns of digital evolution around the world? Finland, Sweden, Denmark and the Netherlands scored the highest ratings in DESI 2020 and are among the global leaders in digitalisation. While digitalization is advanced in places like Norway, Sweden, Switzerland, Denmark, and Finland, the momentum there has slowed, and is slowing in the U.S., Germany, and Japan as well. The Euler Hermes Enabling Digitalization Index (EDI) measures the ability – and agility – of countries to help digi-tal companies thrive and traditional businesses harness the digital dividend. The aggregate business digitalization index (BDI) in Russia was measured at 50 points. DOES digitalization lead to a renaissance? At HBR, we believe that a well-designed index can provide useful insights, even though by definition it is a snapshot of a bigger picture. Clearly, the most exciting region in the world, digitally speaking, is Asia, with China and Malaysia as exemplars. a country’s digital readiness. The United Kingdom is still included in the 2020 DESI, and EU averages are calculated for 28 Member States. Now in its third year, the IMD World Digital Competitiveness Ranking measures the capacity and readiness of 63 economies to adopt and explore digital technologies as a key driver for economic transformation … This will enable Africa to create a niche within the global economy. The score is calculated based on five components: connectivity, infrastructure, regulation, knowledge and size. Even India’s demonetization experiment has not broken the country’s heavy cash dependence. Euler Hermes presents the third edition of its Enabling Digitalization Index (EDI), which analyzes a country’s ability to provide an environment where companies can digitally transform successfully. More sensible and value-creating investments are needed, rather than a herd mentality that has resulted in a stampede of unicorns, while starving more complex, less fad-driven venture ideas that take on deeper problems. Access to electricity is considered a foundational layer of infrastructure. Broader, more systemic changes are needed to boost digital evolution in this type of environment. The United States take the lead by far with a score of 87 out of 100. The country’s ability to use digital solutions is essential in the fast-paced technologically advancing global world. Smaller countries with strong institutions can create high value as early adopters and create a demonstration effect for the world by assembling the right ecosystem. Politics, regulations, and levels of economic development play a major role in shaping the digital industry and its market attractiveness. Digital markets are uneven. Even in the short period since we published the previous edition of the Digital Evolution Index, much has changed in the journey to the digital planet, and just as surprising, there are many speed bumps scattered along the way. Country Outlook . Second, those working to accelerate their country’s digital momentum should focus on specifics: identifying and amplifying the country’s unique drivers of digital momentum. 3 Established: countries… Inclusive Internet Index, Euler Hermes’ Enabling Digitalization Index, and Dell Technologies’ Digital Transformation Index. digital maturity of the country. As for the U.S., it is at risk of falling into the Stall Out zone. To benchmark them, the index measures how much companies invest in hardware, software, data, and IT services (whether through outright purchases or contracting with third parties to fill in gaps). Digital technology is reshaping life and business around the globe, but the pace of change varies widely from one country to the next. country, including factors such as: local rule of law, the Ease of Doing Business Index, the Logistics Performance Index (LPI) infrastructure rating, and the time it takes businesses to obtain access to electricity. Countries with a long road ahead in their digital development include South Africa, Egypt, and Pakistan. First, more digital innovators should recognize that public policy is essential to the success of the digital economy. Copyright © 2020 Harvard Business School Publishing. The US on top of the digitagile world. Production phase. The Euler Hermes Enabling Digitalization Index (EDI) measures the ability – and agility – of countries to help digital companies thrive and traditional businesses harness the digital dividend. Euler Hermes presents its Enabling Digitalization Index (EDI) 2018, which illustrates each country’s ability to provide the necessary environment for business to succeed in an increasingly digitalized global economy. The IMD World Digital Competitiveness Ranking 2019 results . Retail e-commerce sales worldwide are expected to hit $4 trillion by 2020, about double of where it is now. Where momentum is picking up, and where it’s stalling out. The fact is, technological advances have obliged people to become trained in digital technology; some studies predict that the impact of artificial intelligence and other technologies will be such that,nearly two million jobs will be in danger. However, the role of digitalization has become particularly important in the face of worldwide pandemic. While digitalization is advanced in places like Norway, Sweden, Switzerland, Denmark, and Finland, the momentum there has slowed, and is slowing … Countries on this chart fall into four zones: Stand Out, Stall Out, Break Out, Watch Out. Digital players wield outsize market power. BloombergNEF’s 2019 ranking reveals the industrial digitalization status of 40 countries and ranks them using metrics in investment, governance, workforce and technology. The UAE. It is essential for them to recognize the risks of plateauing and look to the smaller, higher-momentum countries to explore how policy interventions could be effective in pushing a country into a zone of greater competitiveness. Over the past year, all EU countries improved their digital performance. The least digitally advanced countries must allocate limited resources wisely. To use them you only need a citizen’s ID card. Let us look at each of our three broad index categories in turn. This is the third edition of our ranking (a score from 0 = worst to 100 = best). To avoid stalling out and rebuilding momentum, policies need to be adopted for: public-private partnerships on digital innovations; better integration of automation, data, and new technologies into the legacy economy; investments in reskilling workers and teaching students in schools the skills and thinking to thrive in a digital world; improving access to capital and digital infrastructure and reducing the many inequities; sensible regulations that keep pace with the transforming rules of competition and have a dynamic view of protecting consumers’ interests without stifling innovation; and reimagining U.S. competitiveness in terms of its digital economy and international data flows and thinking beyond traditional manufacturing and trade of physical goods and services. Five components: Regulation, knowledge, Connectivity, infrastructure, including measures of mobile fixed. 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