Seven countries – Finland, Switzerland, Sweden, Israel, Singapore, the Netherlands and the United States – are leading the world when it comes to generating economic impact from investments in information and communications technologies (ICT), according to the World Economic Forum’s Global Information Technology Report 2016.
It says that worldwide, nations’ capacity to innovate is increasing across the board, although few have been successful so far in translating these investments into meaningful economic or social impact. Singapore leads the report’s Networked Readiness Index (NRI).
On average, this group of seven high-achieving economies at the pinnacle of the report’s NRI economic impact pillar scores 33 percent higher than other advanced economies and 100 percent more than emerging and developing economies. The seven are all known for being early and enthusiastic adopters of ICT and their emergence is significant as it demonstrates that adoption of ICT – coupled with a supportive enabling environment characterized by sound regulation, quality infrastructure and ready skills supply among other factors – can pave the way to wider benefits.
Europe remains at the technology frontier; seven of the top 10 NRI countries are European. Yet the performance range is wide, with Greece dropping four places to 70th position and Bosnia and Herzegovina closing the group at 97. Several Eastern European countries, notably the Slovak Republic, Poland and the Czech Republic, are making big strides, landing spots in the NRI top 50. Better affordability and large improvements in economic and social impacts are making major contributions to this success. Italy is another notable mover this year, improving 10 places to 45th position as the economic and social impacts of ICT are starting to be realized.
The Eurasia region continues its upward trajectory, with the average NRI for the region increasing significantly since 2012. The region is led by Kazakhstan, which continues on its positive trajectory of recent years to land in 39th position.
Malaysia leads the emerging Asian economies in 2016 and moves up one spot to 31st position overall. The country continues to perform strongly, supported by a government which is fully committed to the digital agenda. The top five in the region in terms of overall ICT readiness remain Malaysia, Mongolia, Thailand, China and Sri Lanka as in 2015. The group of Emerging Asian countries has been moving up and converging since 2012.
The performance range by countries in the Latin America and Caribbean region remains widely dispersed with almost 100 places between Chile (38th) and Haiti (137th). In order to foster the innovation forces that are key for thriving in the digitized world and the emerging Fourth Industrial Revolution, many governments in the region will urgently need to reinforce efforts to improve their regulatory and innovation environments.
The United Arab Emirates (26th) and Qatar (27th) continue to lead the Arab world in networked-readiness. In addition, the MENAP region (Middle East, North Africa and Pakistan) is home to two of the biggest movers in this year’s ranking: Kuwait (61st, up 11) and Lebanon (88th, up 11). In both cases, individuals are leading the charge, with the business sector catching up and strongly contributing to the successful performance. While governments are lagging behind in terms of digital adoption (Kuwait, 81st; Lebanon, 124th), the business community in both countries is registering an increased weight on ICT in government vision and efforts to improve the regulatory environment.
The NRI also sees several sub-Saharan African countries among the top upward movers, including South Africa (65th, up 10), Ethiopia (120th, up 10) and Côte d’Ivoire (106th, up 9). Leadership, in terms of digital adoption, is coming from different groups of stakeholders. While efforts are very much government-driven in Ethiopia and Côte d’Ivoire, the business sector is providing the most momentum in South Africa. The largest barriers to tackle for Côte d’Ivoire will be infrastructure and affordability; reversing the trend of a deteriorating business and innovation environment for South Africa; and boosting individual usage and skills for Ethiopia.
“The digital economy is an essential part of the architecture of the Fourth Industrial Revolution. In order for digital technology to continue contributing economic and social impact, societies need to anticipate its effects on markets and to ensure a fair deal for workers in digitized market environments. New models of governance will be key in this,” said Richard Samans, head of the Centre for the Global Agenda, member of the managing board, World Economic Forum Geneva.
“Cross-border data flows drive innovation and growth,” says Pastora Valero, vice president of Government Affairs, Cisco. “The countries and companies innovating most prominently know that it is the free flow of ideas and information, which leads to improvements in processes and products. Initiatives to foster the free flow of data are crucial to supporting the global nature of the data economy.”
“Digital is not just about technology. It is a state of mind, and the source of new business models, new consumption patterns, new ways for business and individuals to organize, produce, trade and innovate. In the global game of digital innovation, the performance and progress made by emerging economies such as Singapore, the United Arab Emirates or South Africa for example are remarkable: they may hold the promise of even more spectacular improvements in the ways digital technologies will be harnessed to competitiveness, growth and social progress in the coming years,” says Bruno Lanvin of INSEAD.
“Going forward, it will be important to reinforce data gathering efforts in order to more closely track the distributional impacts of the current transformations. This will make it possible to shape the digital economy in a way that delivers broad-based gains,” added Silja Baller of the World Economic Forum.
To read the Global Information Technology Report 2016 highlights, click here.