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). Companies need to develop digital strategies and focus on what are the key success factors of digital transformation. 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. While much has changed even since 2015, there are roadblocks on the journey that have remained surprisingly resilient. Leaders of the digital world: US vs China. One of us (Bhaskar) has made the point that there is a “missing political debate” in the U.S. over the digital economy, despite that fact that American digital companies and innovations are pre-dominant worldwide. The Digital Evolution Index, a joint project between The Fletcher School at Tufts University and Mastercard, traces the emergence of a “digital planet.” In other words, it maps how physical interactions – in communications, social and political exchange, commerce, media and entertainment — are being displaced by digitally mediated ones, and pinpoints where this transition is happening most rapidly. 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. 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. 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.. The country benefits from a large market, a strong knowledge ecosystem and a … Around the world, digital access itself is far from uniform: Barely 50% of the world’s population has access to the internet today. 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. With products that rely on network effects, these players enjoy economies of scale and dominant market share. The Digital Economy and Society Index (DESI), Integration of Digital Technology by Enterprises, Digital Economy and Society Index Report - the telecoms chapters. Access to electricity is considered a foundational layer of infrastructure. Their rise to prominence is evidenced in the number . Figure 4: The Digital Evolution Index. world’s largest internet user population – 721 million, greatest market potential for global players, 75% of point-of-sale payments are in cash, Institute for Business in the Global Context, Chief Enterprise Security Solutions Officer. 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. … 15. To stay ahead, these countries need to keep their innovation engines in top gear and generate new demand, failing which they risk stalling out. DESI area report: Research and Development ICT. The score is based on five components: Regulation, Knowledge, Connectivity, Infrastructure and Size. The picture that summarizes the state of the digital planet will evolve when it does. First, digital assets. The five top scoring countries in the DEI 2017 ranking — Norway, Sweden, Switzerland, Denmark, and Finland — are all in the Stall Out zone, reflecting the challenges of sustaining growth. The score is calculated based on five components: connectivity, infrastructure, regulation, knowledge and size. The index indicates that countries are clustered as Digitally Constrained,Emerging, Transitional or Advanced, with varying degree of contribution of digitization to economic growth. of such companies whose businesses have attained the $1 billion of value benchmark—so-called unicorns. Let us look at each of our three broad index categories in turn. Copyright © 2020 Harvard Business School Publishing. The United States take the lead by far with a score of 87 out of 100. The European Union has 412 million internet users, but its market is fragmented; it is still in the process of creating a “digital single market.” In many countries, several websites or digital companies are blocked. digital maturity of the country. Clearly, much of this has to do with the digital momentum being experienced in countries around the world, as well as with the systemic nature of the forces that govern digital evolution. This evolution is the outcome of an interplay among four drivers, with about 170 indicators across them (see sidebar). We can expect to see plenty of investor and entrepreneurial interest in this region; it is critical that the political institutions are stable and supportive. Digital players wield outsize market power. Below, we present a short summary of recent research in this area. We always urge you to read the methodology carefully. 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. 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 … The US on top of the digitagile world. 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. Country size is also a factor. Also, digitalization should be used extensively, especially in situations of lockdown and switching from classical teaching to online systems (Bejinaru, 2019; Tsui & Dragicevic, 2018). Digital Economy and Society Index 2020 (DESI) reports are based on 2019 data. countries/organizations have started the digitalization path, providing the necessary environment for its development but still with significant challenges. Currently, the countries have to use innovative solutions in their fight against the virus and the consequences of the epidemic. However, the role of digitalization has become particularly important in the face of worldwide pandemic. Harvard Business Publishing is an affiliate of Harvard Business School. With the world’s largest internet user population – 721 million – China has a parallel digital market because so many of the major global players have no presence there. How do countries accelerate their digital momentum. 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 … It is barely 20 years since Sergey Brin and Larry Page registered the domain name google.com, and only 10 years since Steve Jobs walked onto a stage in San Francisco and introduced the iPhone. Even India’s demonetization experiment has not broken the country’s heavy cash dependence. The high momentum of Break Out countries and their significant headroom for growth would make them highly attractive to investors. In 2013 85% of the world’s transactions were in cash. Break Out countries are low-scoring in their current states of digitalization but are evolving rapidly. 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. The IMD World Digital Competitiveness Ranking 2019 results . 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. 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. Watch Out countries face significant challenges with their low state of digitalization and low momentum; in some cases, these countries are moving backward in their pace of digitalization. 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. They are leaders in driving innovation, building on their existing advantages in efficient and effective ways. Two years on, depending on where we live, we continue to move at different speeds toward the digital planet. 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. 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. Of these, 54 percent are based in the United States to date, with 23 percent in China, and 10 percent in Europe. The United Kingdom is still included in the 2020 DESI, and EU averages are calculated for 28 Member States. Broader, more systemic changes are needed to boost digital evolution in this type of environment. Where momentum is picking up, and where it’s stalling out. The countries investigated in the process represent over 70% of the global population and around 5.5 billion people. 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. 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. Dubai, in particular, is rapidly emerging as a world class digital nation. Inclusive Internet Index, Euler Hermes’ Enabling Digitalization Index, and Dell Technologies’ Digital Transformation Index. access to a mobile phone than to a toilet. Digital technologies are poised to change the future of work. However, sustaining consistently high momentum over time is challenging, as innovation-led expansions are often lumpy phenomena. Which countries are the most digitally competitive? DOES digitalization lead to a renaissance? The United States, Germany and the Netherlands make the top three of the 2018 EDI ranking. Upstream supply chain phase. Despite uncertainties regarding its reforms agenda, the country is seen as pivotal to Europe’s regeneration. the country of advanced technologies, the Global Connectivity Index (GCI-C) devel- oped by Huawei [ 9 ] is worth mentioning. They have deep resources for innovation with the ability to accelerate the penetration and adoption of digital products. The United Kingdom is still included in the 2020 DESI, and EU averages are calculated for 28 Member States. Every country and multinational needs to be sensitive to the map of digital momentum so that they can tailor their strategies accordingly. country GDPs. Furthermore, we placed a focus on whether two structural features of developing countries, The most valuable non-American company, 7th overall, was China’s e-commerce giant, Alibaba Group. The IMD World Digital Competitiveness Ranking 2019 results . The Enabling Digitalization Index created by Euler Hermes helps measuring the “digitagility” of countries, with the US, Germany and the Netherlands on the podium, and shows five options for countries to move up the EDI ranking. Based on their stock prices on July 6, 2017, Apple, Alphabet, Microsoft, Amazon, and Facebook were the five most valuable companies in the world. Digital commerce must still contend with cash. Digital markets are uneven. The surest way for these countries to move the needle on momentum would be to improve internet access by closing the mobile internet gap — that is, the difference between the number of mobile phones and the number of mobile phones with internet access. Because the distance to local authorities is usually considerable, Estonians began working on digital solutions very early on. Also, there is a difference in the number of the Arab countries included in these indices. Enabling internet access on the mobile phone provides the biggest bang for the buck. Based on a survey of business leaders that ranks which markets are likely to attract the most investment in the next three years, we find that investor sentiments reveal a variety of paradoxes in the environment for FDI, many of which can be explained by the rise of the age of multi-localism. The aggregate business digitalization index (BDI) in Russia was measured at 50 points. Key economic and social indicators. Despite some technical hurdles, working from home is on the rise here to an extent thought impossible a couple of months ago. The index analyzes the economies of 99 different countries. 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. Publication Finder ... "Digitalization index of banks in Russia in 2020, by stage of customer journey*." Click on the countries displayed within the map below to see the country-specific reports on digital performance, or click in the list. 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. Digital technology is reshaping life and business around the globe, but the pace of change varies widely from one country to the next. Depending on a country’s level of digital evolution and economic advancement, there are different drivers that are primarily responsible for digital momentum. Clearly, the most exciting region in the world, digitally speaking, is Asia, with China and Malaysia as exemplars. To use them you only need a citizen’s ID card. We identified many hotspots around the world where these changes are happening rapidly and other spots where momentum has slowed. 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. We introduced the Digital Evolution Index in HBR in 2015 to trace the emergence of a “digital planet,” how physical interactions — in communications, social and political exchange, commerce, media and entertainment — are being displaced by digitally mediated ones. So do high-momentum countries (such as Singapore, New Zealand, and the UAE) as well as many Break Out countries (including China, Malaysia, and Saudi Arabia). Digital technology is widespread and spreading fast. 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. Chart. 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 … Alongside business innovation, digitalization – the development of digital innovations – is one of the most important business trends for the future of the economy. 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. The Industry Digitalisation Index (IDI), tracks businesses’ digitalisation progress across sectors, and spans four separate functions of digitalisation in the processes of trade and general business activities. 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. 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. The question governments need to ask themselves is how they align a ‘here-and-now’ emphasis on job creation with the necessary focus on digitalization. Consider the five most salient features of today’s digital landscape. 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