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Winners & losers in the world digital economy, Part I

Relative developmental pace of digital infrastructures

Our CEO/Creative Director, Kyle Mani, recently posted the Digital Evolution Index graphic, below, from the Fletcher School at Tufts University on OWDT social media.

It integrates four primary divers to highlight the relative developmental pace of digital infrastructures in 50 countries—

  • Supply-side factors (e.g., Internet access and transactions infrastructure);
  • Demand-side factors (e.g., consumer trends + financial/ Internet/social media talent);
  • Innovations (e.g., entrepreneurial and technological vitality + friendly/unfriendly startup environments);
  • Institutions (e.g., governmental promotion or lack thereof in building the digital ecosystem).

STAND OUT nations, at the forefront digital capacity/speed, are holding their own (e.g. Shanghai). –Others are beginning to STALL OUT (e.g., the Netherlands and several other First World economies). Because Stall Out countries are often beset with aging, shrinking populations–they will need to import more talented, young immigrants to improve both innovation and increase demand for products and services. BREAK OUT countries, by comparison, are advancing rapidly (e.g., Malaysia). –Finally WATCH OUT countries have potential but can’t seem to advance because of inflexible institutions and other impediments (this includes, e.g., Egypt, Kenya and even some European countries like Portugal and Hungary).

COUNTRIES ARE BUILDING DIGITAL CAPACITY AT UNEVEN RATES

A group of 50 countries reveals four main areas of digital readiness.

HOW COUNTRIES SCORED ACROSS FOUR FACTORS ON THE DIGITAL EVOLUTION INDEX (OUT OF 100)

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RATE OF CHANGE IN DIGITAL EVOLUTION FROM 2008-2013

SOURCE:DIGITAL EVOLUTION INDEX, THE FLETCHER SCHOOL AT TUFTS UNIVERSITY, HBR.ORG

Consistent with their healthy economic growth, many countries in Asia and Latin America are moving forward rapidly in building their digital economies. So why is Singapore still advancing rapidly while The Netherlands falls behind? Since 2008, Singapore has continued to nurture public-private partnerships. By comparison, The Netherlands instituted austerity measures in 2010 that reduced such investment. Clearly, even when government revenue is down, cutting that kind of investment is unwise. The same could be said for the U.S. lack of investment in its physical infrastructure.

What’s at stake?

Those nations breaking out of Second World status will benefit greatly by investing in digital tech infrastructure. Cash-only economies like Egypt and Nigeria need to facilitate online payment systems. Emerging middle classes in those countries will grow more rapidly as their digital business options expand–and help those living in poverty advance beyond subsistence living. This creates great potential for unprecedented investment in Third World economies

In Part II of this article, I’ll discuss the major tech corporations now laying the groundwork for providing Internet access to the 5 billion people on the planet who are still offline.

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