Digital technologies are poised to change the future of work. Despite uncertainties regarding its reforms agenda, the country is seen as pivotal to Europe’s regeneration. The United Kingdom is still included in the 2020 DESI, and EU averages are calculated for 28 Member States. 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. Harvard Business Publishing is an affiliate of Harvard Business School. Alongside business innovation, digitalization – the development of digital innovations – is one of the most important business trends for the future of the economy. 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? 15. Despite some technical hurdles, working from home is on the rise here to an extent thought impossible a couple of months ago. 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. 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. 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. 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. 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. 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. 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. Break Out countries have the potential to become the Stand Out countries of the future, with China, Malaysia, Bolivia, Kenya, and Russia leading the pack. Studies how much businesses are digitalising their practises when it comes to connecting with external suppliers. To use them you only need a citizen’s ID card. While much has changed even since 2015, there are roadblocks on the journey that have remained surprisingly resilient. Most of the developing world is overwhelmingly cash-dependent; in Malaysia, Peru, and Egypt, only 1% of transactions are cashless. Digital Economy and Society Index 2020 (DESI) reports are based on 2019 data. 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. 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. The least digitally advanced countries must allocate limited resources wisely. 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. 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. BloombergNEF’s 2019 ranking reveals the industrial digitalization status of 40 countries and ranks them using metrics in investment, governance, workforce and technology. Also, digitalization should be used extensively, especially in situations of lockdown and switching from classical teaching to online systems (Bejinaru, 2019; Tsui & Dragicevic, 2018). Within the digital entrepreneurship sector, IPOs and exits have not been keeping pace with the record sums of capital being pumped in. The picture that summarizes the state of the digital planet will evolve when it does. Clearly, the most exciting region in the world, digitally speaking, is Asia, with China and Malaysia as exemplars. Many might be tempted to answer that the US does, but the answer actually depends on what aspect of “digital” you’re looking at. The Most Tech-Savvy Governments. 3 Established: countries… They have deep resources for innovation with the ability to accelerate the penetration and adoption of digital products. But no one should panic, because jobs are … Let us look at each of our three broad index categories in turn. Companies need to develop digital strategies and focus on what are the key success factors of digital transformation. Countries in the Stall Out zone can put their maturity, scale, and network effects to use to reinvent themselves and grow. Editor’s note: Every ranking or index is just one way to analyze and compare companies or places, based on a specific methodology and data set. Of these, 54 percent are based in the United States to date, with 23 percent in China, and 10 percent in Europe. The overall DAI is the simple average of three sub-indexes. 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. Access to electricity is considered a foundational layer of infrastructure. In the meantime, the UK’s digital momentum is stronger than its EU peers. As for the U.S., it is at risk of falling into the Stall Out zone. 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. In conclusion, the world’s digital economy stands at a threshold where opportunity and risk stand in balance. A major hurdle is the continuing stickiness of cash, which has not been displaced by digital alternatives despite myriad options. Also, there is a difference in the number of the Arab countries included in these indices. Some of these countries demonstrate remarkable creativity in the face of severe infrastructural gaps, institutional constraints, and low sophistication of consumer demand. The DiGiX finds Luxemburg as the highest-placed country in the world when it comes to digitization. This growth rate, which we refer to as momentum, is a lead indicator of a country’s future digital potential and prospects. country GDPs. Top in the ranking are Luxembourg, the U.S. the Netherlands, Singapore and Hong Kong, while Malaysia, South Africa, Chile … 3 Infrastructure in the EDAI refers to IT infrastructure, including measures of mobile and fixed line connections. Dubai, in particular, is rapidly emerging as a world class digital nation. With products that rely on network effects, these players enjoy economies of scale and dominant market share. 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. 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. Below, we present a short summary of recent research in this area. Some countries are at the border of multiple zones. digital maturity of the country. India, with many policy-led pushes for digitalization, including a Digital India campaign and initiatives to give a boost to digital payments, ought to pay attention to the overall low level of evolution in the country. 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. Copyright © 2020 Harvard Business School Publishing. 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. 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. A high score indicates active digital efforts across industry and government, backed by the capital, skills and technology to scale further. The country benefits from a large market, a strong knowledge ecosystem and a … In parallel, countries in Latin America can learn some lessons from smaller, faster-moving countries, such as Colombia and Bolivia. Broader, more systemic changes are needed to boost digital evolution in this type of environment. 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.. Chart. The DAI is a worldwide index that measures countries’ digital adoption across three dimensions of the economy: people, government, and business. The UAE. Which countries are the most digitally competitive? a country’s digital readiness. Click on the countries displayed within the map below to see the country-specific reports on digital performance, or click in the list. The score is based on five components: Regulation, Knowledge, Connectivity, Infrastructure and Size. Each of these five features contains both upsides and challenges. The various reports present the data in areas like connectivity, digital skills, digital public services, and more. Moving past these “digital plateaus” will require a conscious effort by these countries to reinvent themselves, to bet on a rising digital technology in which it has leadership, and to eliminate impediments to innovation. Automation, big data, and artificial intelligence enabled by the application of digital technologies could affect 50% of the world economy. This evolution is the outcome of an interplay among four drivers, with about 170 indicators across them (see sidebar). Stall Out countries may look to Stand Out countries for lessons in sustaining innovation-led growth. Each sub-index comprises technologies … Digital technology is reshaping life and business around the globe, but the pace of change varies widely from one country to the next. access to a mobile phone than to a toilet. The DESI was re-calculated for previous years to reflect the changes in the choice of indicators and corrections made to the underlying data. 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. DOES digitalization lead to a renaissance? The countries investigated in the process represent over 70% of the global population and around 5.5 billion people. This is the third edition of our ranking (a score from 0 = worst to 100 = best). This has different implications for what advanced economies and developing economies ought to prioritize: innovation for the former and institutions for the latter. Leaders of the digital world: US vs China. Based on their stock prices on July 6, 2017, Apple, Alphabet, Microsoft, Amazon, and Facebook were the five most valuable companies in the world. Countries on this chart fall into four zones: Stand Out, Stall Out, Break Out, Watch Out. country on digital startups. What factors explain these patterns, and how do they vary across regions? We identified many hotspots around the world where these changes are happening rapidly and other spots where momentum has slowed. The high momentum of Break Out countries and their significant headroom for growth would make them highly attractive to investors. 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. Digital commerce must still contend with cash. Country Outlook . 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. 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. 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. There are more mobile connections than people on the planet, and more people have access to a mobile phone than to a toilet. The index indicates that countries are clustered as Digitally Constrained,Emerging, Transitional or Advanced, with varying degree of contribution of digitization to economic growth. Tools . Five months after the country demonetized 86% of its currency, cash withdrawals were actually 0.6% higher than a year earlier. the country of advanced technologies, the Global Connectivity Index (GCI-C) devel- oped by Huawei [ 9 ] is worth mentioning. Over the past year, all EU countries improved their digital performance. Let us look at each of our three broad index categories in turn. 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