Over the past year, all EU countries improved their digital performance. 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. 15. Countries in the Stall Out zone can put their maturity, scale, and network effects to use to reinvent themselves and grow. But no one should panic, because jobs are … How do countries accelerate their digital momentum. Stand Out countries are highly digitally advanced and exhibit high momentum. 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. A high score indicates active digital efforts across industry and government, backed by the capital, skills and technology to scale further. Break Out countries are low-scoring in their current states of digitalization but are evolving rapidly. 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. Politics, regulations, and levels of economic development play a major role in shaping the digital industry and its market attractiveness. 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. There are more mobile connections than people on the planet, and more people have access to a mobile phone than to a toilet. Yet in this short period, digital technologies have upended our world. Five months after the country demonetized 86% of its currency, cash withdrawals were actually 0.6% higher than a year earlier. 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. Of these, 54 percent are based in the United States to date, with 23 percent in China, and 10 percent in Europe. 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. However, sustaining consistently high momentum over time is challenging, as innovation-led expansions are often lumpy phenomena. Retail e-commerce sales worldwide are expected to hit $4 trillion by 2020, about double of where it is now. With products that rely on network effects, these players enjoy economies of scale and dominant market share. Where quantified, agreement or strong agreement to indicators were found to be between 35 and 65 percent. The index analyzes the economies of 99 different countries. 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. This will enable Africa to create a niche within the global economy. 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. Moreover, how strongly each of them is felt varies depending on where you are in the world. Within the digital entrepreneurship sector, IPOs and exits have not been keeping pace with the record sums of capital being pumped in. of such companies whose businesses have attained the $1 billion of value benchmark—so-called unicorns. access to a mobile phone than to a toilet. Consider the five most salient features of today’s digital landscape. 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. Each sub-index comprises technologies … In our 2018 ranking, the US, Germany and the Netherlands are the top 3 digitagile countries across the world. Which actors are the prime drivers of competitiveness: public or private sector? The IMD World Digital Competitiveness Ranking 2019 results . 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? Publication Finder ... "Digitalization index of banks in Russia in 2020, by stage of customer journey*." The DAI is a worldwide index that measures countries’ digital adoption across three dimensions of the economy: people, government, and business. First, digital assets. Stall Out countries may look to Stand Out countries for lessons in sustaining innovation-led growth. the country of advanced technologies, the Global Connectivity Index (GCI-C) devel- oped by Huawei [ 9 ] is worth mentioning. The US on top of the digitagile world. Also, digitalization should be used extensively, especially in situations of lockdown and switching from classical teaching to online systems (Bejinaru, 2019; Tsui & Dragicevic, 2018). Some of these countries demonstrate remarkable creativity in the face of severe infrastructural gaps, institutional constraints, and low sophistication of consumer demand. What are the patterns of digital evolution around the world? The United Kingdom is still included in the 2020 DESI, and EU averages are calculated for 28 Member States. One reason for the advanced state of digitalisation digitalization in the Baltic country is to be found in its low population density. 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. In the meantime, the UK’s digital momentum is stronger than its EU peers. 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. Digital technology is reshaping life and business around the globe, but the pace of change varies widely from one country to the next. Companies need to develop digital strategies and focus on what are the key success factors of digital transformation. Because the distance to local authorities is usually considerable, Estonians began working on digital solutions very early on. 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. Their rise to prominence is evidenced in the number . Which countries are the most digitally competitive? 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. Access to electricity is considered a foundational layer of infrastructure. The country benefits from a large market, a strong knowledge ecosystem and a … Click on the countries displayed within the map below to see the country-specific reports on digital performance, or click in the list. Based on their stock prices on July 6, 2017, Apple, Alphabet, Microsoft, Amazon, and Facebook were the five most valuable companies in the world. DESI area report: Research and Development ICT. 3 Established: countries… 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. 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. Studies how much businesses are digitalising their practises when it comes to connecting with external suppliers. The least digitally advanced countries must allocate limited resources wisely. Broader, more systemic changes are needed to boost digital evolution in this type of environment. The United States, Germany and the Netherlands make the top three of the 2018 EDI ranking. Digital commerce must still contend with cash. 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. 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. Today , authorities and companies offer over 3,000 online services. 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. 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. Copyright © 2020 Harvard Business School Publishing. Around the world, digital access itself is far from uniform: Barely 50% of the world’s population has access to the internet today. 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. Production phase. We identified many hotspots around the world where these changes are happening rapidly and other spots where momentum has slowed. The picture that summarizes the state of the digital planet will evolve when it does. Depending on a country’s level of digital evolution and economic advancement, there are different drivers that are primarily responsible for digital momentum. Most of the developing world is overwhelmingly cash-dependent; in Malaysia, Peru, and Egypt, only 1% of transactions are cashless. This growth rate, which we refer to as momentum, is a lead indicator of a country’s future digital potential and prospects. 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. The overall DAI is the simple average of three sub-indexes. To use them you only need a citizen’s ID card. Tools . In our 2018 ranking, the US, Germany and the Netherlands are the top 3 digitagile countries across the world. When Unionbank decided to take this journey to digitalization in 2016, Malaya Business Insight was there. Two years on, depending on where we live, we continue to move at different speeds toward the digital planet. 4. Business and Government Investment Building digital infrastructure and … 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. As for the U.S., it is at risk of falling into the Stall Out zone. The country’s ability to use digital solutions is essential in the fast-paced technologically advancing global world. Clearly, the most exciting region in the world, digitally speaking, is Asia, with China and Malaysia as exemplars. First, more digital innovators should recognize that public policy is essential to the success of the digital economy. Chart. To stay ahead, these countries need to keep their innovation engines in top gear and generate new demand, failing which they risk stalling out. Despite some technical hurdles, working from home is on the rise here to an extent thought impossible a couple of months ago. 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. 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. Also, there is a difference in the number of the Arab countries included in these indices. They have deep resources for innovation with the ability to accelerate the penetration and adoption of digital products. a country’s digital readiness. The IMD World Digital Competitiveness Ranking 2019 results . Digital technologies are poised to change the future of work. Let us look at each of our three broad index categories in turn. Digital Economy and Society Index 2020 (DESI) reports are based on 2019 data. 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 can act as a drag on any initiative. Every country and multinational needs to be sensitive to the map of digital momentum so that they can tailor their strategies accordingly. DOES digitalization lead to a renaissance? In conclusion, the world’s digital economy stands at a threshold where opportunity and risk stand in balance. 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. 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. Alongside business innovation, digitalization – the development of digital innovations – is one of the most important business trends for the future of the economy. United United Kingdom remains in second place followed by Hong Kong (3rd), United States (4th) and Netherlands (5th. This is the third edition of our ranking (a score from 0 = worst to 100 = best). BloombergNEF’s 2019 ranking reveals the industrial digitalization status of 40 countries and ranks them using metrics in investment, governance, workforce and technology. Digital markets are uneven. 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. The countries investigated in the process represent over 70% of the global population and around 5.5 billion people. Enabling internet access on the mobile phone provides the biggest bang for the buck. Digital technology is widespread and spreading fast. Which country leads the world in digital? Dubai, in particular, is rapidly emerging as a world class digital nation. 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. country on digital startups. Let us look at each of our three broad index categories in turn. Some countries are at the border of multiple zones. Despite uncertainties regarding its reforms agenda, the country is seen as pivotal to Europe’s regeneration. As for human capital, the people who are most digitally oriented, with the capacity to meet the challenges that the new technologies present, are the Finns. 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. 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. A major hurdle is the continuing stickiness of cash, which has not been displaced by digital alternatives despite myriad options. The Most Tech-Savvy Governments. 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). Many might be tempted to answer that the US does, but the answer actually depends on what aspect of “digital” you’re looking at. When it comes to Internet penetration, the US has much higher rates than in the EU, 88 percent compared with 71 percent. The DESI was re-calculated for previous years to reflect the changes in the choice of indicators and corrections made to the underlying data. 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 UAE. The Digital Economy and Society Index (DESI), Integration of Digital Technology by Enterprises, Digital Economy and Society Index Report - the telecoms chapters. 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. This evolution is the outcome of an interplay among four drivers, with about 170 indicators across them (see sidebar). Furthermore, we placed a focus on whether two structural features of developing countries, 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. The index indicates that countries are clustered as Digitally Constrained,Emerging, Transitional or Advanced, with varying degree of contribution of digitization to economic growth. 3 Infrastructure in the EDAI refers to IT infrastructure, including measures of mobile and fixed line connections. 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. 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. The DiGiX finds Luxemburg as the highest-placed country in the world when it comes to digitization. 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. Country size is also a factor. 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. 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 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. In 2013 85% of the world’s transactions were in cash. 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). Key economic and social indicators. The pandemic has boosted networking in Germany. We always urge you to read the methodology carefully. 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. 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. 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. 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. Leaders of the digital world: US vs China. The drivers and key components we analyzed are as follows: We also examined the competitiveness of a country’s digital economy along two dimensions: its current state of digital evolution, as determined by the interplay of the four drivers mentioned above, and its pace of digital evolution over time, as measured by the growth rate of a country’s digital evolution score over the period 2008 – 2015. … Countries on this chart fall into four zones: Stand Out, Stall Out, Break Out, Watch Out. country GDPs. 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. The aggregate business digitalization index (BDI) in Russia was measured at 50 points. 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. 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. 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. While much has changed even since 2015, there are roadblocks on the journey that have remained surprisingly resilient. 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 … Below, we present a short summary of recent research in this area. Stall Out countries enjoy a high state of digital advancement while exhibiting slowing momentum. In parallel, countries in Latin America can learn some lessons from smaller, faster-moving countries, such as Colombia and Bolivia. 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. Where momentum is picking up, and where it’s stalling out. The most valuable non-American company, 7th overall, was China’s e-commerce giant, Alibaba Group. This has different implications for what advanced economies and developing economies ought to prioritize: innovation for the former and institutions for the latter. 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. Country Outlook . Past year, all EU countries improved their digital performance the map of digital products compared with percent. 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