Bhaskar Chakravorti, Ajay Bhalla, and Ravi Chaturvedi discuss this question in their latest article in Harvard Business Review
Now more than ever, digital capabilities are essential to ensure a country’s growth and economic resilience. But how do different economies compare as far as the current state and ongoing momentum of their digital development? And how have these factors impacted their experiences during the pandemic?
Bhaskar Chakravorti, Fletcher Dean of Global Business, Ajay Bhalla, Mastercard’s President of Cyber and Intelligence Solutions, and Ravi Chaturvedi, Director of Research at Digital Planet and the IBGC, share key insights from the latest edition of their Digital Intelligence Index. The research report offers a comprehensive analysis of 90 economies based on 160 key indicators of digital development and segments the world’s economies into four distinct zones: Stand Out, Stall Out, Break Out, and Watch Out.
In their latest article in Harvard Business Review, Chakravorti, Bhalla, and Chaturvedi describe the key priorities for policymakers in each of these four groups, discuss how this analysis has — or hasn’t — correlated with countries’ economic performance over the last year, and provide several high-level insights around how the most successful countries are pursuing digital evolution.
While every country is unique and there are no one-size-fits-all solutions, this analysis provides a useful framework for policymakers to better understand their own level of digital development, and explore opportunities for further growth.
So what does it take to be a Stand Out economy? While every case is different, Digital Planet’s analysis suggests that the most successful of these countries prioritized:
- Expanding adoption of digital consumer tools (e-commerce, digital payments, entertainment, etc.)
- Attracting, training, and retaining digital talent
- Fostering digital entrepreneurial ventures
- Providing fast, universal, terrestrial (e.g. fiber optics) and mobile broadband internet access
- Specializing in the export of digital goods, services, or media
- Coordinating innovation between universities, businesses, and digital authorities
Based on analyses from the Digital Intelligence Index, the team found that successful Break Out economies prioritized:
- Improving mobile internet access, affordability, and quality to foster more widespread adoption
- Strengthening institutional environments and developing digital regulations
- Generating investment in digital enterprises, funding digital R&D, training digital talent, and leveraging digital applications to create jobs
- Taking steps to reduce inequities in access to digital tools across gender, class, ethnicity, and geographic boundaries (though many access gaps still remain)
Stall Out economies are characterized by those that have mature digital landscapes, but which exhibit less momentum for continued advancement. In part, this is likely to due to the natural slowing of growth that accompanies maturity. Many in this zone have also intentionally chosen to slow their growth in order to ensure that they grow responsibly and inclusively. To regain momentum (without sacrificing these values), Stall Out Economies should prioritize:
- Safeguarding against “digital plateaus” by continuing to invest in robust institutional foundations, regulatory environments, and capital markets to support ongoing innovation
- Continuing to use policy tools and regulation to ensure inclusive access to digital capabilities and to protect all consumers from privacy violations, cyberattacks, and other threats (while still keeping data accessible for new digital applications)
- Attracting, training, and retaining professionals with digital skills, often through reforming immigration policies
- Identifying new technological niches and fostering environments friendly to innovation in those areas
- Making long-term investments to address basic infrastructure gaps
- Creating an institutional environment that supports safe, widespread consumer adoption of digital products and services, especially those that enable productivity and job creation
- Promoting initiatives (particularly through public-private cooperation) that invest in digital access to historically disadvantaged segments of the population
- Promoting applications that solve pressing needs and could therefore act as catalysts for widespread adoption of digital tools (such as mobile payment platforms)
