Study reveals the digital divide between Internet haves and have-nots is widening, with a number of emerging markets failing to implement the basic reforms that could boost economic development.
INSEAD, the leading international business school, in partnership with the World Economic Forum and the Samuel Curtis Johnson Graduate School of Management at Cornell University, today revealed the findings of the Global Information Technology Report 2015 (GITR). The latest annual survey of information and communications technologies (ICTs) indicates that rather than being bridged, the gap between the top-performing economies and the bottom of the table is widening.
This year’s top spot in the Network Readiness Index (NRI) is taken by Singapore (1), shifting Finland (2) to second place after two years in the lead. Up six places since 2014, Japan (10) makes a remarked entrance in the Top 10 and is the only Asian country with Singapore to feature at the top of the table this year. Europe and the US show consistency or progress: Sweden (3), the Netherlands (4), Norway (5), Switzerland (6) and the United States (7) all retain last year’s rankings, while the United Kingdom (8) and Luxembourg (9) both move up, Luxembourg rising two places to enter the Top 10.
While high income stands as an obvious common factor among the leaders, "the main reason why these countries stay at the top can be found in their education. Clearly, they produce the human capital that is needed to take advantage of digital innovation, not just in ICT education, but also in basic education," says Bruno Lanvin, Executive Director of the European Competitiveness Initiative (IECI) and of Global Indices projects at INSEAD and co-editor of the report, which warns that too many organisations still lack the skills to leverage ICTs.
Pinpointing the persistence in the world’s digital divide, this year’s report reveals that the gap between higher and lower-income countries is in fact widening. In the past three years, the level of improvement seen among the top 10% is double that of the bottom 10%. "This is of great concern, given the relentless pace of technological development," says Soumitra Dutta, Anne and Elmer Lindseth Dean at the Samuel Curtis Johnson Graduate School of Management at Cornell University and co-editor of the report. "Less developed nations risk being left behind and concrete actions are needed to urgently address this." Data also indicate that the lower-middle-income and low-income countries lag further back than before, fuelling fears for growing digital poverty.
In the middle of the spectrum, the BRICS nations show disappointing performances, with the Russian Federation (41) leading the BRICS rankings and the only country to rise (+9). Although China (62) remains stable, South Africa (75), Brazil (84) and India drop five, 15 and six places respectively.
For Bruno Lanvin, "the example of the BRICS is not unique: many other countries that have improved their ranking over the past decade or so are now facing stagnation or regression. This is partly down to persisting divides within countries between rural and urban areas and across income groups, which is resulting in large portions of the population being left out of the digital economy."
At the lower end of the scale, the report notes that reforms and ICT liberalisation have benefitted a number of the world’s least developed nations – citing Burkina Faso, Cape Verde, Kenya, Lesotho, Madagascar, Mauritius, Nigeria, Tanzania and Uganda.
The great digital divider is access to the Internet, however. Only 39% of the global population benefits from it; in low-income countries, the figure falls to under 10%. "The ICT revolution will not be carried over voice or SMS," said Thierry Geiger, Senior Economist, World Economic Forum, and co-author of the report. "Without better access to affordable Internet, a huge proportion of the global population will continue to live in digital poverty, missing out on the enormous social and economic benefits that the ICTs represent."
In view of these findings, the report concludes that ICTs are neither ubiquitous nor spreading as fast as some believe and stresses the need for policymakers to connect rural areas of developing countries to broadband. "Broadband is an income multiplier. To ensure that ICT benefits everyone, broadband adoption needs to increase overall, but especially for low-income populations. Unconnected countries and people are being left behind," notes Dr Robert Pepper, Vice President of Global Technology Policy at Cisco, which supports the report.
While reasserting that government policy to establish sound business environments is fundamental, the GITR points out that bridging the digital gap involves encouraging people to focus on local needs. "Emerging markets need to ensure a sustainable supply of local and relevant digital content if they are to give more people reasons to go online," notes Bahjat El-Darwiche, Partner at Strategy&, head of Communications, Media and Technology in the Middle East. "More and better local content will help to provide jobs and higher incomes to millions of people in emerging markets."
The theme of this 14th edition of the GITR is ‘ICTs for Inclusive Growth’. It features 10 chapters from leading experts that propose compelling solutions to allow the ICT revolution to benefit all.
Since 2001, the GITR produces an annual assessment of the digital ecosystems of developed and developing countries. In 2015, 143 countries are listed, representing 98.4% of world GDP. Each is ranked via the Networked Readiness Index (NRI) in relation to their ability to implement and capitalise on ICTs for greater competitiveness and wellbeing.
Designed to offer important insights to policymakers, the report highlights the broad as well as the subtle ways in which ICTs shape global development. Stressing the need for high-quality regulatory and business environments, ICT readiness (measured by affordability, skills and infrastructure) and a society’s preparedness for ICT use, it seeks to gauge the impact of ICTs as key drivers for development and inclusive growth.
