Wef gitr report_2013
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This document is the Insight Report for The Global Information Technology Report 2013. It examines how information and communication technologies (ICTs) can promote economic growth and job creation in a hyperconnected world. The report is published by the World Economic Forum and INSEAD and edited by Beñat Bilbao-Osorio, Soumitra Dutta, and Bruno Lanvin. It contains nine chapters that analyze different aspects of how countries and organizations can maximize the economic and social benefits of ICT adoption.
![1.1: The Networked Readiness Index 2013
f The affordability pillar is computed as follows: the average of the
normalized scores of indicators 4.01 mobile cellular tariffs and
4.02 Fixed broadband Internet tariffs is multiplied by a competition
factor, the value of which is derived from indicator 4.03 Internet
and telephony sectors competition index. It corresponds to the
score achieved by an economy on this indicator normalized
on a scale from 0.75 (worst) to 1.00 (best), using the min-max
transformation described above. A normalized score of 0.75
is assigned to an economy with a competition index score of
0, which means that a monopolistic situation prevails in the 19
categories of ICT services considered. A normalized score of
1.00 is assigned to an economy where all 19 categories are fully
liberalized. Where data are missing for indicator 4.03 (i.e., Puerto
Rico and Timor-Leste), the score on the affordability pillar, which
is simply the average of the normalized scores of indicators 4.01
and 4.02, is used. For example, Tanzania obtains a score of 1.00
on the competition index. This translates into a competition factor
of 0.875, which multiplies 2.944, corresponding to the average
of Tanzania’s normalized scores on the two tariff measures.
Tanzania’s score on the affordability pillar therefore is 2.576
(130th). The competition index score for Taiwan, China, was
derived from national sources.
g For indicators 7.04 and 7.05, the average of the respective scores
is used in the computation of the NRI. For Albania, Ecuador,
Georgia, Rwanda, and Sri Lanka, these two indicators are
replaced by an indicator derived from the 2010 and 2011 editions
of the Executive Opinion Survey. The associated question was: “To
what extent do companies in your country use the Internet for their
business activities? (e.g., buying and selling goods, interacting with
customers and suppliers) [1 = not at all; 7 = extensively].” Results
for these countries are presented in The Global Information
Technology Report 2012 (p.371) available at www.weforum.org/gitr.
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![CHAPTER 1.5 Sustainable, long-term growth in the European Union
(EU) is vital to the overall health of the world economy.
Fiber Broadband: A For a developed region such as the European Union, a
significant proportion of growth is likely to come from
Foundation for Social and knowledge-based industries, underpinned by information
and communication technologies (ICTs). Indeed, the
Economic Growth European Commission’s Europe 2020 vision describes
such a future for the region in the Digital Agenda.1
SEAN WILLIAMS The foundation for digital prosperity is fiber
BT broadband Internet access, often referred to as superfast
broadband. In describing the economic benefits of
Internet adoption, a report for the McKinsey Global
Institute says: “[broadband] infrastructure, the backbone
of the entire Internet ecosystem, is an irreplaceable
prerequisite. It creates the platforms upon which users,
and organizations experience the Internet, and upon
which entrepreneurs and businesses innovate.”2
Indeed, superfast broadband access has the
potential to transform local economies, businesses,
households, and public services. It will help improve the
performance of existing firms, enable new businesses
to emerge, and encourage flexible working patterns.
Superfast broadband is key to opening global markets
to regions previously denied access, providing new job
opportunities, and boosting productivity.
Statistical evidence of the positive economic impact
of broadband infrastructure has existed for some years.
According to the Broadband Commission, a joint
body of the United Nations Educational, Scientific and
Cultural Organization (UNESCO) and the International
Telecommunication Union (ITU), every 10 percent
increase in broadband penetration results in additional
growth of 1.3 percent in national gross domestic
product (GDP).3 Similarly, in a 2011 study across 33
countries in the Organisation for Economic Co-operation
and Development (OECD) by Chalmers University of
Technology, consultancy Arthur D. Little and ICT vendor
Ericsson found that doubling the broadband speed for
an economy increases GDP by 0.3 percent.4
New research now available from Regeneris
Consulting provides even greater detail about the
potential economic impact of superfast broadband in
urban and—crucially—less-developed rural areas, as
demonstrated later in this chapter.5
Investment in fiber broadband also has the potential
to deliver social goods, for example by improving
public service levels in areas such as health, education,
e-government, and democratic participation at lower
cost than would be available offline. Evidence for social
goods is anecdotal rather than statistical.
The idea that broadband infrastructure can drive
economic development has been championed for some
time. Indeed, broadband infrastructure, coupled with
a functioning and fair market for access and services,
is central to Europe 2020 and the Digital Agenda for
Europe;6 it underlies similar strategies adopted by
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![2.3: E-Government in Latin America
from which to learn and a foundation on which to build a became one of the first strategic documents related to
plan for the next steps to accelerate progress. the knowledge-based society in the region, emphasizing
Although the efforts made so far are commendable, the purpose of the Agenda and saying in part:
and those who have led from either the political or the
managerial sphere deserve the highest recognition from The National Government has designed the
their citizens, we live in a global world where frequently Agenda for Connectivity as a state policy,
one needs to run in order to remain in the same place. which seeks to expand the use of information
Indexes, global studies, and rankings related to the technology in Colombia and thereby increase
use of ICTs in the public sector indicate that, although the competitiveness of the productive sector,
most of Latin America trotted toward a knowledge- modernize public institutions and socialize
based society, some countries in Asia and Europe were access to information [author’s translation].
galloping.
In the second half of the first decade of this During President Pastrana’s administration, the
century, a group of Latin American countries followed Presidential Program for ICT Development and the
in the footsteps of those pioneers of e-government to Colombian Government Portal were also launched.
emerge as leaders and show the region that, although In the early years of President Alvaro Uribe’s
in the discipline of e-government there is no recipe administration (2002–10), the focus was on bringing
that guarantees positive results, there are some good some institutional order to the management of
practices that seem to lead to success. We consider knowledge-based society initiatives and providing human
three of these countries in the sections that follow: and financial resources for the Agenda for Connectivity.
Colombia, Uruguay, and Panama. By this time, the Agenda had become state policy.
The government under President Uribe maintained
THE PATH TAKEN BY COLOMBIA the Agenda and strengthened its link to the National
Colombia had been one of the close followers of the Development Plan 2003–2006, which validated and
pioneers, but it lost traction during the transition from reaffirmed it, making it a driving force for fundamental
President Pastrana to President Uribe. It is now regaining elements of socioeconomic progress such as education,
that traction under the leadership of President Santos. health, safety, and local development.
Colombia took its first steps in e-government in an In addition, President Uribe showed his commitment
encouraging fashion. First, the country undertook an to the advancement of ICTs in the country with the
exercise of reflection and strategizing at a high political signing of two decrees: Decree 3816 of 2003 established
level that resulted in the document CONPES 3072 the Intersectoral Council for Policies and Management
(National Council for Economic and Social Policy),7 of Information for Public Administration. This decree
which—as early as 1999—included an introduction with became a key element for the approval of resources for
the following paragraph, remarkable for its time because the Agenda for Connectivity as well as for the adoption
of its vision of the far-reaching nature of ICTs: of interoperability standards within the Colombian
government. Decree 1151, issued in 2008, launched
Information Technologies are tools that an updated view of e-government in Colombia—the
enable the development of a new economy Government Online Strategy—along with a set of goals
[E-conomía], the construction of a more to be achieved by all branches of government, as well as
modern and efficient National State, universal a timetable and a mechanism for monitoring them.
access to information, and the acquisition and The arrival of President Juan Manuel Santos gave
effective use of knowledge—all these building a definite boost to Colombia in its progress in the use
blocks to the development of a modern society of ICTs in the country as a whole and in the government
[author’s translation]. in particular. Building on the accumulated experience
and giving continuity to the team that had been working
The Internet had not yet exploded, smart phones in the Colombian Government Online Strategy for
had not even been imagined, and the founder of years, the Ministry of Information and Communication
Facebook was still in high school when the government Technologies launched the Vive Digital (Live Digital)
of Colombia talked about the e-economy, the connection strategy.8 In just two years, Vive Digital achieved
of ICTs, the construction of a modern state, and the remarkable results,9 making Colombia the winner of the
acquisition and use of knowledge. Fourteen years ago, well-known Global System for Mobile Communications
this was quite a vision for policymakers in Latin America. Association (GSMA) Government Leadership Award
This strategic document, which incorporates the given during the Mobile World Congress in Barcelona in
first Colombian Agenda for Connectivity as an annex, February 2012.
was followed a few months later by Presidential Directive In this environment, Colombia’s rise in the most
02, signed by President Andres Pastrana. This directive widely used e-government rankings—such as the
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Wef gitr report_2013
- 1. Insight Report The Global Information Technology Report 2013 Growth and Jobs in a Hyperconnected World Beñat Bilbao-Osorio, Soumitra Dutta, and Bruno Lanvin, Editors
- 3. Insight Report The Global Information Technology Report 2013 Growth and Jobs in a Hyperconnected World Beñat Bilbao-Osorio, World Economic Forum Soumitra Dutta, Cornell University Bruno Lanvin, INSEAD Editors @ 2013 World Economic Forum
- 4. The Global Information Technology Report 2013 is a World Economic Forum project within the framework of the World Economic Geneva Forum’s Global Competitiveness and Benchmarking Network and the Industry Partnership Programme for Copyright © 2013 Information and Communication Technologies. It is the by the World Economic Forum and INSEAD result of a collaboration between the World Economic Forum and INSEAD. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, Professor Klaus Schwab in any form or by any means, electronic, mechanical, Executive Chairman photocopying, or otherwise without the prior permission of the World Economic Forum. Børge Brende Managing Director, Government Relations ISBN-10: 92-95044-77-0 and Constituents Engagement ISBN-13: 978-92-95044-77-7 Robert Greenhill This report is printed on paper suitable for recycling and Managing Director, Chief Business Officer made from fully managed and sustained forest sources. Printed and bound in Switzerland by SRO-Kundig. EDITORS Visit The Global Information Technology Report page at Beñat Bilbao-Osorio, Associate Director and www.weforum.org/gitr. Senior Economist, Global Competitiveness and Benchmarking Network, World Economic Forum Soumitra Dutta, Dean, Samuel Curtis Johnson We thank Hope Steele for her excellent editing work and Graduate School of Management, Cornell University Neil Weinberg for his superb graphic design and layout. Bruno Lanvin, Executive Director, eLab, INSEAD The terms country and nation as used in this report do not in all cases refer to a territorial entity that is a state GLOBAL COMPETITIVENESS AND BENCHMARKING NETWORK as understood by international law and practice. The Jennifer Blanke, Chief Economist, Head terms cover well-defined, geographically self-contained of the Global Competitiveness and economic areas that may not be states but for which Benchmarking Network statistical data are maintained on a separate and Ciara Browne, Associate Director independent basis. Gemma Corrigan, Intern Roberto Crotti, Quantitative Economist Margareta Drzeniek Hanouz, Director, Lead Economist, Head of Competitiveness Research Thierry Geiger, Associate Director, Economist Tania Gutknecht, Community Manager Caroline Ko, Junior Economist Cecilia Serin, Team Coordinator INFORMATION TECHNOLOGY AND TELECOMMUNICATIONS INDUSTRIES TEAM Alan Marcus, Senior Director, Head of Information and Communication Technologies Industries William Hoffman, Associate Director, Head of Issue Community Danil Kerimi, Associate Director, Head of Government Community Elena Kvochko, Project Manager, Information Technology Industry Derek O’Halloran, Head of Information Technology Industry Alexandra Shaw, Team Coordinator, Information Technology Industry Bruce Weinelt, Director, Head of Telecommunication Industry @ 2013 World Economic Forum
- 5. Contents Preface v 1.6 The Economic Impact of Next-Generation 77 Børge Brende and Robert Greenhill (World Economic Forum) Mobile Services: How 3G Connections and the Use of Mobile Data Impact GDP Growth Chris Williams, Davide Strusani, David Vincent, and Foreword vii David Kovo (Deloitte LLP) Cesare Mainardi (Booz & Company) 1.7 Better Measurements for Realizing the 81 Foreword ix Full Potential of Health Information Technologies John Chambers (Cisco Systems) Elettra Ronchi (OECD), Julia Adler-Milstein and Genna R. Cohen (University of Michigan), and Laura P. Winn and Executive Summary xi Ashish K. Jha (Harvard School of Public Health) Beñat Bilbao-Osorio (World Economic Forum), Soumitra Dutta (Cornell University), and Bruno Lanvin (INSEAD) 1.8 Re-Establishing the European Union’s 93 Competitiveness with the Next Wave of Investment in Telecommunications The Networked Readiness Index Rankings xxi Scott Beardsley, Luis Enriquez, Wim Torfs, Ferry Grijpink, Stagg Newman, Sergio Sandoval, and Malin Strandell-Jansson (McKinsey & Company) Part 1: The Current Networked Readiness for Growth and Jobs 1.9 The Big Opportunity for Inclusive Growth 101 Mikael Hagström and Ian Manocha (SAS Institute Inc.) 1.1 The Networked Readiness Index 2013: 3 Benchmarking ICT Uptake and Support for Growth and Jobs in a Hyperconnected World Part 2: Case Studies of Leveraging ICTs Beñat Bilbao-Osorio (World Economic Forum), for Competitiveness and Well-Being Soumitra Dutta (Cornell University), Thierry Geiger (World Economic Forum), and Bruno Lanvin (INSEAD) 2.1 Colombia’s Digital Agenda: Successes 111 and the Challenges Ahead 1.2 Digitization for Economic Growth and 35 Diego Molano Vega (Ministry of Information Job Creation and Communication Technologies of Colombia) Karim Sabbagh, Roman Friedrich, Bahjat El-Darwiche, Milind Singh, and Alex Koster (Booz & Company) 2.2 The Metamorphosis to a Knowledge-Based 119 Society: Rwanda 1.3 Convergent Objectives, Divergent Strategies: 43 Alex Ntale (Rwanda ICT Chamber and Private Sector A Taxonomy of National Broadband and Federation), Atsushi Yamanaka (Rwanda Development ICT Plans Board-ICT/Japan International Cooperation Agency), and Robert Pepper and John Garrity (Cisco Systems) Didier Nkurikiyimfura (Ministry of Youth and ICT of Rwanda) 1.4 The Importance of National Policy Leadership 53 2.3 E-Government in Latin America: A Review 127 Phillippa Biggs and Anna Polomska (ITU/UNESCO of the Success in Colombia, Uruguay, and Panama Broadband Commission for Digital Development) Miguel A. Porrúa (Organization of American States) 1.5 Fiber Broadband: A Foundation for Social 67 and Economic Growth Sean Williams (BT) The Global Information Technology Report Report 2013 | iii @ 2013 World Economic Forum
- 6. Contents Part 3: Country/Economy Profiles How to Read the Country/Economy Profiles.................................139 Index of Countries/Economies.......................................................141 Country/Economy Profiles.............................................................142 Part 4: Data Tables How to Read the Data Tables........................................................289 Index of Data Tables......................................................................291 Data Tables...................................................................................293 Technical Notes and Sources 361 About the Authors 367 List of Partner Institutes 375 Acknowledgments 383 iv | The Global Information Technology Report Report 2013 @ 2013 World Economic Forum
- 7. Preface BØRGE BRENDE AND ROBERT GREENHILL World Economic Forum The 12th edition of The Global Information Technology actors—individuals, businesses, and governments. Report (GITR) is being released at a time of cautious Over time, the series has become one of the most- optimism after a long period of economic uncertainty respected studies of its kind. It is extensively used by that has transformed the global economic outlook. While policymakers and relevant stakeholders as a unique tool uncertainty in the euro zone and the risk of political to identify strengths on which to build and weaknesses deadlock in the United States still persist and could derail that need to be addressed by national strategies for the tentative economic recovery in developed economies, enhanced networked readiness. the risk of a financial and economic meltdown with The Global Information Technology Report 2013 unprecedented consequences seems more remote than it features the latest results of the NRI, offering an overview did a year ago. Overall, developed economies are striving of the current state of ICT readiness in the world. This to return to higher levels of competitiveness while fighting year’s coverage includes a record number of 144 the stubbornly high levels of unemployment, especially economies, accounting for over 98 percent of global among youth; at the same time, developing and emerging GDP. A number of essays on the role of ICTs to promote economies are focusing on innovation as a prerequisite growth and jobs in an increasingly hyperconnected to sustain the high economic growth rates they have world, as well as policy case studies on developing experienced in the past decade and leapfrog toward ICTs, are featured in the Report, together with a higher levels of economic and social prosperity. comprehensive data section—including detailed profiles Against this backdrop, the role that information for each economy covered and data tables with global and communication technologies (ICTs) can play to rankings for the NRI’s 54 indicators. support economic growth and the creation of high- We would like to convey our sincere gratitude to the quality jobs has never drawn so much attention and industry and international organizations’ experts who research. There had been some initial concerns about contributed outstanding chapters exploring the links the risk, in some developed economies, that ICTs between ICTs and economic growth and job creation, could accelerate the delocalization of certain economic as well as to policy analysts for providing their valuable activities toward developing countries. But the benefits insights in the policy case studies. of ICTs are now widely recognized everywhere as an We especially wish to thank the editors of the important source of efficiency gains for companies that Report, Soumitra Dutta at the Samuel Curtis Johnson will allow them to optimize their production function and Graduate School of Management at Cornell University, liberalize resources toward other productive investments. Bruno Lanvin at INSEAD, and Beñat Bilbao-Osorio Moreover, ICTs are also increasingly recognized as a at the World Economic Forum, for their leadership in key source of innovation that can generate increased this project, together with the other members of the economic growth and new sources of high-value-added GITR team: Thierry Geiger, Danil Kerimi, and Elena jobs. This ability to innovate is essential in the current Kvochko. Appreciation also goes to Alan Marcus, information revolution that is transforming economic and Senior Director and Head of the Information Technology social transactions in our societies. and Communication Industries team, and Jennifer The GITR series has been published by the World Blanke, Chief Economist and Head of the Global Economic Forum in partnership with INSEAD since Competitiveness and Benchmarking Network, as well 2002. The Report has accompanied and monitored as her team: Ciara Browne, Gemma Corrigan, Roberto ICT advances over the last decade as well as raising Crotti, Margareta Drzeniek Hanouz, Tania Gutknecht, awareness of the importance of ICT diffusion and Caroline Ko, and Cecilia Serin. Last but not least, we usage for long-term competitiveness and societal would like to express our gratitude to our network of well-being. Through the lens of the Networked 167 Partner Institutes around the world and to all the Readiness Index (NRI), the driving factors and impacts business executives who participated in our Executive of networked readiness and ICT leveraging have been Opinion Survey. Without their valuable input, the identified, highlighting the joint responsibility of all social production of this Report would not have been possible. The Global Information Technology Report Report 2013 | v @ 2013 World Economic Forum
- 8. @ 2013 World Economic Forum
- 9. Foreword CESARE MAINARDI Chief Executive Officer, Booz & Company Ever since Adam Smith first proposed the theory of improves; some jobs get replaced by technologies; and absolute advantage enjoyed by a country in producing lower-value-added, labor-intensive jobs go overseas a good or service, policymakers have sought to build to emerging markets where labor is cheaper. On a and maintain such an advantage in key sectors of their sector-by-sector basis, you see the same effect in economies. What has become increasingly clear over highly digitized industries such as financial services and the past 12 years that the World Economic Forum and manufacturing. INSEAD have been publishing this Global Information Thus no universal prescriptions are available for Technology Report is the role that information realizing the full socioeconomic benefits of digitization— communication technologies (ICTs), and specifically the right formula will vary by country and industry. But digitization, plays in the potential development and there is no question that the benefits are there to be maintenance of absolute advantage. realized, and they are substantial for the foresighted and Digitization—the mass adoption of connected digital sure-footed. services by consumers, enterprises, and governments— The lesson for policymakers and national leaders is is far more than a disruptive wave washing over isolated clear: having laid the necessary groundwork by building industries. We have long since recognized that reality. out broadband infrastructure and ensuring access, it is Digitization is a fundamental driver of economic growth now time to differentiate around distinctive opportunities and job creation the world over—in both developed and and capabilities. Governments have a role to play as emerging markets. And that is not hollow rhetoric—it digital market makers. That means making deliberate is confirmed by econometric analysis that Booz & choices about what sectors furnish the best opportunity Company has conducted to quantify the actual impact for that absolute advantage Adam Smith described and of digitization on a country’s economic output (GDP) focusing on them. It means understanding the tradeoffs and employment. In fact, we have created a Digitization between job creation and productivity that increasing Index that scores a country’s digitization level on a scale digitization brings, and creating mechanisms to offset of 0 to 100. This level-setter allows us to go beyond the potential job losses. Finally, it means understanding anecdotal evidence of the transformational impact of what capabilities you must bring as a policymaker to ICTs and actually measure that impact on economic and advancing your country’s digitization agenda. Do you social factors on a comparative basis. need to play the role of direct developer, financier, or The headline is powerful: despite the continued facilitator? There are successful models of all three sluggishness of economies across the globe, digitization capability sets in practice today around the world. has boosted world economic output by nearly US$200 You have only to open your eyes and apply the right billion over the past two years and has created 6 million capabilities lens to chart the right path forward. This jobs. Specifically, our analysis reveals that an increase year’s Global Information Technology Report will of 10 percent in a country’s digitization score drives a illuminate the way. 0.75 percent growth in its GDP per capita. That same 10 percent boost in digitization leads to a 1.02 percent drop in a state’s unemployment rate. These benefits grow as a country moves along the digitization continuum—in other words, increased digitization yields improving returns. Although the net effect of digitization is positive, as you begin analyzing the data by country and sector, certain tradeoffs become apparent. For example, advanced-stage economies in North America and Western Europe, for a number of reasons, realize fewer employment benefits than developing economies as their digitization level increases. Their productivity The Global Information Technology Report Report 2013 | vii @ 2013 World Economic Forum
- 10. @ 2013 World Economic Forum
- 11. Foreword JOHN CHAMBERS Chairman and Chief Executive Officer, Cisco Systems It has been almost 30 years since the connections that sparked one of the greatest technological transformations in history were made, creating an enormous global market for information and communication technologies (ICTs) while laying the foundation for networked readiness. Today the Internet and the applications and the services it supports touch our lives every day. Just as Cisco was at the forefront of network development in the past, today we envision a future where everything is connected and amazing things are possible. More than 99 percent of things in the physical world are not linked to the Internet. Yet. But as the world transitions into what we call the Internet of Everything (IoE)—the intelligent connection of people, processes, data, and things—only the networked readiness of countries will dictate where the IoE will take hold and who will reap its benefits. Given the economic and social potential of this market transition, we are very pleased to again collaborate with the World Economic Forum and INSEAD in the production of this year’s Global Information Technology Report and its Networked Readiness Index. The IoE and intelligent networking will impact all sectors, creating opportunities for people, businesses, and countries. An intelligent network will be the driver of the next round of innovation, productivity enhancement, and employment. Developing the IoE will require close collaboration among stakeholders in industry, customers, academia, and government. Products and services will be developed commercially, customers will dictate what succeeds in the market place, academia can aid in research and design, and governments can play a role in maintaining a vibrant and competitive business environment where innovation will flourish. This year’s Global Information Technology Report, focusing on ICTs for growth and jobs, places a spotlight on the role that technology can have in economic growth and employment. As highlighted in the research that follows, high-speed broadband networks have demonstrated a positive impact on short- and long-term employment, and we believe the next wave of Internet development will further advance the growth effects of the network. The Global Information Technology Report Report 2013 | ix @ 2013 World Economic Forum
- 12. @ 2013 World Economic Forum
- 13. Executive Summary BEÑAT BILBAO-OSORIO, World Economic Forum SOUMITRA DUTTA , Cornell University BRUNO LANVIN, INSEAD When The Global Information Technology Report (GITR) the world needs to collectively address environmental and the Networked Readiness Index (NRI) were created and social challenges to ensure a more sustainable some 12 years ago, the attention of decision makers development path and a better quality of life for its and investors was on adopting business and financial people. strategies that would allow them to develop in the On the “push” side, technological progress context of a fast-moving but nascent Internet economy. continues at a relentless speed. The growing availability Over more than a decade, the NRI has provided of technology has empowered citizens of both developed decision leaders with a useful conceptual framework to and emerging economies with fairly good access to the evaluate the impact of information and communications digital world. The rise of cloud computing has reduced technologies (ICTs) at a global level, and to benchmark the competitive differentials in technology availability the ICT readiness and the usage of their economies. across larger and smaller firms. Low entry barriers in the Today, the world has undergone massive changes: digital space have sparked creativity and given rise to a the Internet bubble has come and gone, and emerging class of young entrepreneurs around the world. It is clear countries such as China and India have become that ICTs offer higher benefit-to-cost ratios in all sectors prominent global users and providers of ICT equipment of production, while simultaneously offering new ways to and services. Struggling to emerge from the financial create value by better and more efficiently organizing the crisis, developed economies are striving to return to use of natural, financial, and human resources. higher levels of growth and competitiveness while Numerous studies have been presented in the fighting stubbornly high unemployment rates, especially literature on the connections between ICTs on the among their youth. Both emerging and developed one hand, and development and growth on the other. economies are focusing on innovation, competing Although the first analyses of the economic impact globally for talent, resources, and market shares. of fixed telephone density on economic growth were Information flows and networks have spread across conducted more than three decades ago,1 such studies borders in ways that could not be imagined before the have proliferated in recent years. Despite the ubiquity onset of the Internet, the global adoption of mobile of ICTs in society and business, such research has telephony and social networks, and the rapid growth of not been easy. For one thing, the pace of adoption of broadband. Business models have been redefined, the many technologies (broadband, mobile, etc.) has been workplace has been redesigned, small startups have fast and recent—thus limiting the validity of longitudinal evolved into large companies, and entire functions of studies and making it difficult for data collection society (education, health, security, privacy) are being agencies to keep pace with the definition and collection rethought. of appropriate metrics. Also, it remains challenging to isolate the impact of ICTs as their economic impacts ICTs, COMPETITIVENESS, GROWTH, AND JOBS: A have often occurred when combined with other broad COMPLEX RELATIONSHIP social and business changes. The links between ICTs (their tools, services, and models) For more than a decade, the NRI has included on the one hand and the unwavering importance of aspects of how ICTs are transforming the economy competitiveness, growth, and jobs on the other have and society. Among the expressions of transformation never before been the subject of so much attention and is the development of new skills that are important in concern. This is hardly surprising when one considers knowledge-based, information-rich societies and that the “pull” of technology: developed economies need are crucial for employment. Despite the fact that ICTs are to reinvent themselves to maintain or restore their becoming increasingly universal, the question of access competitiveness, retain or regain market shares, and and usage remains important—especially for developing create jobs; emerging and developing economies are countries, given their need to narrow the digital divide. seeking ways to improve productivity and find new The NRI includes features related to access and usage sources of growth through new technologies. Finally, that cover not only affordable ICT infrastructure but The Global Information Technology Report Report 2013 | xi @ 2013 World Economic Forum
- 14. Executive Summary also digital resources, including software and skills. In • the friendliness of a country’s market and regulatory addition, the NRI includes proxies to assessing some of framework in supporting high levels of ICT uptake; the economic and social impacts accruing from ICTs. • the degree of a society’s preparation to make good Thus, the Index facilitates the identification of areas use of an affordable ICT infrastructure; where policy intervention—through investment, smart regulation, and/or incentives—could boost the impact of • the efforts of the main social agents—that is, ICTs on development and growth. individuals, business, and government—to increase their capacity to use ICTs as well as their actual use PART 1: THE CURRENT NETWORKED READINESS of ICTs in day-to-day activities; and LANDSCAPE • the broad economic and social impacts accruing Part 1 presents the latest findings of the NRI, offering from ICTs and the transformation of a country a comprehensive assessment of the present state toward an ICT- and technology-savvy economy of networked readiness in the world. Furthermore, a and society. number of expert contributions inquiring into the relation between ICTs and growth and jobs in the current As in previous editions, the NRI is composed of a economic and digital context are also included. These mixture of quantitative data collected by international relate to (1) the role of digitization for economic growth organizations—such as International Telecommunication and job creation; (2) the description of a taxonomy of Union (ITU), other UN agencies, the Organisation for national broadband and ICT plans; (3) the importance of Economic Co-operation and Development (OECD), and national policy leadership; (4) the role of fiber broadband the World Bank—and survey data from the Executive for economic and social growth; (5) the economic impact Opinion Survey (the Survey), conducted annually by of next-generation mobile technologies; (6) the need for the Forum in each of the economies covered by the better measurement to realize the potential of health Report. The NRI 2013 covers a record number of 144 information technologies; (7) the role of ICTs for Europe economies, accounting for over 98 percent of world GDP. to regain its competitiveness, and (8) the potential of ICTs In terms of the results (see the Networked to support social inclusion. Readiness Index Rankings provided on page xix), two groups of economies dominate the NRI: Northern Insight from the NRI 2013 on the world’s networked European economies and the so-called Asian Tigers. readiness Among the Northern European countries, four out of the Given the potential high returns that ICTs can provide five Nordic economies featured in the NRI—Finland, in transforming a nation’s economy and its citizens’ Sweden, Norway, and Denmark (in rank order)—continue well-being, assessing ICT developments has been the to feature in the top 10. Iceland, the last of the Nordics, object of much academic and policy attention in the past is not too far behind, at 17th place. The performance decade. Several organizations have made significant of this group in terms of readiness is particularly efforts to measure and benchmark ICT deployment outstanding. All five Nordics feature in the top 10 of this and uptake, but few have aimed at equally assessing subindex. Within this subindex, on the infrastructure the returns that ICTs can actually provide to both the and digital content pillar, four countries occupy the top economy and society. Although data availability is positions. As highlighted in the previous edition and still scarce in terms of ICT impacts, policy interest in in this Report, the gap between those countries and measuring ICTs has shifted from measuring ICT access the ones in the Southern and Eastern parts of Europe to measuring ICT impacts. is profound. A second group of economies that posts Last year, after two years of research and a remarkable performance are the Asian Tigers: consultations with ICT practitioners, policy and industry Singapore, Taiwan (China), the Republic of Korea, and experts, and academia, a new subindex on ICT impacts Hong Kong SAR. All boast outstanding business and that aimed at holistically assessing the way that innovation environments that are consistently ranked countries go about leveraging ICTs and benefiting from among the most conducive in the world. The Tigers also them in terms of enhanced competitiveness and well- stand out for their governments’ leadership in promoting being has been introduced in the NRI. This evolution the digital agenda, and the impact of ICTs on society ensures that the NRI framework remains at the forefront tends to be larger in these economies. of ICT measurement. As one of the most authoritative Finland (1st) reaches the top of the NRI rankings assessments of its kind, it has been adopted by several for the first time, thanks to improvements across the governments as a valuable tool for informing their board. The country shows progress on two-thirds of competitiveness and policy agendas. the 54 indicators of the NRI and posts a very consistent As a result, the framework gauges: performance across all categories of the NRI. Singapore xii | The Global Information Technology Report Report 2013 @ 2013 World Economic Forum
- 15. Executive Summary remains 2nd overall, while slightly improving its score. Asian Tigers—on the planet are next to some of the The extreme efficiency and business friendliness of least-connected ones. Nowhere else does the regional its institutional framework, strong intellectual property digital divide run as deeply as it does in Asia. Regardless protection, intense competition, and high university of their position on the development ladder, all Asian enrollment rate lead to these outstanding outcomes. economies have much to gain from increased networked Sweden (3rd) maintains its score, but declines two readiness. It will allow populations of the least-advanced positions and abandons the top spot to Finland. Despite countries to gain access to much-needed basic services, this slight decline in rankings, the country undeniably improved government transparency and efficiency, remains one of the few truly knowledge-based and—for the most advanced, many of which suffer from economies of this world. anemic economic growth—it will contribute to boosting Up three notches, the United Kingdom (7th) their innovation capacity. The NRI reveals that in the posts the biggest rank improvement among the top case of Asia’s best-performing economies, governments 10 economies. The country offers one of the most typically lead the digital effort, unlike in Europe. At the conducive environments for ICT development. In heart of Asia, and representative of its immense diversity, particular, it offers a sound and conducive political and the Association of Southeast Asian Nations (ASEAN) regulatory environment (7th). The country also boasts is fairly dynamic. Led by Singapore, all eight ASEAN high levels of ICT adoption. ICTs are pervasive among members covered by the NRI improve their overall score the population, businesses, and the government. Down and a majority progress in the rankings, albeit in some one, the United States slips to 9th place despite a cases—such as Cambodia and the Philippines—from a performance essentially unchanged from the previous low base. year. This constitutes the country’s worst showing since Digitally connecting the hemisphere remains one the first edition of the GITR in 2001, in which it ranked of the key challenges for Latin America and the 1st, although changes to the methodology and in the Caribbean, as recognized during the Sixth Summit of composition of the NRI over time cause the results not to the Americas, which took place in Colombia in April be strictly comparable. The country still possesses many 2012.4 While several countries have made remarkable strengths, however, which have contributed to making it improvements that are clearly reflected in important the world’s innovation powerhouse for decades. gains in the scores and rankings of the NRI—including Several European countries continue to lead Panama, Mexico, Colombia, and El Salvador—overall, the rankings, showcasing their strong efforts and Latin American and the Caribbean still suffers from commitment to fully develop and leverage ICTs to a serious lag that prevents it from fully leveraging the boost their competitiveness and the well-being of potential of ICT to boost the regional productivity. The their citizens. Within the European Union (EU), while social and, most remarkably, economic impacts accruing stark intra-regional disparities persist, it is worth noting from ICTs remain low in comparison with other regions that the divergence across Member States in the despite government-led efforts to develop and upgrade NRI is significantly narrower than it is in the Global ICT infrastructure and also despite governments’ Competitiveness Index,2 the most comprehensive increasing use of the Internet to communicate and analysis for measuring the set of policies, institutions, interact with individuals and the business community. and factors that drive the productivity of an economy. Weaknesses in the political and regulatory environment, This reflects the longstanding efforts of the European the existence of large segments of the population with a Union to narrow the digital divide in Europe and build low skill base, and poor development of the innovation an internal digital market, as corroborated by the launch system are all factors hindering the potential that ICT of a new Digital Agenda for Europe,3 one of the seven developments could have on the regional economy. flagship initiatives of the European Commission’s Europe Sub-Saharan Africa has continued to make 2020 Strategy for growth and jobs for the present significant efforts to build its ICT infrastructure, as decade. reflected by important improvements in developing its Within the Commonwealth of Independent States, broadband infrastructure and the expansion of its mobile several countries have fully recognized the potential network coverage. As a result, ICT usage, while still of ICTs to leapfrog and diversify their economies, and very low, has picked up slightly, as seen especially by important progress has been recorded since last year. an increase in the number of Internet users and also by Asia is home to some of the world’s wealthiest, the continued commitment of some governments in the most successful economies in the world and also to region to expand the number of available online services. some of its poorest. Unsurprisingly, a similarly profound Despite this positive trend, the stubbornly high sharp diversity characterizes Asia’s digital landscape, thus digital divide from more advanced economies, notably making it impossible to draw a uniform picture of the in terms of ICT-driven economic and social impacts, region. The most digitized and innovative nations—the persists. A still-costly access to ICT infrastructure, The Global Information Technology Report Report 2013 | xiii @ 2013 World Economic Forum
- 16. Executive Summary relatively low levels of skills with low educational Policymakers can harness these varying effects of attainments, and unfavorable business conditions for digitization through three main measures that go beyond entrepreneurship and innovation are hindering the their current roles of setting policy and regulations. First, region’s capacity to fully leverage the potential of the they should create digitization plans for targeted sectors increasingly available ICT infrastructure. As a result, only in which they wish to maximize the impact of digitization. two countries—Mauritius (55th) and South Africa (70th)— Second, they should encourage the development of the are positioned in the top half of the rankings, while nine necessary capabilities and enablers to achieve these out of the bottom ten belong to the region. digitization plans. Finally, policymakers should work The Middle East and North Africa region boasts in concert with industry, consumers, and government one of the most diverse performances in the world. agencies to establish an inclusive ICT ecosystem that On the one hand, Israel and several Gulf Cooperation encourages greater uptake and usage of digital services. Council states have sharply improved their overall performances and have continued their investments to Convergent Objectives, Divergent Strategies: A make ICTs one of the key national industries that attempt Taxonomy of National Broadband and ICT Plans to diversify and transform their economies. On the other In Chapter 1.3, Robert Pepper and John Garrity from hand, several North African and Levant nations have Cisco Systems analyze the wide range of formal either fallen—or stagnated, in the best cases—in their broadband policies around the world. A critical question efforts to leverage ICTs as part of their economic and now is whether the divergence in policy packages will social transformation process toward more knowledge- result in significant differences in the efficacy of plans. intensive activities and open societies. To begin this research and establish a foundation for understanding the global landscape of national Digitization for Economic Growth and Job Creation: broadband and ICT plans, this chapter reviews Regional and Industry Perspectives plans around the world and presents a taxonomy Chapter 1.2, contributed by Karim Sabbagh, Roman for classification. The authors first detail the existing Friedrich, Bahjat El-Darwiche, Milind Singh, and Alex relationship among broadband, economic growth, Koster at Booz & Company, analyses the rise of and employment. Next they analyze a cross-section digitization—the mass adoption of connected digital of national plans, their objectives, and their policy services by consumers, enterprises, and governments— components. Subsequently they propose a taxonomy as a key economic driver that accelerates growth examining the degree of broadband supply- and and facilitates job creation. In the current context demand-side emphasis. This taxonomy establishes a of a sluggish global economy, digitization can play common language that can guide governments through an important role in assisting policymakers to spur the development of national broadband plans and serves economic growth and employment. Booz & Company’s as a baseline for evaluating the factors of success for econometric analysis estimates that, despite the implemented plans. unfavorable global economic climate, digitization has They find that as countries around the world have provided a US$193 billion boost to world economic developed national plans to accelerate broadband output and created 6 million jobs globally over the past adoption, the plans vary by both goals and policy two years.5 recommendations. Their taxonomy of broad-based, However, the impact of digitization by country supply-driven, demand-driven, and emergent plans and by sector is uneven. Developed economies enjoy provides a clear method for categorizing national higher economic growth benefits by a factor of almost broadband and ICT plans on the breadth of their policy 25 percent, although they tend to lag behind emerging options; the classification also provides a starting point economies in job creation by a similar margin. The for the review and comparison of national plans. Further, main reason for the differing effects of digitization it can aid policymakers in countries with strategic plans lies in the economic structures of developed and underway as they work to increase broadband adoption. emerging economies. Developed countries rely chiefly on domestic consumption, which makes nontradable The Importance of National Policy Leadership sectors important. Across developed economies, Chapter 1.4, contributed by Phillippa Biggs and Anna digitization improves productivity and has a measurable Polomska at the ITU/UNESCO Broadband Commission effect on growth. However, the result can be job losses for Digital Development, evaluates recent growth in because lower-skilled, lower-value-added work is sent national broadband plans and the importance of national abroad to emerging markets where labor is cheaper. By policy leadership for driving the rollout of broadband contrast, emerging markets are more export-oriented networks, services, and applications. In light of recent and driven by tradable sectors. They tend to gain more evidence for strong positive externalities to investments from digitization’s effect on employment than from its in broadband networks, rapid technological evolution, influence on growth. and a changing institutional environment, the chapter xiv | The Global Information Technology Report Report 2013 @ 2013 World Economic Forum
- 17. Executive Summary explores the changing role of policymakers in helping to from Cisco Systems, the impact of increasing usage of facilitate and set national policy. mobile data per 3G connection. This study finds that: A growing number of countries now recognize • For a given level of mobile penetration, a 10 percent the importance of policy leadership and a clear cross- increase in 3G penetration increases GDP per capita sectoral vision to maximize the economic and social growth by 0.15 percentage points. returns to ICTs, as shown by strong growth in the number of national broadband plans. This chapter • A doubling of mobile data use is associated with an provides a brief overview of the growth in these plans increase in the GDP per capita growth rate of 0.5 and the key characteristics of good ones, with reference percentage points. to several examples: the US, UK, and Polish national broadband plans. These results suggest that policy activity should focus on increasing 3G penetration and mobile data Fiber Broadband: A Foundation for Social and consumption. This focus should include making Economic Growth spectrum available for mobile broadband and In Chapter 1.5, Sean Williams from BT highlights the fact encouraging the substitution of basic mobile services that, as the foundation for knowledge- and ICT-based with more-advanced 3G connections. jobs, fiber broadband has the potential to drive social and economic growth and help create jobs. As Europe, Better Measurements for Realizing the Full Potential and the wider developed world, look to emerge from the of Health Information Technologies recent financial crisis and downturn, such growth will be Healthcare has become an increasingly dominant topic vital. The issue is not whether fiber broadband can help of discussion in recent years because of rising costs drive social and economic growth, but how the vision and the need to improve the efficiency and quality of of coverage as close as possible to 100 percent can be healthcare delivery. Although ICTs cannot, alone, provide achieved. the solution for overcoming these issues, they are seen This chapter aims to advance the debate in two by many governments as potentially playing a significant ways: first, by reviewing recent independent research role as enablers of the changes required in health from Regeneris, an economic development consulting systems. firm, detailing the economic impact of high-speed In light of this, a critical question now facing broadband infrastructure on environments as diverse as policymakers is how to realize the full potential of capital cities and economically deprived rural regions. these technologies, particularly since the challenges to And second, by articulating technical and market achieving widespread ICT adoption and use are proving solutions that are fit for purpose in the current economic daunting. climate. In Chapter 1.7, Elettra Ronchi from the Organisation The chapter recommends policy responses that for Economic Co-operation and Development (OECD), national governments and regional authorities should Julia Adler-Milstein and Genna R. Cohen from the implement to put these solutions into action. University of Michigan, and Laura P. Winn and Ashish K. Jha from the Harvard School of Public Health argue The Economic Impact of Next-Generation Mobile that countries have much to gain by combining their Services: How 3G Connections and the Use of efforts and sharing the burden of developing comparable Mobile Data Impact GDP Growth measures for evidence-based policy in this sector. Risk, In Chapter 1.6, Chris Williams, Davide Strusani, David delay, and cost can be minimized by learning from good Vincent, and David Kovo from Deloitte LLP argue that international practices. the mobile telecommunication sector continues to offer The chapter reviews what is currently known unprecedented opportunities for economic growth in about the state of implementation of ICTs in the health both developing and developed markets, and that mobile sector across OECD countries and the benefits that communication services have become an essential part can be realized from these technologies, including the of how economies work and function. opportunities for economic growth. It then discusses As technology develops, mobile telephony has the efforts, led by the OECD, to develop a common set the potential to impact economic development further of indicators, describing the policy motivation for this through the provision of high-value 3G and 4G data work, the process followed, the current status of these services accessed via smartphones, tablets, and measures, and the key remaining challenges. dongles that deliver mobile data services to businesses and consumers. For the first time, applying econometric analysis, the authors studiy the impact, on GDP per capita growth, of consumers substituting a 2G connection with a 3G connection and, based on data The Global Information Technology Report Report 2013 | xv @ 2013 World Economic Forum
- 18. Executive Summary Re-Establishing the European Union’s other essential assets—oil and water, for instance—it Competitiveness with the Next Wave of Investment exists in abundance and can help reduce conflict and in Telecommunications tension instead of proliferating discord. In Chapter 1.8, Scott Beardsley, Luis Enriquez, Wim In Chapter 1.9, Mikael Hagström and Ian Manocha Torfs, Ferry Grijpink, Stagg Newman, Sergio Sandoval, from SAS Institute Inc. identify how big data and and Malin Strandell-Jansson from McKinsey & Company analytics can help energize the economy through argue that Europe’s fixed and mobile telecommunication efficiency, innovation and creative gains, by: networks need a massive upgrade to satisfy burgeoning • using big data to stimulate new ways of doing consumer demand for new Internet services. McKinsey business; & Company estimates that modernizing the EU-15’s fixed telecommunication infrastructure to give all households • using linguistic-based analytics to formulate policies access to high-speed broadband will take €200 to €250 and target action plans to tackle unemployment billion, while revamping Europe’s mobile infrastructure to before problems manifest themselves; offer 4G services to 95 percent of the region’s population • using big data and analytics to match people to jobs would cost another €50 to €70 billion. and jobs to people more proactively—the chapter Unless they make investments on this scale, draws on experiences at the national and state Europe’s economies risk losing technology leadership government level, and from working with financial across the telecommunication value chain to Asia and institutions; and the United States. High-speed network investment is far • putting the tools and methods of analytics into ahead in both regions. For instance, around 64 percent the hands of an existing workforce to industrialize of 4G mobile subscriptions worldwide are in North the service economy (the sleeping giant), much America, 33 percent in Asia Pacific, but only 3 percent as Henry Ford’s innovation industrialized factory in Europe. Value-added by the US telecommunication production. industry grew in real terms by 18 percent from 2007 to 2010, but only 7 percent in Europe. The chapter analyzes advances in ICTs and Downward pressure on both wholesale and current applications—such as how a major retail retail prices is choking growth and profitability among organization comes to understand what customers Europe’s telecommunication players, hindering them want (what products, where, and when) and the flow from meeting their investment challenge. This chapter of this information back down their supply chain to offers four ideas for shaping a region-wide policy manufacturers, based on demand. Such approaches framework that could lift those constraints: can help ensure we have qualified labor in the right • Allow a reduction in the number of fixed and location at the right time. mobile operators. Europe’s consumers could be better served by an industry with fewer players that PART 2: CASE STUDIES OF LEVERAGING ICTS FOR are strong enough to make large investments but COMPETITIVENESS AND WELL-BEING sufficiently plentiful to ensure vibrant competition. Part 2 presents deep-dive studies of selected national experiences of leveraging ICTs or developing the • Allow more pricing flexibility, so operators sector, showcasing the main challenges faced and get a proportionate return from customers who the articulation of strategies to overcome them. In this generate the most data traffic and take up the most edition, the cases of Colombia and Rwanda, as well as bandwidth. a comparative case study of e-government in three Latin • Restrict wholesale access regulation to a few American countries, are presented. basic services, and allow “regulatory” holidays. This would give operators a better chance of Colombia’s Digital Agenda: Successes and recouping their investments. Challenges Ahead In recent years, the ICT sector has gained importance • Release more spectrum to operators, giving them in Colombian public policy because the government has more options for extending network capacity. given priority to the development of Plan Vive Digital, which seeks to give the country a technological leap The Big Opportunity for Inclusive Growth forward that affects the economy and development The social and economic environment is changing, in a positive way, reducing poverty and increasing and the way that business and government look at the competitiveness and productivity. economy must change with it. If not, we run the risk of In Chapter 2.1, Diego Molano Vega, Minister of social exclusion and further economic slowdown. Information and Communication Technologies of Big data is a new asset class that has great Colombia, identifies the four obstacles to achieving the potential to help resurrect the global economy. Unlike xvi | The Global Information Technology Report Report 2013 @ 2013 World Economic Forum
- 19. Executive Summary widespread use of the Internet in his country: (1) people obtaining access to credit. The Global Competitiveness and businesses do not perceive the Internet as useful; Report 2012–2013 published by the World Economic (2) the costs of installing the necessary infrastructure Forum ranked Rwanda the most competitive economy in are high; (3) the state has limited resources to invest in the East Africa Community (EAC) countries and third in infrastructure; and (4) Colombians’ purchasing power is sub-Saharan Africa. Rwanda also received top ranking in limited. East Africa, and 7th in Africa among countries with active To achieve widespread Internet use, Plan Vive Digital mobile-broadband subscriptions per 100 inhabitants has defined some concrete goals for the year 2014: in 2011 in the United Nations Broadband Commission report. 1. Triple the number of municipalities connected to In many respects, this progress has come as a the information highway. The aim is to extend the result of visionary leadership and good governance infrastructure to connect 1,053 of the country’s practices that have been embraced by Rwanda’s municipalities to the national fiber-optic network. leaders. Rwanda has systematically fought corruption, 2. Connect 50 percent of micro-enterprises and which is one of the biggest impediments to development small- and medium-sized enterprises, and 50 in Africa and everywhere in the world. percent of homes to the Internet. In its Vision 2020, developed in 2000, Rwanda set out on a journey to becoming a knowledge-based 3. Increase the number of Internet connections economy. To this end, the government integrated ICTs fourfold. By 2014, we want to reach 8.8 million into its Vision 2020 to enable the country to leapfrog the Internet connections. key stages of industrialization and transform its agro- based economy into a service-oriented, information-rich Vive Digital aims to develop the country’s digital and knowledge-based one that is globally competitive. environment through its four principal components by: This integration came in the form of its national ICT 1. expanding the infrastructure, strategy and plan, commonly known as the National 2. creating new services at lower prices, Information Communication Infrastructure Plan (NICI 3. developing digital applications and contents, and Plan), which Rwanda adopted in 2000 as an approach 4. fostering ICT adoption and use. to use ICTs holistically for development. Each five-year phase (the NICI Plan includes four five-year phases The main goal is to establish a virtuous circle that spanning 20 years) characterizes this strategy and is can act as a method of feedback, in which a better aligned with the country’s overall development goals and infrastructure will allow more and better services at lower vision. prices and also stimulate the development of content, The plan, now in its third phase, has delivered applications, and demand. a number of successes. These include a nationwide fiber-optic backbone network, a state-of-the art tier 3 The Metamorphosis to a Knowledge-Based Society: data center, 96 percent cell phone/data coverage, and Rwanda multipurpose community tele-centers, to mention but a Chapter 2.2, by Alex Ntale from the Rwanda ICT few of the plan’s successes. Chamber and Private Sector Federation, Atsushi Yamanaka from the Rwanda Development Board-ICT/ E-Government in Latin America: A Review of the Japan International Cooperation Agency, and Didier Success in Colombia, Uruguay, and Panama Nkurikiyimfura from Rwanda’s Ministry of Youth and ICT, Although Latin America entered in the 21st century present Rwanda’s remarkable journey from an agrarian with abundant initiatives aimed at introducing ICTs economy to a knowledge-based one that has put the in the public sector, as evidenced by the numerous country at the forefront of the region in terms of ICTs. e-government solutions documented by the excelGov Rwanda’s economy has continued to grow at Awards, very few countries have been able to maintain comparably good rates, averaging 8 percent per annum, a rhythm of progress comparable to the most advanced despite a global recessionary environment starting in nations in the world. Colombia, Uruguay, Panama, Chile, 2008 and containing high inflationary pressures. This and occasionally Mexico and Brazil, have occupied a growth in such adverse circumstances can be attributed place among the top 50 e-government countries in the to good governance, sound fiscal discipline, and the most recognized worldwide rankings. commitment from both the public and private sector to Chapter 2.3, by Miguel A. Porrúa from the build a more equitable country. Organization of American States, looks at three Latin In the World Bank’s Doing Business 2012 report, American countries—Colombia, Uruguay, and Panama— Rwanda is ranked number one in East Africa with and charts their respective paths to achieving success in respect to starting up a business, registering property, establishing ICTs in public administration, and identifies protecting investors’ interests, enforcing contracts, and some of their common elements. The Global Information Technology Report Report 2013 | xvii @ 2013 World Economic Forum
- 20. Executive Summary For the past five years, Colombia, Uruguay, non-Survey data variables included in the NRI and Panama have seen progress that not only computation this year. becomes empirical proof of the validity of most of the recommendations made by e-government authors and NOTES practitioners but also positions these three countries as 1 Jipp 1963. a valuable reference for others around the world. 2 See World Economic Forum 2012. The three have built their success upon solid 3 See the European Commission’s Digital Agenda, available at political support that comes from the highest office, the http://ec.europa.eu/digital-agenda/. presidential, and goes to the next level, the ministerial. 4 See http://www.summit-americas.org/default_en.htm. In all three countries, presidents have shown their 5 The authors have estimated the GDP and employment impact commitment not just with words but with actions. caused by the increased digitization in most countries and aggregated to get the global impact. Presidential decrees have sent an unmistakable message to citizens and government officers alike about their unwavering commitment to bringing ICTs to the REFERENCES public administration. ITU (International Telecommunication Union). 2012. World Telecomunication/ICT Indicators Database (December 2012 Usually, an immediate consequence of that edition.) Available at http://www.itu.int/ITU-D/ict/publications/ political support is the availability of financial resources world/world.html. to undertake the main initiatives. Unfortunately, Latin Jipp, A. 1963. “Wealth of Nations and Telephone Density.” Telecommunications Journal (July): 199–201. America offers numerous examples of fruitless, well- designed e-government plans that, years after launching, Katz, R. 2012. The Impact of Broadband on the Economy: Research to Date and Policy Issues. ITU Broadband Series, April. Geneva: are still waiting to see some financial investment that ITU. Available at http://www.itu.int/ITU-D/treg/broadband/ITU-BB- would allow the projects to be implemented. Although Reports_Impact-of-Broadband-on-the-Economy.pdf. Colombia, Uruguay, and Panama could have done World Economic Forum. 2012. The Global Competitiveness Report more in providing funding to e-government initiatives, 2012–2013. Geneva: World Economic Forum. Available at www. weforum.org/gcr. they clearly understood that nice documents with no backing money produce no results. Smartly using international cooperation and public-private partnerships, they managed to allocate financial resources to their e-government plans every year. The virtuous triangle of success in these three countries adds another vertex in the careful attention paid to human resources. The systematic investment in the qualification of government officers as well as a carefully designed institutional framework allowed Colombia, Uruguay, and Panama to advance more quickly than other countries in the region. Other ingredients, such as the operational autonomy of AGESIC in Uruguay and AIG in Panama; the appropriation office in Colombia; the strong IT sector in Uruguay; the international cooperation in Panama; the implication of the private sector in Colombia; and the commitment of three, well-qualified champions in the three countries added the necessary spice to a recipe made of the best ingredients: political support, financial backing, and qualified human resources. PARTS 3 AND 4: COUNTRY/ECONOMY PROFILES AND DATA PRESENTATION Parts 3 and 4 feature comprehensive profiles for each of the 144 economies covered in this year’s Report and data tables for each of the 54 variables composing the NRI, with global rankings. Each part begins with a description of how to interpret the data provided. Technical notes and sources, included at the end of Part 4, provide additional insight and information on the definitions and sources of specific quantitative xviii | The Global Information Technology Report Report 2013 @ 2013 World Economic Forum
- 21. The Networked Readiness Index Rankings @ 2013 World Economic Forum
- 22. @ 2013 World Economic Forum
- 23. The Networked Readiness Index 2013 2012 rank 2012 rank Rank Country/Economy Score (out of 142) Rank Country/Economy Score (out of 142) 1 Finland 5.98 3 73 Ukraine 3.87 75 2 Singapore 5.96 2 74 Thailand 3.86 77 3 Sweden 5.91 1 75 Romania 3.86 67 4 Netherlands 5.81 6 76 Indonesia 3.84 80 5 Norway 5.66 7 77 Moldova 3.84 78 6 Switzerland 5.66 5 78 Bosnia and Herzegovina 3.80 84 7 United Kingdom 5.64 10 79 Seychelles 3.80 n/a 8 Denmark 5.58 4 80 Egypt 3.78 79 9 United States 5.57 8 81 Cape Verde 3.78 81 10 Taiwan, China 5.47 11 82 Armenia 3.76 94 11 Korea, Rep. 5.46 12 83 Albania 3.75 68 12 Canada 5.44 9 84 Vietnam 3.74 83 13 Germany 5.43 16 85 Jamaica 3.74 74 14 Hong Kong SAR 5.40 13 86 Philippines 3.73 86 15 Israel 5.39 20 87 Serbia 3.70 85 16 Luxembourg 5.37 21 88 Rwanda 3.68 82 17 Iceland 5.31 15 89 Morocco 3.64 91 18 Australia 5.26 17 90 Dominican Republic 3.62 87 19 Austria 5.25 19 91 Ecuador 3.58 96 20 New Zealand 5.25 14 92 Kenya 3.54 93 21 Japan 5.24 18 93 El Salvador 3.53 103 22 Estonia 5.12 24 94 Lebanon 3.53 95 23 Qatar 5.10 28 95 Ghana 3.51 97 24 Belgium 5.10 22 96 Botswana 3.50 89 25 United Arab Emirates 5.07 30 97 Liberia 3.48 n/a 26 France 5.06 23 98 Gambia, The 3.47 101 27 Ireland 5.05 25 99 Argentina 3.47 92 28 Malta 4.90 26 100 Guyana 3.45 90 29 Bahrain 4.83 27 101 Iran, Islamic Rep. 3.43 104 30 Malaysia 4.82 29 102 Guatemala 3.42 98 31 Saudi Arabia 4.82 34 103 Peru 3.39 106 32 Lithuania 4.72 31 104 Paraguay 3.37 111 33 Portugal 4.67 33 105 Pakistan 3.35 102 34 Chile 4.59 39 106 Cambodia 3.34 108 35 Cyprus 4.59 32 107 Senegal 3.33 100 36 Puerto Rico 4.55 36 108 Venezuela 3.33 107 37 Slovenia 4.53 37 109 Honduras 3.32 99 38 Spain 4.51 38 110 Uganda 3.30 110 39 Barbados 4.49 35 111 Namibia 3.29 105 40 Oman 4.48 40 112 Tajikistan 3.29 114 41 Latvia 4.43 41 113 Nigeria 3.27 112 42 Czech Republic 4.38 42 114 Bangladesh 3.22 113 43 Kazakhstan 4.32 55 115 Zambia 3.19 109 44 Hungary 4.29 43 116 Zimbabwe 3.17 124 45 Turkey 4.22 52 117 Suriname 3.13 121 46 Panama 4.22 57 118 Kyrgyz Republic 3.09 115 47 Jordan 4.20 47 119 Bolivia 3.01 127 48 Montenegro 4.20 46 120 Côte d’Ivoire 3.00 122 49 Poland 4.19 49 121 Gabon 2.97 n/a 50 Italy 4.18 48 122 Mali 2.97 126 51 Croatia 4.17 45 123 Benin 2.97 117 52 Uruguay 4.16 44 124 Cameroon 2.95 125 53 Costa Rica 4.15 58 125 Nicaragua 2.93 131 54 Russian Federation 4.13 56 126 Nepal 2.93 128 55 Mauritius 4.12 53 127 Tanzania 2.92 123 56 Azerbaijan 4.11 61 128 Ethiopia 2.85 130 57 Brunei Darussalam 4.11 54 129 Malawi 2.83 116 58 China 4.03 51 130 Burkina Faso 2.80 135 59 Mongolia 4.01 63 131 Algeria 2.78 118 60 Brazil 3.97 65 132 Libya 2.77 n/a 61 Slovak Republic 3.95 64 133 Mozambique 2.76 120 62 Kuwait 3.94 62 134 Timor-Leste 2.72 132 63 Mexico 3.93 76 135 Mauritania 2.71 139 64 Greece 3.93 59 136 Swaziland 2.69 136 65 Georgia 3.93 88 137 Madagascar 2.69 134 66 Colombia 3.91 73 138 Lesotho 2.68 133 67 Macedonia, FYR 3.89 66 139 Yemen 2.63 141 68 India 3.88 69 140 Guinea 2.61 n/a 69 Sri Lanka 3.88 71 141 Haiti 2.58 142 70 South Africa 3.87 72 142 Chad 2.53 138 71 Bulgaria 3.87 70 143 Sierra Leone 2.53 n/a 72 Trinidad and Tobago 3.87 60 144 Burundi 2.30 137 The Global Information Technology Report Report 2013 | xxi @ 2013 World Economic Forum
- 24. @ 2013 World Economic Forum
- 25. Part 1 The Current Networked Readiness for Growth and Jobs @ 2013 World Economic Forum
- 26. @ 2013 World Economic Forum
- 27. CHAPTER 1.1 When The Global Information Technology Report (GITR) and the Networked Readiness Index (NRI) were created The Networked Readiness some 12 years ago, the attention of decision makers and investors was on adopting business and financial Index 2013: Benchmarking strategies that would allow them to develop in the context of a fast-moving but nascent Internet economy. ICT Uptake and Support Over more than a decade, the NRI has provided decision makers with a useful conceptual framework to for Growth and Jobs in a evaluate the impact of information and communication Hyperconnected World technologies (ICTs) at a global level, and to benchmark the ICT readiness and the usage of their economies. Today, the world has undergone massive changes: BEÑAT BILBAO-OSORIO, World Economic Forum the Internet bubble has come and gone, and emerging SOUMITRA DUTTA , Cornell University countries such as China and India have become THIERRY GEIGER, World Economic Forum prominent global providers and users of ICT equipment BRUNO LANVIN, INSEAD and services. Struggling to emerge from the financial crisis, developed economies are striving to return to higher levels of growth and competitiveness while fighting stubbornly high unemployment rates, especially among their youth. Both emerging and developed economies are focusing on innovation, competing globally for talent, resources, and market shares. Information flows and networks have spread across borders in ways that could not be imagined before the onset of the Internet, the global adoption of mobile telephony and social networks, and the rapid growth of broadband. Business models have been redefined, the workplace has been redesigned, small startups have evolved into large companies, and entire functions of society (education, health, security, privacy) are being rethought. ICTS, COMPETITIVENESS, GROWTH, AND JOBS: A COMPLEX RELATIONSHIP The links between ICTs (their tools, services, and models) on the one hand and the unwavering importance of competitiveness, growth, and jobs on the other have never before been the subject of so much attention and concern. This is hardly surprising when one considers the “pull” of technology: developed economies need to reinvent themselves to maintain or restore their competitiveness, retain or regain market shares, and create jobs; emerging and developing economies are seeking ways to improve productivity and find new sources of growth through new technologies. Finally, the world needs to collectively address environmental and social challenges to ensure a more sustainable development path and a better quality of life for its people. On the “push” side, technological progress continues at a relentless speed. The growing availability of technology has empowered citizens of both developed and emerging economies with fairly good access to the digital world. The rise of cloud computing has reduced the competitive differentials in technology availability across larger and smaller firms. Low entry barriers in the The Global Information Technology Report 2013 | 3 @ 2013 World Economic Forum
- 28. Chapter 1.1: The Networked Readiness Index 2013 digital space have sparked creativity and given rise to a the studies thereof. Rather, it highlights the valuable class of young entrepreneurs around the world. It is clear contribution of comprehensive models of ICT usage and that ICTs offer higher benefit-to-cost ratios in all sectors impact such as the Networked Readiness Index (NRI). of production, while simultaneously offering new ways to The ITU report concludes that “this emphasizes the create value by better and more efficiently organizing the importance of implementing public policies not only in use of natural, financial, and human resources. the areas of telecommunications regulation, but also in Numerous studies have been presented in the education, economic development and planning, science literature on the connections between ICTs on the and technology and others.”3 one hand, and development and growth on the other. For more than a decade, the NRI has included Although the first analyses of the economic impact aspects of the ways ICTs are transforming the economy of fixed telephone density on economic growth were and society. Among the expressions of transformation conducted more than three decades ago,1 such studies is the development of new skills that are important in have proliferated in recent years. Despite the ubiquity knowledge-based, information-rich societies and that of ICTs in society and business, such research has are crucial for employment. Despite the fact that ICTs are not been easy. For one thing, the pace of adoption of becoming increasingly universal, the question of access many technologies (broadband, mobile, etc.) has been and usage remains important—especially for developing fast and recent—thus limiting the validity of longitudinal countries, given their need to narrow the digital divide. studies and making it difficult for data collection The NRI includes features related to access and usage agencies to keep pace with the definition and collection that cover not only affordable ICT infrastructure but of appropriate metrics. Also, it remains challenging to also digital resources, including software and skills. In isolate the impact of ICT as its economic impacts have addition, the NRI includes proxies for assessing some often occurred when combined with other broad social of the economic and social impacts accruing from ICTs. and business changes. Thus, the Index facilitates the identification of areas A recent ITU report summarizes the overall findings where policy intervention—through investment, smart from current research on the economic impact of regulation, and/or incentives—could boost the impact of broadband: ICTs on development and growth. THE NETWORKED READINESS FRAMEWORK: A First, broadband exhibits a higher contribution to HOLISTIC APPROACH TO MEASURE ICT ACCESS economic growth in countries that have a higher AND IMPACTS adoption of the technology (this could be labelled the Given the potential high returns that ICTs can provide “critical mass” or “return to scale” theory). Second, in transforming a nation’s economy and its citizens’ broadband has a stronger productivity impact in well-being, assessing ICT developments has been the sectors with high transaction costs, such as financial object of much academic and policy attention in the past services, or high labor intensity, such as tourism and decade. Several organizations have made significant lodging. Third, in less-developed regions, as postulated efforts to measure and benchmark ICT deployment in economic theory, broadband enables the adoption and uptake, but few have aimed at equally assessing of more efficient business processes and leads to the returns that ICTs can actually provide to both the capital-labour substitution and, therefore, loss of jobs economy and society. Although data availability is (this could be labelled the “productivity shock theory”). still scarce in terms of ICT impacts, policy interest in Fourth, the impact of broadband on small and medium measuring ICTs has shifted from measuring ICT access enterprises takes longer to materialize due to the need to to measuring ICT impacts. restructure the firms’ processes and labor organization Last year, after two years of research and in order to gain from adopting the technology (this is consultations with ICT practitioners, policy and industry called “accumulation of intangible capital”). Finally, the experts, and academia, the NRI introduced a new economic impact of broadband is higher when promotion subindex on ICT impacts that aimed at holistically of the technology is combined with stimulus of innovative assessing the way that countries go about leveraging businesses that are tied to new applications. In other ICTs and benefiting from them in terms of enhanced words, the impact of broadband is neither automatic nor competitiveness and well-being. This evolution ensures homogeneous across the economic system.2 that the NRI framework remains at the forefront of ICT measurement. As one of the most authoritative assessments of its kind, it has been adopted by several The concluding sentence above is important and governments as a valuable tool for informing their generally valid for most other analyses of the economic competitiveness and policy agendas. impact of ICTs on development and growth. This in The design of the framework for the calculation of no way negates either the economic impact of ICTs or the NRI (Figure 1) has been guided by five principles: 4 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 29. Chapter 1.1: The Networked Readiness Index 2013 Figure 1: The Networked Readiness Index framework DRIVERS IMPACTS Environment Infrastructure Individual Economic Affordability Skills Business Government Social Readiness Usage 1. Measuring the economic and social impacts given their need to narrow the digital divide. of ICTs is crucial. The NRI must include Even within developed nations, the need to aspects of the way ICTs are transforming both provide high-speed broadband to all segments the economy and society. In the economy of of the population has acquired importance in several countries, the ICT industry has become recent years. Some features of the NRI are increasingly important and now accounts for a related to access and usage; these cover not significant share of value-added and employment. only affordable ICT infrastructure but also digital In addition, ICTs interact closely with many other resources, including software and skills. Moreover, sectors, thus enabling innovations to accrue and ICT impacts can arise only if ICTs are widely used affecting productivity. Moreover, the impacts of by all key actors—individuals, businesses, and ICTs are also evident in the development of new governments. It is a society-wide effort. Those skills that are important in knowledge-based, actors demonstrating better preparedness and information-rich societies and that are crucial for greater interest are likely to use ICT more and employment. In society, ICTs allow citizens to more effectively, contributing to a greater impact participate more actively and steadily in social on competitiveness and development. and political debates and make the government 4. All factors interact and co-evolve within an more accountable. They improve access to better ICT ecosystem. Those societies that can count and faster services, which, in turn, yield important on better-prepared actors and an enabling benefits. environment are more likely to benefit from higher 2. An enabling environment determines the rates of ICT use and impacts. At the same time, capacity of an economy and society to benefit those societies that benefit from higher rates from the use of ICTs. The success of a country of ICT use and positive impacts will, in turn, be in leveraging ICTs and achieving the desired more likely to benefit from a push on the part of economic and social benefits will depend on its the different stakeholders to be better prepared overall environment—including market conditions, and keep improving the framework conditions the regulatory framework, and innovation- that will allow for more and stronger benefits prone conditions—to boost innovation and to accrue. As a result, a virtuous circle starts, entrepreneurship. where improvements in one area affect and drive improvements in other areas. Conversely, lags in 3. ICT readiness and usage remain key drivers one particular factor also affect the evolution of and preconditions for obtaining any impacts. the other factors. Despite the increasing availability of ICTs, the question of access and usage remains important especially for developing countries, The Global Information Technology Report 2013 | 5 @ 2013 World Economic Forum
- 30. Chapter 1.1: The Networked Readiness Index 2013 Figure 2: The Networked Readiness Index structure Subindexes Pillars Political and regulatory environment Environment Business and innovation environment Infrastructure and digital content Readiness Affordability Skills The Networked Readiness Index Individual usage Usage Business usage Government usage Economic impacts Impact Social impacts 5. The framework should provide clear policy the results of the fourth subindex, ICT impacts. These orientations and identify opportunities four subindexes are divided into 10 pillars composed of for public-private collaboration. The NRI 54 individual indicators in total, according to the following facilitates the identification of areas where structure (see also Figure 2): policy intervention—through investment including public-private partnerships, smart A. Environment subindex regulation, or the provision of incentives—could 1. Political and regulatory environment boost the impacts of ICTs. This is important 2. Business and innovation environment because the development and general uptake of ICTs depend on the capacity of a country to B. Readiness subindex provide an institutional framework with reliable 3. Infrastructure and digital content and efficient rules and regulations; favorable 4. Affordability business conditions for the founding and growth 5. Skills of new (social and commercial) enterprises; an innovation-prone environment, capable of C. Usage subindex developing and absorbing new knowledge; and 6. Individual usage an ICT-friendly government policy. 7. Business usage 8. Government usage ELEMENTS OF THE NETWORKED READINESS D. Impact subindex INDEX 9. Economic impacts The networked readiness framework translates into 10. Social impacts the NRI, comprising four subindexes that measure the environment for ICTs; the readiness of a society to use ICTs; the actual usage of all main stakeholders; and, The final NRI score is a simple average of the four finally, the impacts that ICTs generate in the economy composing subindex scores, while each subindex’s and in society. The three first subindexes can be score is a simple average of those of the composing regarded as the drivers that establish the conditions for pillars. In doing this, we assume that all NRI subindexes 6 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 31. Chapter 1.1: The Networked Readiness Index 2013 make a similar contribution to networked readiness. the quality of the educational system, the level of adult Appendix A includes detailed information on the literacy, and the rate of secondary education enrollment. composition and computation of the NRI 2013, while we briefly describe the different subindexes below. Usage subindex The usage subindex assesses the individual efforts of Environment subindex the main social agents—that is, individuals, business, The environment subindex gauges the friendliness and government—to increase their capacity to use ICTs of a country’s market and regulatory framework in as well as their actual use in their day-to-day activities supporting high levels of ICT uptake and the emergence with other agents. It includes 16 variables. of entrepreneurship and innovation-prone conditions. A The individual usage pillar (seven variables) supportive environment is necessary to maximize the measures ICT penetration and diffusion at the individual potential impacts of ICTs in boosting competitiveness level, using indicators such as the number of mobile and well-being. It includes a total of 18 variables phone subscriptions, individuals using the Internet, distributed into two pillars. households with a personal computer (PC), households The political and regulatory environment pillar with Internet access, both fixed and mobile broadband (composed of nine variables) assesses the extent subscriptions, and the use of social networks. to which the national legal framework facilitates ICT The business usage pillar (six variables) captures the penetration and the safe development of business extent of business Internet use as well as the efforts of activities, taking into account general features of the the firms in an economy to integrate ICTs into an internal, regulatory environment (including the protection afforded technology-savvy, innovation-conducive environment that to property rights, the independence of the judiciary, and generates productivity gains. Consequently, this pillar the efficiency of the law-making process) as well as more measures the firm’s technology absorption capacity as ICT-specific dimensions (the passing of laws related to well as its overall capacity to innovate and the production ICTs and software piracy rates). of technology novelties measured by the number of The business and innovation environment pillar (nine Patent Cooperation Treaty (PCT) patent applications. variables) gauges the quality of the business framework It also measures the extent of staff training available, conditions to boost entrepreneurship, taking into account which indicates the extent to which management dimensions related to the ease of doing business and employees are more capable of identifying and (including the presence of red tape and excessive fiscal developing business innovations. New this year, we have charges). This pillar also measures the presence of split the e-commerce variable from previous editions to conditions that allow innovation to flourish by including distinguish the business-to-business dimension from variables on the overall availability of technology, the the business-to-consumer one, as some noticeable demand conditions for innovative products (as proxied differences between the two dimensions exist in several by the development of government procurement of countries. advanced technology products), the availability of venture The government usage pillar (three variables) capital for financing innovation-related projects, and the provides insights into the importance that governments presence of a skilled labor force. place on carrying out ICT policies for competitiveness and to enhance the well-being of their citizens, the Readiness subindex efforts they make to implement their visions for ICT The readiness subindex, with a total of 12 variables, development, and the number of government services measures the degree to which a society is prepared to they provide online. make good use of an affordable ICT infrastructure and digital content. Impact subindex The infrastructure and digital content pillar (five The impact subindex gauges the broad economic variables) captures the development of ICT infrastructure and social impacts accruing from ICTs to boost (including mobile network coverage, international Internet competitiveness and well-being and that reflect the bandwidth, secure Internet servers, and electricity transformations toward an ICT- and technology-savvy production) as well as the accessibility of digital content. economy and society. It includes a total of eight The affordability pillar (three variables) assesses the variables. cost of accessing ICTs, either via mobile telephony or fixed The economic impacts pillar (four variables) broadband Internet, as well as the level of competition in measures the effect of ICTs on competitiveness thanks the Internet and telephony sectors that determine this cost. to the generation of technological and non-technological The skills pillar (four variables) gauges the ability innovations in the shape of patents, new products or of a society to make effective use of ICTs thanks to processes, and organizational practices. In addition, it the existence of basic educational skills captured by also measures the overall shift of an economy toward more knowledge-intensive activities. The Global Information Technology Report 2013 | 7 @ 2013 World Economic Forum
- 32. Chapter 1.1: The Networked Readiness Index 2013 Figure 3: Breakdown of indicators used in the Networked Readiness Index 2013 by data source EXECUTIVE OPINION INDICATORS FROM SURVEY OTHER SOURCES TOTAL: 54 INDICATORS 27 INDICATORS 27 INDICATORS (50%) (50%) The social impacts pillar (four variables) aims at organizations such as International Telecommunication assessing the ICT-driven improvements in well-being Union (ITU), the World Bank, and the United Nations. thanks to their impacts on the environment, education, International sources ensure the validation and energy consumption, health progress, or more-active comparability of data across countries. civil participation. At the moment, because of data The remaining 27 variables capture aspects that limitations, this pillar focuses on measuring the extent to are more qualitative in nature or for which internationally which governments are becoming more efficient in the comparable quantitative data are not available for a large use of ICTs and providing increasing online services to enough number of countries, but that nonetheless are their citizens, and thus improving their e-participation. crucial to fully measure national networked readiness. It also assess the extent to which ICTs are present in These data come from the Executive Opinion Survey (the education, as a proxy for the potential benefits that are Survey), which the Forum administers annually to over associated with the use of ICTs in education. 15,000 business leaders in all economies included in In general, measuring the impacts of ICTs is the Report.4 The Survey represents a unique source of a complex task, and the development of rigorous insight on many critical aspects related to the enabling quantitative data to do so is still in its infancy. As a result, environment, such as the effectiveness of law-making many of the dimensions where ICTs are producing bodies and the intensity of local competition; to ICT important impacts—especially when these impacts are readiness, such as the quality of the educational system not translated into commercial activities, as is the case and the accessibility of digital content; to ICT usage, for the environment and for health—cannot be covered such as capacity to innovate and the importance of yet. Therefore this subindex should be regarded as a government vision for ICTs; and to impact, such as the work in progress that will evolve to accommodate new impact of ICTs on developing new products and services data on many of these dimensions as they become and improving access to basic services. available. The NRI’s coverage every year is determined by the Survey coverage and data availability for indicators COMPUTATION METHODOLOGY AND DATA obtained from other sources, mostly international In order to capture as comprehensively as possible all organizations. This year the Report includes 144 relevant dimensions of societies’ networked readiness, economies, two more than in the 2012 edition. Five the NRI 2013 is composed of a mixture of quantitative new countries are included: Gabon, Guinea, Liberia, and survey data, as shown in Figure 3. Seychelles, and Sierra Leone. Libya was re-included Of the 54 variables composing the NRI this year, 27 after a year of absence. Three previously covered are quantitative data, collected primarily by international countries had to be excluded from this year’s Report: 8 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 33. Chapter 1.1: The Networked Readiness Index 2013 Survey data could not be collected in Belize or Angola; second group of economies that posts a remarkable in Syria, the political situation did not allow the Survey performance is the Asian Tigers: Singapore, Taiwan to be carried out. In the case of Tunisia, we decided (China), the Republic of Korea, and Hong Kong SAR. not to report the results this year because an important The latter, the lowest-ranked of the four, comes in at 14th structural break in the data makes comparisons with place. All boast outstanding business and innovation past years difficult. We hope to re-include these environments that are consistently ranked among the countries in the future. most conducive in the world. The Tigers also stand out More details on variables included in the Index and for their governments’ leadership in promoting the digital their computation can be found in Appendix A and in the agenda, and the impact of ICTs on society tends to be Technical Notes and Sources section at the end of the larger in these economies. Report. Overtaking Singapore and neighboring Sweden, Finland (1st) reaches the top of the NRI rankings for THE CURRENT NETWORKED READINESS the first time, thanks to improvements across the LANDSCAPE: INSIGHTS FROM THE NRI 2013 board. The country shows progress on two-thirds of This section provides an overview of the networked the 54 indicators of the NRI and posts a very consistent readiness landscape of the world as assessed by performance across all categories of the NRI. Finland the NRI 2013. It It presents the results of the top appears in the top three of each of the four subindexes 10 performers and selected countries by region, in and in the top 10 of nine of the 10 pillars, topping the following order: Europe and the Commonwealth two (skills and economic impacts). Among the 144 of Independent States, Asia and the Pacific, Latin economies, only Sweden achieves as impressive a America and the Caribbean, sub-Saharan Africa, and level of excellence and consistency. Finland’s lowest the Middle East and North Africa. Tables 1 through 5 rank among the 10 pillars is its 19th position in the report the 2013 rankings for the overall NRI, its four affordability pillar, which can hardly be considered a subindexes, and its ten pillars. In addition, the Country/ weakness given that, among high-income countries, Economy Profiles and Data Tables sections at the end ICT services in Finland are among the most affordable of the Report present the detailed results for the 144 (it comes in 5th, with Iceland and Sweden leading economies covered by the study and the 54 indicators the category). As set out in the government’s Digital composing the NRI. To complement the analysis of the Agenda for 2011–2020, Finland has set in motion a results, Box 1 discusses the persisting new digital divide virtuous digital circle offering exceptionally conducive across and within regions as revealed by the NRI results, institutional (3rd) and business (7th) environments, world- and Box 2 examines increasing returns to ICT, skills, and class infrastructure (2nd), and arguably one of the best innovation investment and suggests that an investment educational systems in the world. As a result, ICTs are threshold in these three areas may exist and that ubiquitous and penetration rates are among the highest without reaching it, the return may be negligible. Finally, globally. Ninety percent of households are equipped Appendix A of the present chapter details the structure with a computer and 90 percent of the population use of the NRI and describes the method of calculation. the Internet, mostly at broadband speeds. Finland is an innovation hub, boasting the world’s highest number TOP 10 of PCT applications per capita in the domain of ICTs, Two groups of economies dominate the top ranks of the and the third highest when considering all domains. NRI: Northern European economies and the so-called But the impact of ICTs extends well beyond innovation, Asian Tigers. Among the Northern European countries, permeating the entire economy and society. For four of the five Nordic economies represented in instance, Finland ranks 1st on the indicator capturing the the NRI—Finland, Sweden, Norway, and Denmark (in extent to which ICTs create new services and products. rank order)—continue to feature in the top 10. Iceland, Singapore remains 2nd overall, while slightly the last of the Nordics, is not too far behind, at 17th improving its score. The city-state ranks 1st in a record place (see Table 1). The performance of this group in four pillars, while Finland leads only two. Singapore terms of readiness is particularly outstanding. All five shows the way in the environment subindex, earning the Nordics feature in the top 10 of this subindex. Within top spot in both the political and regulatory environment this subindex, on the infrastructure and digital content pillar and the business and innovation environment pillar, four countries occupy the top positions. Overall, pillar. The extreme efficiency and business friendliness the four Nordic economies, the Netherlands, and the of its institutional framework, strong intellectual property United Kingdom comprise no less than six Northern protection, intense competition, and high university European countries among the top 10. As highlighted enrollment rate lead to these outstanding outcomes. in the previous edition and elsewhere in this Report, Singapore’s readiness (11th) is also world class, thanks the gap between those countries and the ones in the to its excellent digital infrastructure (19th) and skill base Southern and Eastern parts of Europe is profound. A (2nd). The affordability of ICTs (55th) is Singapore’s The Global Information Technology Report 2013 | 9 @ 2013 World Economic Forum
- 34. Chapter 1.1: The Networked Readiness Index 2013 only relative weakness. Within such a conducive 5th rank in the government usage pillar comes as a environment, it is not surprising to see Singapore in 3rd disappointment. Finally, the Netherlands ranks 2nd in the position in terms of ICT usage. Among other things, impact subindex, just behind Singapore. In particular, it the city boasts the world’s largest number of mobile ranks in the top 10 of the indicator capturing the impact broadband subscriptions per capita, above 100 percent. of ICTs on the creation of new business models (5th), Furthermore, it leads the government usage pillar and on the offering of new products and services (8th), and outperforms the Nordics, including Finland. Within this on access to basic services (5th). The country also pillar, Singapore achieves the maximum possible score earns the maximum score in the UN’s E-Participation on the UN’s Government Online Services Index. Finally, Index. The high share of knowledge-intensive jobs in it ranks 1st on the indicator capturing the importance of the economy—almost 50 percent, the 3rd highest in the ICTs for government and 4th in assessing the success world—and the country’s capacity for innovation further of latter in promoting ICTs. In this context, it comes as contribute to its outstanding performance in the impact no surprise that Singapore leads the impact subindex, subindex. appearing in the top 10 of each of the eight comprising Progressing two ranks, Norway enters the top indicators. five at 5th place. Overall, Norway’s performance is Sweden (3rd) maintains its score but declines two outstanding, as reflected in its 2nd and 3rd place, positions and abandons the top spot to Finland. Despite respectively, in the individual usage pillar (behind this slight decline in rank, the country undeniably remains Denmark) and in the infrastructure and digital content one of the few truly knowledge-based economies of the pillar (behind Iceland and Finland). Yet, despite this world. Aside from Finland, Sweden is the only country to strong performance, the country’s results are slightly less appear in the top 10 of nine pillars. Unlike its neighbor, consistent than those observed in Finland and Sweden. however, it does not lead in any of them. But such Unlike its neighbors, it ranks in the top 10 of four pillars remarkable consistency earns Sweden the top spot in but does not lead any. Of particular concern is Norway’s the usage subindex, reflecting the impressive level of ICT performance on the skills category, where it places adoption by businesses and the population at large. A 27th—far below Finland, Iceland, and Sweden. conducive environment, associated with a high degree Despite improving its score slightly, Switzerland of readiness and widespread usage, largely contribute slips one notch to 6th overall. It features in the top 10 to Sweden’s innovation capacity. The country boasts of seven pillars—the second highest total—and leads the world’s highest number of PCT patent applications the business usage pillar. The cost of ICTs is by far the per capita, ahead of Switzerland and Finland. Amid weakest aspect of the country’s performance, with such an outstanding assessment, a handful of indicators Switzerland ranking a mediocre 68th in the affordability call for attention: the average corporate tax rate is fairly pillar. Despite full liberalization of ICT services, its average high—equivalent to 53 percent of profits (114th)—and mobile cellular tariffs are among the highest in the world, two indicators point to somewhat lengthy administrative even when accounting for differences in costs of living procedures. (120th). Another area of relative weakness is the lack of The Netherlands climbs two ranks to 4th place, government efforts to promote ICTs. Switzerland ranks thanks to small gains on most of the indicators. Its 31st in this category, far behind most of the Asian Tigers, performance is consistently strong judging by its the Gulf countries, and the Nordics. This stands at odds presence in the top 10 of seven pillars. Like the top three with the excellent results in the other two pillars of the economies discussed above, the Netherlands offers a usage subindex, namely the business usage pillar (1st) very conducive environment, placing 6th in the regulatory and the individual usage pillar (10th). and political environment pillar and 5th in the business Up three notches, the United Kingdom (7th) and innovation pillar, even though red tape remains posts the biggest rank improvement among the top extensive. The country’s level of ICT readiness is also 10 economies. The country offers one of the most very high (13th), thanks to a strong skill base and world- conducive environments for ICT development, ranking class infrastructure, although it is somewhat undermined 6th in this subindex. In particular, it offers a sound and by lower marks in the affordability pillar (60th). The conducive political and regulatory environment (7th). The Netherlands earns excellent marks in terms of ICT usage country also boasts high levels of ICT adoption. ICTs (5th, up four). In particular, the country boasts the world’s are pervasive among the population, businesses, and 2nd highest fixed broadband Internet subscription rate, the government. Yet in all these categories, it is almost with 39 subscriptions per 100 population; moreover, systematically outperformed by the Nordics, the Asian 92 percent of the population use the Internet, the third- Tigers, or both, signaling room for improvement. Finally, largest proportion. Ninety-four percent of households the country is among the best when it comes to ICT are equipped with a computer and have Internet access; impacts, ranking 4th and 14th in terms of social and on both these indicators, the Netherlands ranks 2nd economic impacts, respectively. Most noticeably, the worldwide. Amid these positive results, the country’s country ranks 1st for the role of ICTs in giving rise to new 10 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 35. 1.1: The Networked Readiness Index 2013 Table 1: The Networked Readiness Index 2013 2012 rank 2012 rank Rank Country/Economy Score (out of 142) Group* Rank Country/Economy Score (out of 142) Group* 1 Finland 5.98 3 ADV 73 Ukraine 3.87 75 CIS 2 Singapore 5.96 2 ADV 74 Thailand 3.86 77 DEVASIA 3 Sweden 5.91 1 ADV 75 Romania 3.86 67 CEE 4 Netherlands 5.81 6 ADV 76 Indonesia 3.84 80 DEVASIA 5 Norway 5.66 7 ADV 77 Moldova 3.84 78 CIS 6 Switzerland 5.66 5 ADV 78 Bosnia and Herzegovina 3.80 84 CEE 7 United Kingdom 5.64 10 ADV 79 Seychelles 3.80 n/a SSA 8 Denmark 5.58 4 ADV 80 Egypt 3.78 79 MENA 9 United States 5.57 8 ADV 81 Cape Verde 3.78 81 SSA 10 Taiwan, China 5.47 11 ADV 82 Armenia 3.76 94 CIS 11 Korea, Rep. 5.46 12 ADV 83 Albania 3.75 68 CEE 12 Canada 5.44 9 ADV 84 Vietnam 3.74 83 DEVASIA 13 Germany 5.43 16 ADV 85 Jamaica 3.74 74 LATAM 14 Hong Kong SAR 5.40 13 ADV 86 Philippines 3.73 86 DEVASIA 15 Israel 5.39 20 ADV 87 Serbia 3.70 85 CEE 16 Luxembourg 5.37 21 ADV 88 Rwanda 3.68 82 SSA 17 Iceland 5.31 15 ADV 89 Morocco 3.64 91 MENA 18 Australia 5.26 17 ADV 90 Dominican Republic 3.62 87 LATAM 19 Austria 5.25 19 ADV 91 Ecuador 3.58 96 LATAM 20 New Zealand 5.25 14 ADV 92 Kenya 3.54 93 SSA 21 Japan 5.24 18 ADV 93 El Salvador 3.53 103 LATAM 22 Estonia 5.12 24 ADV 94 Lebanon 3.53 95 MENA 23 Qatar 5.10 28 MENA 95 Ghana 3.51 97 SSA 24 Belgium 5.10 22 ADV 96 Botswana 3.50 89 SSA 25 United Arab Emirates 5.07 30 MENA 97 Liberia 3.48 n/a SSA 26 France 5.06 23 ADV 98 Gambia, The 3.47 101 SSA 27 Ireland 5.05 25 ADV 99 Argentina 3.47 92 LATAM 28 Malta 4.90 26 ADV 100 Guyana 3.45 90 LATAM 29 Bahrain 4.83 27 MENA 101 Iran, Islamic Rep. 3.43 104 MENA 30 Malaysia 4.82 29 DEVASIA 102 Guatemala 3.42 98 LATAM 31 Saudi Arabia 4.82 34 MENA 103 Peru 3.39 106 LATAM 32 Lithuania 4.72 31 CEE 104 Paraguay 3.37 111 LATAM 33 Portugal 4.67 33 ADV 105 Pakistan 3.35 102 DEVASIA 34 Chile 4.59 39 LATAM 106 Cambodia 3.34 108 DEVASIA 35 Cyprus 4.59 32 ADV 107 Senegal 3.33 100 SSA 36 Puerto Rico 4.55 36 ADV 108 Venezuela 3.33 107 LATAM 37 Slovenia 4.53 37 ADV 109 Honduras 3.32 99 LATAM 38 Spain 4.51 38 ADV 110 Uganda 3.30 110 SSA 39 Barbados 4.49 35 LATAM 111 Namibia 3.29 105 SSA 40 Oman 4.48 40 MENA 112 Tajikistan 3.29 114 CIS 41 Latvia 4.43 41 CEE 113 Nigeria 3.27 112 SSA 42 Czech Republic 4.38 42 ADV 114 Bangladesh 3.22 113 DEVASIA 43 Kazakhstan 4.32 55 CIS 115 Zambia 3.19 109 SSA 44 Hungary 4.29 43 CEE 116 Zimbabwe 3.17 124 SSA 45 Turkey 4.22 52 CEE 117 Suriname 3.13 121 LATAM 46 Panama 4.22 57 LATAM 118 Kyrgyz Republic 3.09 115 CIS 47 Jordan 4.20 47 MENA 119 Bolivia 3.01 127 LATAM 48 Montenegro 4.20 46 CEE 120 Côte d’Ivoire 3.00 122 SSA 49 Poland 4.19 49 CEE 121 Gabon 2.97 n/a SSA 50 Italy 4.18 48 ADV 122 Mali 2.97 126 SSA 51 Croatia 4.17 45 CEE 123 Benin 2.97 117 SSA 52 Uruguay 4.16 44 LATAM 124 Cameroon 2.95 125 SSA 53 Costa Rica 4.15 58 LATAM 125 Nicaragua 2.93 131 LATAM 54 Russian Federation 4.13 56 CIS 126 Nepal 2.93 128 DEVASIA 55 Mauritius 4.12 53 SSA 127 Tanzania 2.92 123 SSA 56 Azerbaijan 4.11 61 CIS 128 Ethiopia 2.85 130 SSA 57 Brunei Darussalam 4.11 54 DEVASIA 129 Malawi 2.83 116 SSA 58 China 4.03 51 DEVASIA 130 Burkina Faso 2.80 135 SSA 59 Mongolia 4.01 63 CIS 131 Algeria 2.78 118 MENA 60 Brazil 3.97 65 LATAM 132 Libya 2.77 n/a MENA 61 Slovak Republic 3.95 64 ADV 133 Mozambique 2.76 120 SSA 62 Kuwait 3.94 62 MENA 134 Timor-Leste 2.72 132 DEVASIA 63 Mexico 3.93 76 LATAM 135 Mauritania 2.71 139 MENA 64 Greece 3.93 59 ADV 136 Swaziland 2.69 136 SSA 65 Georgia 3.93 88 CIS 137 Madagascar 2.69 134 SSA 66 Colombia 3.91 73 LATAM 138 Lesotho 2.68 133 SSA 67 Macedonia, FYR 3.89 66 CEE 139 Yemen 2.63 141 MENA 68 India 3.88 69 DEVASIA 140 Guinea 2.61 n/a SSA 69 Sri Lanka 3.88 71 DEVASIA 141 Haiti 2.58 142 LATAM 70 South Africa 3.87 72 SSA 142 Chad 2.53 138 SSA 71 Bulgaria 3.87 70 CEE 143 Sierra Leone 2.53 n/a SSA 72 Trinidad and Tobago 3.87 60 LATAM 144 Burundi 2.30 137 SSA Note: Group classification follows the International Monetary Fund’s classification (situation as of October 2012). * Groups: ADV = Advanced economies; CEE = Central and Eastern Europe; CIS = Commonwealth of Independent States and Mongolia; DEVASIA = Developing Asia; LATAM = Latin America and the Caribbean; MENA = Middle East and North Africa; SSA = Sub-Saharan Africa. The Global Information Technology Report 2012 | 11 @ 2013 World Economic Forum
- 36. 1.1: The Networked Readiness Index 2013 Table 2: Environment subindex and pillars Political and Business and Political and Business and regulatory innovation regulatory innovation ENVIRONMENT SUBINDEX environment environment ENVIRONMENT SUBINDEX environment environment Rank Country/Economy Score Rank Score Rank Score Rank Country/Economy Score Rank Score Rank Score 1 Singapore 5.89 1 5.97 1 5.80 73 Georgia 3.86 100 3.34 54 4.39 2 New Zealand 5.65 2 5.92 6 5.38 74 Morocco 3.85 73 3.66 79 4.04 3 Finland 5.59 3 5.84 7 5.34 75 Mexico 3.85 79 3.60 74 4.09 4 Netherlands 5.53 6 5.67 5 5.40 76 Mongolia 3.84 93 3.41 62 4.28 5 Sweden 5.48 5 5.67 11 5.30 77 Azerbaijan 3.84 66 3.72 86 3.96 6 United Kingdom 5.48 7 5.62 8 5.33 78 Indonesia 3.83 82 3.57 73 4.10 7 Switzerland 5.46 8 5.60 9 5.32 79 Cambodia 3.83 65 3.75 91 3.92 8 Hong Kong SAR 5.44 15 5.27 2 5.61 80 Tajikistan 3.80 47 4.06 121 3.54 9 Norway 5.42 9 5.52 10 5.31 81 Guyana 3.79 84 3.55 81 4.02 10 Canada 5.42 12 5.36 3 5.47 82 Costa Rica 3.78 74 3.66 94 3.90 11 Australia 5.29 10 5.39 21 5.19 83 Italy 3.77 95 3.39 69 4.16 12 Denmark 5.27 14 5.30 19 5.23 84 Albania 3.76 102 3.31 66 4.22 13 Luxembourg 5.25 4 5.77 34 4.73 85 India 3.75 75 3.65 99 3.85 14 Qatar 5.19 18 5.10 12 5.29 86 Lebanon 3.74 133 2.76 35 4.73 15 Ireland 5.17 16 5.24 24 5.10 87 Greece 3.73 103 3.29 68 4.16 16 United States 5.11 22 4.94 13 5.29 88 Uganda 3.71 60 3.83 115 3.59 17 Belgium 5.09 23 4.94 18 5.23 89 Romania 3.70 106 3.25 70 4.14 18 Malaysia 5.07 24 4.88 16 5.25 90 Armenia 3.70 104 3.27 72 4.12 19 United Arab Emirates 5.05 26 4.84 17 5.25 91 Peru 3.69 121 3.04 57 4.34 20 Germany 5.05 11 5.38 36 4.71 92 Bosnia and Herzegovina 3.68 97 3.36 83 3.99 21 Iceland 5.02 25 4.88 22 5.15 93 Trinidad and Tobago 3.66 91 3.42 93 3.90 22 Austria 4.99 17 5.21 31 4.78 94 Nigeria 3.66 89 3.48 101 3.83 23 Israel 4.97 28 4.69 15 5.26 95 Dominican Republic 3.65 109 3.22 75 4.08 24 Taiwan, China 4.97 33 4.51 4 5.44 96 Colombia 3.64 92 3.41 95 3.87 25 Saudi Arabia 4.87 29 4.68 25 5.07 97 Vietnam 3.63 85 3.51 108 3.75 26 Japan 4.86 19 5.04 37 4.68 98 Kenya 3.63 87 3.49 106 3.76 27 France 4.84 20 5.02 39 4.66 99 Egypt 3.62 96 3.39 98 3.85 28 Bahrain 4.83 40 4.39 14 5.27 100 Philippines 3.60 98 3.36 100 3.84 29 Rwanda 4.81 13 5.30 59 4.32 101 Senegal 3.60 114 3.11 76 4.08 30 Chile 4.80 38 4.40 20 5.20 102 Russian Federation 3.58 108 3.24 90 3.92 31 Estonia 4.71 27 4.84 45 4.59 103 Malawi 3.58 63 3.80 131 3.36 32 Korea, Rep. 4.70 42 4.25 23 5.14 104 Ethiopia 3.55 83 3.56 119 3.55 33 South Africa 4.69 21 5.00 55 4.38 105 Ukraine 3.54 124 3.01 78 4.07 34 Cyprus 4.67 41 4.35 26 4.99 106 Serbia 3.54 115 3.10 85 3.98 35 Puerto Rico 4.65 35 4.46 30 4.83 107 Brazil 3.53 78 3.63 126 3.42 36 Barbados 4.63 32 4.59 38 4.67 108 Tanzania 3.52 76 3.65 128 3.38 37 Oman 4.61 34 4.47 33 4.75 109 Moldova 3.52 117 3.09 88 3.94 38 Portugal 4.57 43 4.24 27 4.91 110 Burkina Faso 3.49 88 3.49 122 3.49 39 Malta 4.53 31 4.59 50 4.47 111 Mali 3.47 99 3.35 114 3.59 40 Spain 4.49 44 4.14 29 4.85 112 Honduras 3.47 111 3.21 109 3.72 41 Mauritius 4.48 36 4.42 46 4.53 113 Ecuador 3.46 118 3.07 96 3.86 42 Jordan 4.35 48 4.05 40 4.65 114 Sierra Leone 3.44 86 3.50 127 3.39 43 Latvia 4.33 52 4.02 42 4.65 115 Benin 3.44 94 3.41 123 3.47 44 Slovenia 4.33 61 3.81 28 4.85 116 Pakistan 3.42 123 3.03 102 3.81 45 Lithuania 4.31 51 4.02 44 4.60 117 El Salvador 3.41 129 2.86 87 3.95 46 Turkey 4.31 54 3.97 43 4.64 118 Guatemala 3.39 127 2.92 97 3.85 47 Hungary 4.23 49 4.04 51 4.42 119 Cameroon 3.36 126 2.97 107 3.75 48 Panama 4.22 69 3.69 32 4.76 120 Mozambique 3.36 105 3.26 124 3.45 49 Czech Republic 4.21 46 4.06 56 4.36 121 Lesotho 3.32 116 3.09 118 3.55 50 Uruguay 4.20 58 3.91 47 4.50 122 Nepal 3.31 119 3.05 117 3.57 51 Liberia 4.17 53 4.01 58 4.34 123 Gabon 3.31 107 3.25 129 3.37 52 Montenegro 4.16 72 3.67 41 4.65 124 Paraguay 3.29 138 2.65 89 3.93 53 Seychelles 4.14 50 4.03 63 4.25 125 Madagascar 3.26 134 2.73 104 3.79 54 Gambia, The 4.13 30 4.68 116 3.58 126 Argentina 3.25 131 2.82 110 3.68 55 Poland 4.10 62 3.80 53 4.41 127 Côte d’Ivoire 3.23 128 2.87 113 3.60 56 Botswana 4.10 39 4.40 103 3.80 128 Bangladesh 3.19 137 2.71 111 3.68 57 Brunei Darussalam 4.09 45 4.11 77 4.07 129 Bolivia 3.19 110 3.22 137 3.17 58 Namibia 4.04 37 4.41 112 3.67 130 Libya 3.18 130 2.83 120 3.54 59 Macedonia, FYR 4.04 80 3.59 49 4.48 131 Timor-Leste 3.18 125 3.00 130 3.36 60 Thailand 4.00 81 3.59 52 4.42 132 Zimbabwe 3.13 120 3.05 135 3.22 61 Zambia 3.99 64 3.77 65 4.22 133 Swaziland 3.12 112 3.21 138 3.03 62 Slovak Republic 3.99 70 3.68 61 4.30 134 Nicaragua 3.11 122 3.03 136 3.18 63 Sri Lanka 3.95 68 3.70 67 4.21 135 Suriname 3.08 135 2.73 125 3.43 64 Ghana 3.95 57 3.92 84 3.99 136 Mauritania 3.07 113 3.18 140 2.95 65 Cape Verde 3.94 55 3.97 92 3.91 137 Kyrgyz Republic 3.02 136 2.72 132 3.32 66 Kazakhstan 3.93 77 3.63 64 4.23 138 Yemen 2.91 140 2.51 133 3.30 67 Jamaica 3.93 59 3.87 82 4.00 139 Guinea 2.84 132 2.77 141 2.91 68 Bulgaria 3.91 101 3.31 48 4.50 140 Venezuela 2.83 142 2.43 134 3.22 69 Kuwait 3.90 71 3.67 71 4.13 141 Haiti 2.65 143 2.40 142 2.89 70 Croatia 3.90 90 3.48 60 4.32 142 Burundi 2.63 144 2.30 139 2.96 71 China 3.88 56 3.97 105 3.78 143 Algeria 2.60 141 2.46 143 2.74 72 Iran, Islamic Rep. 3.86 67 3.70 80 4.03 144 Chad 2.59 139 2.59 144 2.58 12 | The Global Information Technology Report 2012 @ 2013 World Economic Forum
- 37. 1.1: The Networked Readiness Index 2013 Table 3: Readiness subindex and pillars Infrastructure Infrastructure and digital and digital READINESS SUBINDEX content Affordability Skills READINESS SUBINDEX content Affordability Skills Rank Country/Economy Score Rank Score Rank Score Rank Score Rank Country/Economy Score Rank Score Rank Score Rank Score 1 Finland 6.51 2 6.87 19 6.22 1 6.45 73 Armenia 4.60 72 3.88 77 4.97 59 4.94 2 Iceland 6.43 1 6.87 5 6.55 9 5.87 74 Brazil 4.53 62 4.16 76 5.01 91 4.42 3 Sweden 6.38 4 6.83 7 6.48 10 5.84 75 Bulgaria 4.53 37 5.03 106 3.76 70 4.79 4 United States 6.25 7 6.80 15 6.31 20 5.62 76 Mexico 4.47 82 3.53 63 5.36 87 4.51 5 Canada 6.17 5 6.81 43 5.69 6 6.02 77 Jamaica 4.46 65 4.10 87 4.81 88 4.48 6 Norway 6.15 3 6.84 23 6.09 27 5.52 78 Paraguay 4.44 67 4.04 52 5.53 107 3.74 7 Denmark 6.04 14 6.40 22 6.09 18 5.63 79 Vietnam 4.43 114 2.76 38 5.86 79 4.68 8 Switzerland 6.02 8 6.71 68 5.25 4 6.10 80 Colombia 4.41 96 3.18 67 5.29 74 4.77 9 Austria 6.01 9 6.60 37 5.89 24 5.55 81 Venezuela 4.41 85 3.42 51 5.55 96 4.26 10 United Kingdom 5.99 13 6.42 35 5.90 15 5.66 82 Egypt 4.41 93 3.19 8 6.47 115 3.56 11 Singapore 5.96 19 6.20 55 5.50 2 6.18 83 Cape Verde 4.40 103 3.04 42 5.72 90 4.43 12 Cyprus 5.92 21 6.08 28 6.02 16 5.66 84 Macedonia, FYR 4.36 69 3.99 94 4.40 77 4.70 13 Netherlands 5.92 11 6.48 60 5.39 8 5.89 85 Philippines 4.36 84 3.42 82 4.89 73 4.77 14 Germany 5.88 10 6.50 53 5.52 19 5.62 86 Lebanon 4.29 88 3.27 95 4.12 28 5.49 15 Belgium 5.84 18 6.20 70 5.20 3 6.11 87 Zimbabwe 4.28 129 2.18 9 6.47 98 4.18 16 Ireland 5.80 16 6.24 61 5.38 12 5.78 88 Morocco 4.28 95 3.18 30 6.02 114 3.63 17 Taiwan, China 5.80 22 5.99 54 5.50 7 5.91 89 Ecuador 4.26 78 3.71 91 4.54 84 4.54 18 Luxembourg 5.79 12 6.43 48 5.61 33 5.33 90 El Salvador 4.16 92 3.20 41 5.72 117 3.55 19 Hong Kong SAR 5.70 27 5.78 17 6.28 52 5.05 91 Bangladesh 4.14 109 2.84 13 6.34 128 3.24 20 Lithuania 5.67 33 5.23 14 6.32 29 5.46 92 Slovak Republic 4.12 56 4.29 113 3.32 75 4.75 21 Malta 5.65 15 6.26 72 5.15 26 5.53 93 Pakistan 4.11 104 3.00 21 6.15 129 3.19 22 Israel 5.59 29 5.73 44 5.66 32 5.37 94 Brunei Darussalam 4.06 50 4.47 135 2.33 31 5.38 23 Korea, Rep. 5.56 20 6.13 83 4.88 14 5.67 95 South Africa 4.04 59 4.21 104 3.91 102 4.01 24 Estonia 5.55 26 5.79 56 5.44 30 5.43 96 Algeria 4.00 119 2.62 64 5.35 101 4.02 25 Australia 5.51 6 6.81 97 4.07 17 5.64 97 Argentina 3.98 70 3.99 114 3.29 80 4.66 26 France 5.40 28 5.76 86 4.84 21 5.59 98 Dominican Republic 3.94 98 3.08 79 4.94 105 3.79 27 Latvia 5.38 41 4.83 16 6.30 54 5.01 99 Liberia 3.93 142 1.57 3 6.78 122 3.42 28 Japan 5.36 24 5.84 92 4.50 13 5.73 100 Suriname 3.92 118 2.66 90 4.64 89 4.46 29 Ukraine 5.34 74 3.85 2 6.88 35 5.30 101 Ghana 3.89 121 2.51 59 5.40 106 3.77 30 New Zealand 5.33 17 6.22 100 3.96 11 5.81 102 Honduras 3.86 107 2.88 78 4.96 108 3.72 31 Slovenia 5.33 25 5.82 85 4.86 36 5.30 103 Kyrgyz Republic 3.78 90 3.26 107 3.67 92 4.40 32 Russian Federation 5.29 43 4.72 18 6.23 61 4.91 104 Uganda 3.76 106 2.88 75 5.07 125 3.33 33 Costa Rica 5.28 76 3.77 6 6.52 23 5.56 105 Guyana 3.75 94 3.19 110 3.50 82 4.56 34 Portugal 5.27 34 5.23 57 5.44 48 5.14 106 Seychelles 3.73 44 4.67 139 1.61 60 4.92 35 Bahrain 5.27 39 4.97 46 5.64 44 5.20 107 Botswana 3.72 100 3.06 109 3.57 86 4.52 36 Turkey 5.27 48 4.56 4 6.59 81 4.65 108 Guatemala 3.72 116 2.69 81 4.92 118 3.53 37 Poland 5.26 38 5.00 47 5.63 47 5.15 109 Iran, Islamic Rep. 3.69 97 3.13 115 3.13 69 4.79 38 Italy 5.25 40 4.94 49 5.61 45 5.18 110 Kenya 3.68 110 2.84 105 3.81 93 4.39 39 Saudi Arabia 5.23 36 5.07 65 5.35 37 5.29 111 Cambodia 3.49 87 3.31 112 3.47 109 3.68 40 United Arab Emirates 5.23 30 5.46 89 4.70 25 5.54 112 Nepal 3.33 140 1.62 69 5.20 131 3.17 41 Croatia 5.14 57 4.28 26 6.03 51 5.09 113 Haiti 3.33 144 1.53 24 6.09 143 2.37 42 Mongolia 5.13 60 4.18 10 6.43 72 4.78 114 Gabon 3.33 125 2.32 96 4.11 116 3.55 43 Bosnia and Herzegovina 5.08 64 4.13 31 5.99 49 5.11 115 Namibia 3.27 102 3.04 117 3.09 111 3.67 44 Qatar 5.06 35 5.22 103 3.92 5 6.04 116 Rwanda 3.25 105 2.98 116 3.12 113 3.64 45 Trinidad and Tobago 5.02 53 4.41 58 5.40 39 5.25 117 Yemen 3.24 123 2.43 88 4.75 138 2.54 46 Moldova 5.02 55 4.31 25 6.06 78 4.69 118 Tajikistan 3.22 126 2.30 131 2.49 64 4.86 47 Greece 5.00 46 4.62 73 5.13 41 5.25 119 Peru 3.08 86 3.31 138 1.86 100 4.07 48 Georgia 4.99 68 4.03 11 6.39 83 4.56 120 Senegal 3.07 108 2.86 118 3.07 126 3.30 49 Chile 4.99 61 4.18 33 5.94 66 4.85 121 Nicaragua 3.07 91 3.25 136 2.31 112 3.64 50 Kazakhstan 4.98 63 4.14 36 5.90 62 4.91 122 Côte d’Ivoire 3.07 99 3.07 119 2.96 130 3.17 51 Azerbaijan 4.98 75 3.82 20 6.16 57 4.96 123 Nigeria 3.02 115 2.70 120 2.96 123 3.40 52 Romania 4.98 47 4.62 62 5.36 58 4.95 124 Bolivia 3.01 138 1.74 122 2.89 94 4.39 53 Czech Republic 4.97 23 5.85 99 3.97 50 5.10 125 Gambia, The 3.00 117 2.68 124 2.81 120 3.50 54 Mauritius 4.97 77 3.73 12 6.36 67 4.82 126 Libya 2.91 80 3.56 141 1.00 97 4.18 55 Jordan 4.97 81 3.55 27 6.03 34 5.33 127 Chad 2.90 127 2.22 98 4.06 141 2.43 56 Oman 4.92 66 4.05 34 5.90 68 4.81 128 Benin 2.85 113 2.79 133 2.39 124 3.39 57 Malaysia 4.87 73 3.85 50 5.58 43 5.20 129 Zambia 2.85 133 2.02 127 2.69 104 3.84 58 Kuwait 4.87 45 4.64 71 5.18 71 4.79 130 Swaziland 2.84 112 2.80 137 2.03 110 3.68 59 Hungary 4.87 58 4.25 74 5.10 42 5.24 131 Cameroon 2.80 137 1.75 125 2.79 103 3.87 60 Panama 4.86 51 4.42 32 5.99 99 4.17 132 Guinea 2.80 132 2.10 108 3.58 135 2.73 61 Spain 4.85 31 5.43 102 3.93 46 5.18 133 Mauritania 2.80 134 1.95 101 3.94 139 2.50 62 Montenegro 4.82 42 4.79 93 4.42 40 5.25 134 Timor-Leste 2.71 122 2.48 123 2.82 133 2.82 63 Thailand 4.78 71 3.95 45 5.64 76 4.75 135 Tanzania 2.70 124 2.36 130 2.58 132 3.16 64 Sri Lanka 4.78 101 3.05 29 6.02 38 5.26 136 Lesotho 2.68 130 2.16 134 2.35 119 3.53 65 Barbados 4.76 32 5.25 111 3.48 22 5.56 137 Madagascar 2.57 143 1.56 121 2.90 127 3.26 66 China 4.76 83 3.46 40 5.82 53 5.01 138 Burundi 2.50 128 2.20 n/a n/a 134 2.79 67 Serbia 4.71 54 4.39 84 4.87 65 4.86 139 Malawi 2.41 120 2.58 140 1.17 121 3.47 68 India 4.70 111 2.80 1 7.00 95 4.31 140 Ethiopia 2.34 141 1.62 126 2.78 137 2.61 69 Puerto Rico 4.70 52 4.42 n/a n/a 55 4.97 141 Mali 2.32 139 1.65 128 2.67 136 2.63 70 Uruguay 4.66 49 4.50 80 4.94 85 4.53 142 Burkina Faso 2.27 136 1.79 129 2.59 142 2.43 71 Indonesia 4.66 89 3.26 39 5.82 63 4.88 143 Mozambique 2.22 135 1.81 132 2.42 140 2.44 72 Albania 4.62 79 3.60 66 5.29 56 4.96 144 Sierra Leone 1.74 131 2.11 141 1.00 144 2.10 The Global Information Technology Report 2012 | 13 @ 2013 World Economic Forum
- 38. 1.1: The Networked Readiness Index 2013 Table 4: Usage subindex and pillars Individual Business Governent Individual Business Governent USAGE SUBINDEX usage usage usage USAGE SUBINDEX usage usage usage Rank Country/Economy Score Rank Score Rank Score Rank Score Rank Country/Economy Score Rank Score Rank Score Rank Score 1 Sweden 6.00 3 6.53 4 5.89 8 5.56 73 Vietnam 3.52 78 3.08 88 3.30 62 4.16 2 Finland 5.97 6 6.40 3 5.97 10 5.55 74 Argentina 3.51 60 3.92 90 3.28 117 3.35 3 Singapore 5.86 11 6.13 14 5.18 1 6.29 75 Egypt 3.49 69 3.43 108 3.11 80 3.92 4 Korea, Rep. 5.86 7 6.39 11 5.31 3 5.89 76 Philippines 3.46 95 2.69 47 3.65 67 4.04 5 Netherlands 5.78 5 6.42 8 5.53 15 5.39 77 Georgia 3.46 75 3.16 112 3.07 63 4.14 6 Denmark 5.75 1 6.65 7 5.56 24 5.05 78 Serbia 3.45 55 4.01 135 2.70 104 3.64 7 Norway 5.75 2 6.62 12 5.23 14 5.39 79 Armenia 3.44 77 3.08 89 3.30 78 3.94 8 Switzerland 5.70 10 6.15 1 6.11 31 4.86 80 Mongolia 3.41 90 2.79 78 3.39 66 4.06 9 Japan 5.62 13 5.88 2 6.01 27 4.98 81 India 3.41 121 1.97 45 3.70 40 4.55 10 Luxembourg 5.62 4 6.47 16 4.97 13 5.41 82 Moldova 3.39 72 3.36 129 2.86 76 3.97 11 United Kingdom 5.59 9 6.17 15 5.05 9 5.55 83 Thailand 3.39 88 2.84 63 3.50 86 3.84 12 Germany 5.57 14 5.88 5 5.81 26 5.01 84 Kenya 3.38 115 2.08 53 3.62 44 4.43 13 United States 5.51 18 5.66 10 5.37 11 5.49 85 Albania 3.37 84 2.93 79 3.38 95 3.79 14 Israel 5.45 28 5.43 6 5.67 20 5.23 86 Dominican Republic 3.36 93 2.73 82 3.36 72 3.99 15 Taiwan, China 5.45 20 5.66 13 5.19 12 5.49 87 Bosnia and Herzegovina 3.34 73 3.32 104 3.15 111 3.55 16 Qatar 5.35 16 5.82 27 4.47 5 5.75 88 Ecuador 3.33 85 2.92 92 3.27 94 3.79 17 Austria 5.23 19 5.66 9 5.39 35 4.65 89 Jamaica 3.32 86 2.89 86 3.32 97 3.76 18 Australia 5.22 15 5.88 25 4.54 19 5.25 90 Sri Lanka 3.32 110 2.19 57 3.57 57 4.20 19 New Zealand 5.20 17 5.78 23 4.54 18 5.29 91 Peru 3.32 87 2.89 93 3.26 90 3.81 20 Hong Kong SAR 5.18 12 5.91 19 4.77 30 4.87 92 Gambia, The 3.32 118 2.03 50 3.64 53 4.28 21 Iceland 5.15 8 6.35 20 4.77 50 4.32 93 Guatemala 3.28 96 2.67 49 3.65 114 3.51 22 France 5.13 24 5.52 18 4.86 25 5.02 94 El Salvador 3.27 91 2.79 100 3.20 88 3.83 23 United Arab Emirates 5.07 36 4.90 28 4.31 2 5.99 95 Ukraine 3.27 74 3.17 84 3.35 121 3.28 24 Canada 5.04 27 5.44 24 4.54 22 5.14 96 Cape Verde 3.25 103 2.37 122 2.96 45 4.41 25 Estonia 5.01 23 5.53 29 4.13 17 5.36 97 Guyana 3.24 106 2.25 54 3.60 85 3.87 26 Belgium 4.97 25 5.48 17 4.94 41 4.48 98 Lebanon 3.21 63 3.70 116 3.02 134 2.90 27 Malta 4.92 22 5.59 38 3.81 16 5.37 99 Botswana 3.20 98 2.57 96 3.23 91 3.80 28 Ireland 4.87 21 5.59 22 4.58 43 4.44 100 Senegal 3.16 113 2.09 66 3.47 82 3.91 29 Malaysia 4.83 46 4.44 26 4.49 7 5.57 101 Namibia 3.12 99 2.53 76 3.40 116 3.43 30 Bahrain 4.83 30 5.13 56 3.59 4 5.78 102 Ghana 3.12 102 2.40 103 3.15 89 3.81 31 Saudi Arabia 4.74 47 4.39 30 4.10 6 5.73 103 Tajikistan 3.12 107 2.20 87 3.32 87 3.83 32 Portugal 4.50 41 4.71 36 3.86 28 4.93 104 Cambodia 3.09 112 2.14 70 3.44 103 3.69 33 Spain 4.46 31 5.12 41 3.80 42 4.46 105 Venezuela 3.07 80 3.02 120 2.97 126 3.21 34 Barbados 4.44 26 5.48 43 3.72 64 4.13 106 Iran, Islamic Rep. 3.06 108 2.20 119 2.99 71 4.00 35 Slovenia 4.43 32 5.06 32 3.94 52 4.30 107 Rwanda 3.05 139 1.50 67 3.46 59 4.20 36 Lithuania 4.41 37 4.86 42 3.75 36 4.60 108 Nigeria 3.04 111 2.16 68 3.45 113 3.52 37 Oman 4.36 50 4.31 52 3.62 21 5.14 109 Zambia 3.04 122 1.84 80 3.36 79 3.92 38 Czech Republic 4.35 29 5.18 31 4.08 93 3.79 110 Paraguay 3.01 97 2.66 110 3.09 123 3.27 39 Puerto Rico 4.31 59 3.94 21 4.59 46 4.40 111 Honduras 3.01 101 2.45 75 3.40 127 3.17 40 Chile 4.24 53 4.12 44 3.71 29 4.90 112 Suriname 2.97 79 3.07 113 3.06 138 2.78 41 Brunei Darussalam 4.21 49 4.32 59 3.56 33 4.75 113 Bolivia 2.96 104 2.34 109 3.09 115 3.45 42 Kazakhstan 4.18 54 4.06 85 3.34 23 5.13 114 Liberia 2.93 126 1.74 69 3.45 109 3.59 43 Latvia 4.16 38 4.84 51 3.64 75 3.99 115 Mali 2.93 125 1.76 114 3.06 77 3.96 44 Brazil 4.08 58 3.97 34 3.90 48 4.38 116 Côte d’Ivoire 2.92 117 2.07 105 3.14 112 3.54 45 Italy 4.08 34 4.93 46 3.68 108 3.62 117 Uganda 2.89 131 1.65 106 3.13 84 3.90 46 Hungary 4.07 42 4.67 61 3.50 69 4.03 118 Pakistan 2.89 123 1.83 91 3.27 110 3.56 47 Croatia 4.06 39 4.83 81 3.36 73 3.99 119 Cameroon 2.86 130 1.65 98 3.21 101 3.71 48 Cyprus 4.05 44 4.52 60 3.51 65 4.13 120 Tanzania 2.86 127 1.68 102 3.16 99 3.73 49 Slovak Republic 4.04 35 4.92 65 3.47 100 3.71 121 Bangladesh 2.83 128 1.65 132 2.81 68 4.03 50 Poland 4.01 33 5.00 74 3.41 107 3.62 122 Gabon 2.83 105 2.34 130 2.85 120 3.30 51 Panama 4.00 65 3.59 39 3.81 37 4.60 123 Kyrgyz Republic 2.81 94 2.70 138 2.65 130 3.08 52 Azerbaijan 3.99 64 3.68 58 3.57 34 4.71 124 Nicaragua 2.76 120 1.98 111 3.07 125 3.21 53 Montenegro 3.95 56 4.01 71 3.43 47 4.39 125 Zimbabwe 2.72 114 2.09 115 3.03 132 3.05 54 Uruguay 3.94 51 4.17 72 3.43 55 4.22 126 Burkina Faso 2.71 140 1.49 131 2.83 92 3.80 55 Kuwait 3.94 40 4.83 83 3.35 105 3.63 127 Benin 2.70 109 2.19 117 3.01 135 2.90 56 Russian Federation 3.91 45 4.51 95 3.24 74 3.99 128 Mozambique 2.66 141 1.45 125 2.90 106 3.62 57 Seychelles 3.85 62 3.76 64 3.48 51 4.31 129 Libya 2.65 89 2.80 136 2.69 143 2.44 58 China 3.80 83 2.96 35 3.86 38 4.58 130 Ethiopia 2.62 143 1.34 140 2.62 83 3.91 59 Costa Rica 3.79 71 3.37 37 3.84 61 4.17 131 Malawi 2.60 136 1.56 121 2.97 122 3.27 60 Jordan 3.79 66 3.55 55 3.59 56 4.22 132 Mauritania 2.58 116 2.08 126 2.88 137 2.79 61 Macedonia, FYR 3.78 52 4.13 123 2.94 54 4.27 133 Madagascar 2.55 132 1.60 118 3.00 131 3.05 62 Turkey 3.78 68 3.51 48 3.65 60 4.18 134 Nepal 2.54 137 1.54 127 2.87 124 3.21 63 Bulgaria 3.75 48 4.32 101 3.18 98 3.74 135 Lesotho 2.52 129 1.65 133 2.79 128 3.12 64 Colombia 3.75 76 3.09 77 3.39 32 4.77 136 Timor-Leste 2.51 124 1.80 139 2.63 129 3.11 65 Mauritius 3.71 70 3.38 73 3.42 49 4.34 137 Sierra Leone 2.50 133 1.59 141 2.59 119 3.33 66 Mexico 3.68 82 2.98 62 3.50 39 4.55 138 Swaziland 2.49 119 1.98 124 2.90 140 2.58 67 Trinidad and Tobago 3.67 61 3.77 97 3.23 70 4.01 139 Guinea 2.47 138 1.53 128 2.86 133 3.02 68 Greece 3.66 43 4.53 107 3.11 118 3.34 140 Algeria 2.42 100 2.46 144 2.15 139 2.65 69 Romania 3.66 57 3.97 94 3.24 96 3.76 141 Chad 2.34 142 1.35 134 2.79 136 2.89 70 Indonesia 3.58 92 2.74 40 3.81 58 4.20 142 Yemen 2.27 135 1.57 137 2.68 141 2.56 71 Morocco 3.55 67 3.54 99 3.20 81 3.92 143 Haiti 2.17 134 1.58 142 2.56 144 2.36 72 South Africa 3.53 81 2.99 33 3.91 102 3.70 144 Burundi 2.04 144 1.33 143 2.31 142 2.47 14 | The Global Information Technology Report 2012 @ 2013 World Economic Forum
- 39. 1.1: The Networked Readiness Index 2013 Table 5: Impact subindex and pillars Economic Social Economic Social IMPACT SUBINDEX impacts impacts IMPACT SUBINDEX impacts impacts Rank Country/Economy Score Rank Score Rank Score Rank Country/Economy Score Rank Score Rank Score 1 Singapore 6.13 2 5.98 1 6.28 73 Gambia, The 3.44 63 3.31 79 3.57 2 Netherlands 6.00 4 5.93 3 6.08 74 Moldova 3.43 84 3.05 65 3.80 3 Finland 5.86 1 5.99 9 5.74 75 Vietnam 3.39 89 2.97 64 3.81 4 Sweden 5.77 3 5.93 10 5.62 76 Georgia 3.39 97 2.90 60 3.88 5 Korea, Rep. 5.71 12 5.24 2 6.19 77 Poland 3.38 64 3.31 86 3.45 6 Taiwan, China 5.65 7 5.49 6 5.82 78 Macedonia, FYR 3.36 92 2.96 70 3.77 7 Israel 5.54 6 5.63 14 5.45 79 Nigeria 3.34 65 3.28 88 3.40 8 United Kingdom 5.48 14 5.09 4 5.86 80 Mauritius 3.33 82 3.10 78 3.57 9 Switzerland 5.44 5 5.80 24 5.08 81 Ukraine 3.32 74 3.21 87 3.43 10 United States 5.43 11 5.32 11 5.55 82 Greece 3.31 80 3.12 83 3.51 11 Norway 5.32 13 5.17 13 5.47 83 Armenia 3.31 69 3.26 90 3.37 12 Hong Kong SAR 5.28 15 5.03 12 5.54 84 Guatemala 3.31 57 3.36 100 3.26 13 Denmark 5.25 9 5.33 19 5.18 85 El Salvador 3.30 103 2.85 71 3.76 14 Germany 5.22 10 5.32 22 5.12 86 Indonesia 3.30 101 2.85 72 3.74 15 Estonia 5.19 23 4.55 5 5.83 87 Bulgaria 3.30 75 3.20 89 3.39 16 Canada 5.14 16 4.93 17 5.35 88 Thailand 3.28 108 2.77 67 3.79 17 Japan 5.12 8 5.36 31 4.88 89 Albania 3.26 88 2.99 81 3.54 18 Australia 5.01 20 4.61 15 5.41 90 Ecuador 3.25 90 2.97 82 3.52 19 United Arab Emirates 4.94 28 4.13 7 5.75 91 Jamaica 3.23 81 3.10 92 3.36 20 France 4.86 17 4.92 32 4.79 92 South Africa 3.23 51 3.40 112 3.05 21 Luxembourg 4.81 25 4.47 20 5.15 93 Mali 3.17 71 3.23 108 3.11 22 New Zealand 4.81 26 4.47 21 5.15 94 Argentina 3.14 91 2.96 96 3.32 23 Qatar 4.80 33 3.85 8 5.75 95 Trinidad and Tobago 3.12 100 2.87 91 3.37 24 Austria 4.76 22 4.57 29 4.95 96 Bosnia and Herzegovina 3.12 96 2.90 95 3.33 25 Iceland 4.65 24 4.54 33 4.76 97 Romania 3.12 94 2.92 97 3.31 26 Puerto Rico 4.56 21 4.58 37 4.53 98 Serbia 3.09 105 2.83 93 3.36 27 Malaysia 4.52 29 4.02 25 5.02 99 Iran, Islamic Rep. 3.09 106 2.82 94 3.36 28 Belgium 4.51 19 4.67 41 4.34 100 Ghana 3.08 85 3.04 107 3.11 29 Malta 4.50 31 4.00 26 5.01 101 Kuwait 3.04 125 2.60 85 3.47 30 Lithuania 4.49 30 4.01 28 4.96 102 Tajikistan 3.03 111 2.75 98 3.31 31 Saudi Arabia 4.43 42 3.64 18 5.22 103 Guyana 3.02 107 2.80 102 3.24 32 Bahrain 4.39 52 3.39 16 5.38 104 Venezuela 3.01 95 2.91 106 3.11 33 Ireland 4.36 18 4.77 56 3.96 105 Botswana 2.97 114 2.73 103 3.21 34 Chile 4.35 35 3.73 27 4.97 106 Pakistan 2.97 99 2.88 113 3.05 35 Portugal 4.32 36 3.70 30 4.94 107 Cambodia 2.94 124 2.62 101 3.26 36 Spain 4.22 32 3.86 36 4.58 108 Honduras 2.94 98 2.89 114 2.99 37 Kazakhstan 4.18 66 3.28 23 5.09 109 Liberia 2.91 110 2.75 109 3.08 38 Barbados 4.13 27 4.24 52 4.03 110 Ethiopia 2.90 127 2.53 99 3.27 39 Brunei Darussalam 4.07 48 3.43 35 4.71 111 Morocco 2.89 122 2.65 105 3.13 40 Slovenia 4.05 34 3.82 46 4.27 112 Zambia 2.89 115 2.71 110 3.07 41 Oman 4.04 61 3.34 34 4.75 113 Benin 2.88 87 3.01 123 2.75 42 Hungary 4.00 41 3.66 40 4.35 114 Bolivia 2.88 123 2.62 104 3.14 43 Czech Republic 3.97 40 3.66 44 4.28 115 Uganda 2.86 121 2.65 111 3.07 44 Montenegro 3.87 39 3.67 49 4.08 116 Lebanon 2.86 102 2.85 120 2.86 45 Latvia 3.87 38 3.68 51 4.06 117 Mozambique 2.82 116 2.71 117 2.93 46 Uruguay 3.83 53 3.39 45 4.27 118 Nicaragua 2.80 120 2.67 116 2.93 47 Colombia 3.83 70 3.24 38 4.42 119 Cameroon 2.78 104 2.84 126 2.72 48 Panama 3.80 73 3.22 39 4.38 120 Côte d’Ivoire 2.77 93 2.93 129 2.61 49 Costa Rica 3.75 46 3.50 53 3.99 121 Paraguay 2.75 109 2.76 122 2.75 50 Brazil 3.74 50 3.40 48 4.08 122 Namibia 2.75 117 2.70 121 2.80 51 Cyprus 3.73 45 3.50 55 3.97 123 Kyrgyz Republic 2.75 126 2.56 115 2.93 52 Mexico 3.72 72 3.23 47 4.22 124 Malawi 2.73 112 2.74 127 2.71 53 Russian Federation 3.72 54 3.38 50 4.06 125 Burkina Faso 2.72 118 2.70 124 2.74 54 Jordan 3.70 49 3.42 54 3.98 126 Bangladesh 2.71 128 2.52 118 2.90 55 China 3.69 83 3.08 42 4.29 127 Tanzania 2.61 136 2.34 119 2.89 56 India 3.67 43 3.63 73 3.71 128 Zimbabwe 2.55 119 2.68 132 2.42 57 Slovak Republic 3.67 44 3.54 66 3.80 129 Nepal 2.54 135 2.36 125 2.73 58 Mongolia 3.65 86 3.02 43 4.29 130 Suriname 2.53 113 2.74 137 2.33 59 Azerbaijan 3.65 59 3.35 57 3.94 131 Timor-Leste 2.50 132 2.38 128 2.61 60 Italy 3.63 37 3.69 80 3.57 132 Gabon 2.42 129 2.44 133 2.41 61 Rwanda 3.62 58 3.35 61 3.88 133 Sierra Leone 2.42 133 2.37 131 2.46 62 Egypt 3.60 67 3.28 58 3.93 134 Mauritania 2.39 130 2.42 136 2.36 63 Croatia 3.59 55 3.38 68 3.79 135 Madagascar 2.38 139 2.25 130 2.50 64 Turkey 3.54 68 3.26 63 3.82 136 Guinea 2.33 131 2.40 140 2.25 65 Cape Verde 3.53 76 3.20 62 3.86 137 Swaziland 2.33 140 2.25 134 2.40 66 Dominican Republic 3.53 79 3.16 59 3.89 138 Libya 2.32 137 2.33 138 2.31 67 Senegal 3.51 60 3.35 75 3.67 139 Chad 2.30 138 2.33 139 2.26 68 Philippines 3.50 56 3.37 76 3.62 140 Lesotho 2.21 144 2.03 135 2.39 69 Seychelles 3.49 78 3.19 69 3.78 141 Haiti 2.20 134 2.37 142 2.03 70 Sri Lanka 3.47 62 3.33 77 3.62 142 Algeria 2.11 143 2.08 141 2.15 71 Kenya 3.47 47 3.46 84 3.47 143 Yemen 2.08 142 2.20 143 1.96 72 Peru 3.45 77 3.20 74 3.70 144 Burundi 2.06 141 2.23 144 1.90 The Global Information Technology Report 2012 | 15 @ 2013 World Economic Forum
- 40. Chapter 1.1: The Networked Readiness Index 2013 Figure 4: The Networked Readiness Index map Score n 5.4–7.0 (best) n 5.0–5.4 n 4.0–5.0 n 3.3–4.0 n 1.0 (worst)–3.3 n Not covered Note: An interactive version of this map is available at www.weforum.org/gitr. organizational models and 2nd for the impact of ICTs in Gaining one rank, Taiwan, China, enters the top 10. creating new services and products, which highlights Second among the Tigers, Taiwan owes its fast-paced the importance of ICTs for innovation in service-based economic development to ICTs, which have been at economies. the heart of its industrialization since the early 1980s. Denmark ranks 8th overall, yet it is only 4th among In addition to being a major manufacturing base for the Nordics. Down four places, the country worsens its electronics and high-tech products, Taiwan has become showing in almost two-thirds of the indicators comprising an innovation hub. Beyond the ICT sector, technology the NRI. The level of networked readiness remains has permeated the entire society. Usage of ICTs is astounding, however. Denmark tops the individual usage widespread (15th) and their impacts are profound both pillar, boasting some of the highest rates of Internet economically (7th) and socially (6th). On a less positive usage (6th), households with personal computers (6th), note, Taiwan’s performance is undermined by the broadband Internet subscriptions (3rd), and mobile relatively mediocre quality of its political and regulatory broadband subscriptions (6th). environment (33rd), Taiwan’s second-worst pillar rank.5 Down one, the United States slips to 9th place despite a performance essentially unchanged from EUROPE AND THE COMMONWEALTH OF the previous year. This constitutes the country’s INDEPENDENT STATES worst showing since the first edition of the GITR in Several European countries continue to lead the 2001, in which it ranked 1st, although changes to the rankings, showcasing their strong efforts and methodology and in the composition of the NRI over commitment to fully develop and leverage ICTs to time cause the results not to be strictly comparable. boost their competitiveness and the well-being of their The United States now appears in the top 10 of only citizens. As presented in the previous section, seven two pillars, compared with six just one year ago. European countries, led by Finland and Sweden, are The country still possesses many strengths, which positioned within the top 10. Within the European Union, have contributed to making it the world’s innovation while stark intra-regional disparities persist, it is worth powerhouse for decades. However, this leadership is noting that the divergence across Member States in now being contested. The United States ranks only 12th the NRI is significantly narrower than it is in the Global worldwide for the number of PCT patent applications in Competitiveness Index,6 the most comprehensive 2009 and 2010 on a per capita basis. The rate of 134 analysis for measuring the set of policies, institutions, applications per million population is less than half that and factors that drive the productivity of an economy. of leading Sweden (297 applications), Switzerland (285), This reflects the longstanding efforts of the European and Finland (279). 16 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 41. Chapter 1.1: The Networked Readiness Index 2013 Box 1: Sketching the new digital divide The Networked Readiness Index (NRI) aims to measure the Asia, Bangladesh and Nepal show in red, while the Southeast ability of countries to leverage information and communication Asia region presents a slightly brighter image, devoid of red technologies (ICTs) for improved competitiveness and well- and with Malaysia in yellow. The orange color also dominates being. This ability depends on multiple factors, as detailed in in Latin America and the Caribbean. There, Chile, Uruguay, this chapter and reflected in the comprehensive framework Panama, and Costa Rica contribute to a brighter picture, but underpinning the NRI. The NRI results confirm the presence 19 countries score below the mid-point and four of them are of the digital divide between advanced economies on the one coded red (scores lower than 3.3) on the map. The picture is hand and emerging and developing economies on the other. predominantly red across sub-Saharan Africa, where only a Figure 4 presents an intensity map of the world, with handful of nations, including South Africa and Kenya, appear economies color-coded based on their NRI overall score in orange. Mauritius (not shown on the map) is the only one measured on a 1-to-7 scale, with best- and worst-performing of the region’s 33 studied countries to obtain a score above economies appearing in dark green and red, respectively. 4. Finally, the patchwork of colors—from green to red—in The contrast between advanced economies (see Table the Middle East and North Africa (MENA) region betrays its 1 for classification) and the rest of the world is stark and profound diversity. In the NRI rankings, a gap of 111 places betrays the inability or limited capacity of a vast majority of separates Qatar (23rd, with a score of 5.1) from Yemen (139th, countries to fully reap the benefits of ICTs. The green color, 2.6). corresponding to a score of 5 and above, paints parts of In Europe—home to advanced, emerging, and Western Europe, with all Nordics but one painted dark developing economies—the picture is very mixed. A patch green, along with the United States, Canada, Australia, New of yellow stretches almost uninterruptedly from the Iberian Zealand, Japan, and the Asian Tigers. The rest of the map is Peninsula through Italy, Slovenia, the Czech Republic, almost entirely devoid of green. The only exceptions are Israel Poland, and the Baltics on to Russia. Adjacent is a cluster of (in 15th place, with an NRI score of 5.4), Estonia (22nd, 5.1), underperformers, depicted in orange and comprising most of Qatar (23rd, 5.1), and the United Arab Emirates (25th, 5.1)—all the Balkan countries, Romania, and Ukraine. Greece belongs pockets of strong performance in their respective regions, to this group. Sitting 63 places behind Finland, it is the only which are characterized by serious shortcomings. advanced economy, along with the Slovak Republic, to score Although a vast majority of them trail the advanced lower than 4. economies, the developing and emerging economies do Looking in greater detail, Figure A reveals that the digital not draw a homogenous picture—far from it. The map is divide is present across the 10 pillars of the NRI, even though mostly yellow (corresponding to NRI scores between 4 and the average scores necessarily conceal vast differences 5) in Central and Eastern Asia and orange (scores between within the two groups. A traditional conception of the digital 3.3 and 4), with red patches in the Caucasus. The picture is divide tends to focus on differences in terms of infrastructure predominantly orange in the rest of Developing Asia. In South and technological adoption. Despite rapid growth, the divide Figure A: The digital divide in the 10 pillars of the NRI n Emerging and developing economies n Advanced economies 1. Political and regulatory environment 7 10. Social 2. Business and innovation impacts 6 environment 5 4 9. Economic 3. Infrastructure and 3 impacts digital content 2 1 8. Government 4. Affordability usage 7. Business 5. Skills usage 6. Individual usage Note: Pillar scores are measured on a 1-to-7 scale (where 1 is the lowest score and 7 is the highest). (Cont’d.) The Global Information Technology Report 2013 | 17 @ 2013 World Economic Forum
- 42. Chapter 1.1: The Networked Readiness Index 2013 Box 1: Sketching the new digital divide (cont’d.) in these two areas remains high. Of the 10 pillars, same degree of innovation, competition, and attention that infrastructure and digital content and individual usage are contributed to making mobile telephony affordable, useful, the two where the score differentials between advanced and ubiquitous will spread to other technologies. economies and the rest of the world are the biggest (2.7). Figure A reveals that the divide is not limited to mere Although mobile telephony is becoming ubiquitous almost differences in terms of ICT adoption. It extends well beyond, everywhere, figures for Internet usage and broadband access, covering all aspects of networked readiness. In particular, the let alone mobile broadband access and PC ownership, gap is large when it comes to ICT impacts. This is arguably remain low in most parts of the world. the result of biggest concern, as impact is ultimately what Table A reports aggregate penetration rates (weighted really matters. Narrowing this new digital divide will take even by population) for various technologies in the 109 developing more effort than narrowing the gap in ICT access. economies and 35 advanced economies covered by the NRI. In the 2012 edition of the GITR, we had already As of 2011, there were 81 mobile telephony subscriptions per highlighted the digital divide in our analysis. Very little 100 population in the developing economies under review, progress has been made this year toward reducing this not too far from the 111 subscriptions per 100 population divide, with a few exceptions. Several members of the Gulf of advanced economies. However, when it comes to Cooperation Council and the Commonwealth of Independent Internet access, the ratios are much more skewed. Seventy- States have posted significant improvements. But these seven percent of individuals in advanced economies use encouraging developments have only a negligible impact the Internet, about three times as many as in developing on the overall picture and conclusions drawn here. The lack countries (25 percent). The figures for PC ownership yield a of convergence since last year is not surprising given the similar ratio of 3.5 to 1 higher. In terms of mobile broadband complexity and multiplicity of factors driving a country’s subscriptions, the ratio is 7.3 to 1 in favor of advanced networked readiness. It will take time and considerable effort economies. Mobile telephony alone will not allow developing for the developing world to reduce the gap. countries to bridge the digital divide. One must hope that the Table A: Penetration of various technologies, 2011 Developing Advanced All Ratio of advanced to Population-weighted rates economies (109) economies (35) economies (144) developing economies Mobile cellular telephone subscriptions per 100 pop. 81.3 110.7 85.7 1.4 Fixed (wired) broadband subscriptions per 100 pop. 5.1 28.7 8.7 5.7 Active mobile broadband subscriptions per 100 pop. 8.8 64.8 17.0 7.3 Percentage of individuals using the Internet 25.0 77.3 32.8 3.1 Percentage of households with a computer 22.2 77.7 31.2 3.5 Source: Authors’ calculation, based on ITU’s World Telecommunication/ICT Indicators Database 2012 (December 2012 edition). Note: See Table 1 for country classification. Penetration rates are based on the sample of 144 economies included in the NRI. For each technology, economies for which no data are available for 2011 are excluded from the calculation. Union to narrow the digital divide in Europe and build (14th), with one of the highest broadband Internet an internal digital market, as corroborated by the launch subscriptions (8th) in the world, and by businesses (5th) of a new Digital Agenda for Europe,7 one of the seven that are extensively using ICTs in their transactions with flagship initiatives of the European Commission’s Europe other businesses (14th) and with consumers (14th). In 2020 Strategy for growth and jobs for the present addition, the outstanding innovation capacity of the local decade. firms (3rd) coupled with a well-performing educational Within Europe—beyond the Nordic countries, the system (20th) results in the already-mentioned high Netherlands, Switzerland, and the United Kingdom— levels of economic impacts (10th) and in innovation and Germany in 13th place and going up three notches is knowledge-intensive activities (15th). leveraging ICTs quite efficiently, especially in terms of Luxembourg, in 16th place and three ranks higher boosting its economic impacts for competitiveness, than last year, continues to improve its ICT infrastructure where it scores within the top 10. The country continues (12th) and its strong uptake by individuals, businesses, to boast a highly developed ICT infrastructure (10th), and government. Since identifying ICTs as one of the which translates into a high uptake by individuals crucial sectors needed to diversify its economy and 18 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 43. Chapter 1.1: The Networked Readiness Index 2013 improve efficiency in other crucial sectors, such as the fall (127th), as this seems to affect mobile phone financial sector, Luxembourg’s government’s strong subscriptions (50th) and especially mobile broadband vision (5th) in upgrading ICT uptake has resulted in subscriptions (56th). Furthermore, the government could one of the world’s highest rates of Internet users (5th) expand its offerings of online services (39th), notably the and households with a personal computer (3rd) and facilities to increase citizens’ online participation (81st), an Internet connection (6th). Notwithstanding these which remains below the EU average. achievements, the economic impacts of ICTs (25th) to Despite a drop of three positions, France—in 26th boost innovation, while improving, still remains below place—achieves a good and harmonious uptake of ICTs other very advanced economies, the result of some across all different agents in society and achieves strong weaknesses in an innovation system that has recently economic impacts (17th), thanks to a good skill base been developed. Further strengthening the country’s (21st). Overall, ICT infrastructure and digital content has national innovation capacity would thus yield better continued to improve (28th) and, although a bit more results for the ICT infrastructure and uptake that is costly to access (86th), overall use has remained high, already world class. with the government significantly expanding its offerings Within the top 20, as last year, Austria places 19th, of online services (8th). On a less positive note, a slight with a rather stable profile. The country continues to deterioration in the business and innovation environment exhibit a very strong ICT infrastructure and digital content (39th), along with a high tax system (130th), can (9th) that, coupled with a good skill base (24th), allows potentially impede future ICT-related startups. for a strong individual uptake (19th), with high rates of Portugal and Spain, despite their current economic Internet users (15th) and extensive use of the Internet for difficulties, maintain their positions in the rankings at economic transactions between businesses (3rd) and 33rd and 38th place, respectively. Both countries have with consumers (16th). Moreover, the country’s long- managed to develop a solid ICT infrastructure (34th and lasting investments in innovation and the integration of 31st, respectively), which has resulted in relatively good ICTs in this favorable ecosystem result in good economic levels of ICT uptake by most stakeholders. This is the impacts (22nd). On a less positive note, Austria continues case especially for Spain, where both the government’s to suffer from high tax rates (120th) and cumbersome offerings of online services (23rd) and Internet broadband procedures (97th) to open a business, which can hinder subscriptions (26th), including mobile broadband (25th), the ability of existing and new businesses to appear and are high and close to those of other Western European grow. economies despite the high cost of mobile telephony Once again, Estonia ranks as the highest Central (132nd). In both cases, the economic impacts that could and Eastern European country, in 22nd place, gaining accrue from ICTs are somewhat jeopardized because of two positions in the rankings. The strong vision of its weaknesses in their innovation systems and the quality government (23rd) and its success (14th) in developing of their educational systems (94th and 97th, respectively), ICTs as one of the critical industries for the local which limit the capacity of businesses to innovate (40th economy continues to yield good impacts (15th), both and 44th, respectively) and, therefore, hinder the needed in economic (23rd) and social (5th) terms, where the economic transformation of both countries toward country depicts one of the strongest performances higher-knowledge-intensive activities (53rd and 37th, across the globe. Following the example of the Nordic respectively). countries, Estonia has managed to develop a strong In Southeastern Europe, Slovenia, stable in 37th ICT infrastructure and encourage a strong uptake by place, continues its regional leadership in terms of citizens (23rd), by businesses in their transactions leveraging ICTs. With a well-developed ICT infrastructure with other businesses and government (15th), and by and a good skill base (36th) despite some quality the government (23rd), which continues to expand its concerns in the educational system (63rd), the country offerings of online services. Going forward, the country has obtained high levels of ICT penetration, with could benefit even further by strengthening its innovation Internet users reaching close to three-quarters of the system, which still suffers from some weaknesses and population (28th) and a high level of broadband Internet limits the private sector’s capacity to innovate (33rd) and subscriptions (24th), despite the relatively high cost of thus benefit from the full potential that ICTs can offer. ICT access (85th). In order to improve the economic Belgium, in 24th place—two notches down from impacts of ICTs (34th), Slovenia should continue last year—continues to leverage ICTs strongly to obtain strengthening its rather pro-business environment while high economic impacts (19th) thanks to a well-developed addressing some of the weaknesses of its innovation ICT infrastructure (18th), a world-class educational system, such as the lack of available venture capital system (3rd), and an innovation and entrepreneurship- (113th). This rather positive outlook contrasts with prone environment (18th) that allows for a fairly high the situation of other countries in the region, such as innovation capacity in local firms (11th). In order to Bosnia and Herzegovina and Serbia in 78th and 87th keep boosting ICT uptake, mobile cellular tariffs should positions, respectively, which reflect a yet insufficiently The Global Information Technology Report 2013 | 19 @ 2013 World Economic Forum
- 44. Chapter 1.1: The Networked Readiness Index 2013 developed ICT infrastructure and uptake and weak the perception of a lack of coherent government vision innovation systems that hamper their capacity to fully to boost ICTs (118th) and the limited role that ICTs play in leverage ICTs to boost competitiveness. organizing economic transactions between businesses Stable in 42nd place, the Czech Republic (101st) and between businesses and consumers (83rd). continues to strive in terms of a well-developed ICT These factors, coupled with the persistent weaknesses infrastructure (23rd) and high penetration in terms of in the innovation system (69th) and in the quality of individual usage (29th), with many Internet users (27th) education (87th), are hindering the country’s capacity to and mobile broadband subscriptions (21st), despite the leverage ICTs better and obtain higher economic and high cost of ICTs (99th). As a result, e-commerce, both social impacts. between businesses (23rd) and between businesses and As in Italy, the rapid deterioration of the political consumers (8th), is well developed. On a less positive and regulatory environment (103rd), the lack of a note, and although governmental online services have government vision to boost ICTs (138th), and the stark increased, they remain relatively low (53rd). Going weaknesses in the national innovation system that hold forward, the country could benefit more from ICTs to back the capacity of local firms to innovate (104th) boost innovation (82nd) and raise competitiveness by have resulted in Greece’s drop of five positions, down addressing some of the current weaknesses in the to 64th place. The current economic difficulties have innovation system, such as limited venture capital (84th). slightly affected the country’s otherwise fairly well Other countries in Central Europe—such as Hungary, developed ICT infrastructure (46th), mainly in terms Poland, and the Slovak Republic in 44th, 49th, and of international Internet bandwidth (51st), although 61st place, respectively—have also remained stable individual uptake (43rd) has improved, notably in the with little variation in the rankings, despite relatively well number of Internet users (51st). In terms of obtaining developed ICT infrastructures and penetration rates. better returns for national ICT investments, the country However, serious weaknesses in their innovation systems will need to address the already-mentioned weaknesses hinder their capacity to properly integrate their digital in its innovation system and improve the quality of its development into a well-performing ecosystem that educational system (115th). allows for higher innovation rates. In addition, Bulgaria Within the Commonwealth of Independent States, and Romania, in 71st and 75th place, respectively, close several countries have fully recognized the potential the EU rankings, with lower rates of ICT uptake and of ICTs to leapfrog and diversify their economies, and unstable environments that impede their potential for important progress has been recorded since last year. higher economic and social returns. Leading the region, Kazakhstan depicts a strong Turkey, in 45th place, ascends seven notches performance with a rise of 12 positions to 43rd place. in the rankings, thanks to an overall improvement in Improvements virtually across the board—led by a strong its political and regulatory framework (54th) and in its government vision (35th) that continues to develop the business and innovation environment (43rd); a significant ICT infrastructure (63rd) and supports stronger ICT improvement in developing crucial ICT infrastructure, uptake—as evidenced by the number of Internet users such as international Internet broadband capacity (42nd); (62nd), along with households with a personal computer and, above all, a drop in tariffs to access ICTs (4th), (63rd) and those with Internet access (55th), which which have allowed for higher ICT penetration in terms have almost doubled since the last observation—have of broadband subscriptions (56th) and Internet users driven this good result. Notwithstanding this progress, (69th). Notwithstanding this progress, the country still the economic impacts (66th) accruing from a higher suffers from an insufficiently developed skills pool (81st), use of ICTs remain modest in their ability to spur new the result of a low secondary education enrollment services or products (92nd) and raise the national rate (88th) and a poor educational system (100th) that competitiveness, mainly because of a low capacity for hamper the capacity of the country to fully leverage local innovation (92nd), an educational system that is ICTs to boost innovation and raise national productivity deemed insufficient for the challenges ahead (101st), levels. Addressing these weaknesses while improving weaknesses in the political and regulatory environment government online tools to boost citizens’ participation (77th), and some concerns about the functioning of the could help the country increase both its economic and judicial system (94th). social impacts going forward. The Russian Federation, overtaking China as the A drop of two places leaves Italy in 50th position. leading large emerging economy, rises two positions to Deterioration in the country’s political and regulatory 54th place thanks to improvements in higher rates of environment (95th) and a relative stagnation in its general ICT uptake, with growing numbers of Internet progress toward improving its ICT infrastructure (40th), users (57th) and, especially, a spectacular increase boosting a higher ICT uptake, and consequently in mobile broadband subscriptions (20th) that has obtaining higher economic and social impacts have multiplied exponentially, as almost half of the population resulted in this small decline. Overall, it is worth noting now benefit from it. Despite this progress, the country 20 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 45. Chapter 1.1: The Networked Readiness Index 2013 continues to suffer from low rates of e-business (107th), cases—such as Cambodia and the Philippines—from a a weak political and regulatory framework (108th), and low base. a poor business and innovation environment (90th) that The Republic of Korea (11th) gains one rank and affects its capacity to further leverage ICTs to boost its now stands in the doorway of the top 10. The country’s economy and benefit from higher rates of products and performance is particularly lopsided. Korea ranks 32nd service innovation (123rd). and 23rd in the environment subindex and the readiness Azerbaijan, in 56th place, continues its ascension subindex, respectively. By contrast—and remarkably in the rankings as a result of an improvement in its enough—it places 4th in the usage subindex and 5th in ICT infrastructure, especially in terms of international the impact subindex. Internet bandwidth capacity (64th), that—coupled with The lowest-ranked Tiger economy, Hong Kong affordable prices (20th)—result in higher rates of ICT SAR, places 14th overall. Its performance is arguably uptake. This is seen in rising numbers of broadband more balanced than those of Taiwan and Korea: Hong subscriptions (53rd), including mobile broadband (50th), Kong ranks no lower than 30th in nine of the ten pillars.8 which has rapidly expanded in the past year. Despite The most positive aspect is its 2nd rank in the business these significant advances in boosting the national and innovation environment pillar, just behind Singapore. connectivity, economic and social impacts (59th) could ICT usage is widespread (20th), and Hong Kong holds be further enhanced if the current weaknesses in the record for the most mobile telephone subscriptions fostering innovation and entrepreneurship (86th) and per capita, with 215 for every 100 population. increasing the quality of the educational system (109th) Australia occupies the 18th rank, one notch were addressed. lower than a year ago. The county’s performance is Within the region, Georgia and Armenia—showing undermined by a poor score in the affordability pillar. some of the highest gains in our rankings, of 23 and Although most of the 19 main ICT service categories 12 positions, respectively—reach 65th and 82nd place, are fully liberalized, average prices of mobile telephony respectively. They are joined by Ukraine and Tajikistan and Internet remain very high by international standards, with more moderate rises of two positions to 73rd and earning Australia the 97th rank in this category. 112th place, respectively, in this overall regional positive Ahead of its neighbor in the previous edition of the trend. On a less positive note, the Kyrgyz Republic, at NRI, New Zealand drops six places to 20th, two lower 118th, has not managed to join its neighbors in better than Australia this year. The quality of its regulatory leveraging ICTs to boost its economic competitiveness. and business environment is outstanding, earning New Zealand the 2nd spot in the environment subindex, ASIA AND THE PACIFIC just behind Singapore. In particular, the transparency Asia is home to some of the wealthiest economies and and efficiency of its institutions are among the world’s some of the most successful development stories in best. The excellent skill base of the population (6th) also the world, but also to some of the poorest countries. A contributes to the country’s high degree of readiness. As similarly profound diversity characterizes Asia’s digital for most advanced economies featuring high in the NRI, landscape, thus making it impossible to draw a uniform the affordability pillar (100th) is New Zealand’s only real picture of the region. The most digitized and innovative weakness. economies—the Asian Tigers—co-exist in the region One of the world’s most prolific innovators, Japan with some of the least-connected ones. Nowhere else ranks a disappointing 21st overall and is down three does the regional digital divide run so deeply. Regardless spots from the previous edition. A number of important of their position on the development ladder, all Asian shortcomings in the environment subindex, including red economies have much to gain from increased networked tape, prevent the country from playing a leading role in readiness. It will allow populations of the least-advanced the NRI. The biggest competitive advantage of Japan is countries to gain access to much-needed basic services, without doubt its innovative and sophisticated business improved government transparency and efficiency, sector (2nd). Technology and innovation have greatly and—for the most advanced, many of which suffer from contributed to making Japan one of the most productive anemic economic growth—it will contribute to boosting economies worldwide. But beyond the tremendous their innovation capacity. The NRI reveals that in the case impact of technology on the economy, it has not had of Asia’s best-performing economies, the governments an important impact on society at large (31st). A more typically lead the digital effort, unlike in Europe. At the conducive institutional framework, including a renewed heart of Asia, and representative of its immense diversity, commitment by the government, could usher in new the Association of Southeast Asian Nations (ASEAN) drivers of growth for Japan. is fairly dynamic. Led by Singapore, all eight ASEAN Despite losing one rank, Malaysia (30th) remains members covered by the NRI improve their overall score the best-ranked economy in Developing Asia. Trying and a majority progress in the rankings, albeit in some to emulate the success of Korea and other Asian Tigers, the Malaysian government has been pursuing The Global Information Technology Report 2013 | 21 @ 2013 World Economic Forum
- 46. Chapter 1.1: The Networked Readiness Index 2013 a long-term transformation plan with the ambition of and corporate tax at 62 percent of profit is among achieving high-income status by the end of the decade, the highest in the world. Other variables within the with ICTs playing a critical role. Most government- environment subindex are better assessed, including the related indicators reflect this commitment, and Malaysia availability of new technologies (47th), the availability of places 7th in the government usage pillar. Businesses venture capital (26th), the intensity of local competition are quite aggressive at adopting technology and are (34th), and the quality of management schools (33rd). increasingly innovative. The government-led efforts seem A critical determinant of a country’s readiness, India’s to be starting to have a transformational impact on the literacy rate is among the lowest in the sample at 63 economy (29th) and the society at large (25th). Areas of percent (121st). On the other hand, intense competition weaker performance include infrastructure (73rd) and in the sector and innovations for the “bottom of the individual usage (46th), owing to the relatively low rates of pyramid” have made India the leader in the affordability adoption of the latest technologies. pillar, thus providing a significant boost to its readiness. China posts a fall of seven places in the rankings Partly owing to the weaknesses noted above, adoption this year, and occupies the 58th position overall and of ICTs remains dismally low in India, as reflected in its second among the BRICS countries,9 falling below 121st rank in the individual usage pillar. Although mobile Russia (54th). To better leverage ICTs, China faces telephony is becoming ubiquitous, only one person in important challenges across the board. Its institutional ten uses the Internet regularly. Accessing it at broadband framework (56th), and especially its business speed remains the privilege of a very few, with a single environment (105th), present serious shortcomings fixed broadband Internet subscription for every 100 that stifle entrepreneurship and innovation, including population. Mobile broadband access has already excessive red tape, high taxes (127th), and questionable become more widespread, with two subscriptions per intellectual property protection—for instance, almost 100 population. By contrast, businesses are early and 80 percent of installed software in China is estimated assiduous adopters of new technologies (40th). And to be pirated. Our study also points to the limited or the government is placing a lot of emphasis on ICTs as delayed availability of new technologies (107th) despite a way to address some of the country’s most pressing the presence of pockets of technological excellence issues, including job creation, corruption and red tape, in certain sectors and regions of the country. In terms and education. Whether this vision will translate into a of readiness, the country ranks a low 83rd in the transformation of the economy and society remains to infrastructure and digital content pillar, mainly because be seen. But already ICTs are having an—albeit small— of its underdeveloped Internet infrastructure, especially transformational impact on the economy, which is partly in certain rural areas that do not benefit from the rapid reflected in India’s performance in the economic impacts development experienced in urban centers. China gets pillar (43rd). high marks in the affordability and skills categories, Thanks to a two-place improvement, Sri Lanka placing 40th and 53rd, respectively. Looking at actual (69th) now trails its neighbor by just one rank, even ICT usage (58th), penetration rates remain quite low in though the country fails to improve its score. Sri Lanka absolute terms but should be considered in the light and India are the only two countries in the South Asia of the sheer size of the country and the large rural Association for Regional Cooperation (SAARC) population. A mere 40 percent of individuals use the group to rank higher than the 100th mark. A huge gulf Internet on a regular basis. There are 12 fixed broadband separates them from other SAARC members Pakistan Internet subscriptions for every 100 population; mobile (105th, down three), Bangladesh (114th, down one), and broadband Internet is nearly as widespread, with 10 Nepal (126th). subscriptions per 100 population. By contrast, ICT usage Within ASEAN, Thailand (74th) leads a group of among businesses is extensive (35th). China is becoming four members that do not leverage ICTs to their full more and more innovative, and this in turn encourages potential. Trailing by more than 70 and 40 places behind further and quicker adoption of technologies. The Singapore and Malaysia, respectively, Thailand exhibits a government is placing great hopes in ICTs to boost number of weaknesses across the board. The highlights productivity and, ultimately, growth. Its efforts in of its performance are the relative affordability of ICTs promoting and using ICTs are reflected in China’s strong (45th), in particular mobile telephony, and the quality of showing in the government usage pillar (38th). its business and innovation environment (52nd). However, With a performance essentially unchanged from in this latter category as elsewhere, Thailand alternates the previous edition, India progresses one rank to good and poor assessments. Aside from mobile 68th. India’s performance remains very mixed. The telephony, other technologies remain relatively scant, most worrisome aspects are the mediocre quality of translating to a middling 88th rank in the individual usage the political, regulatory, and business environment pillar. Also the institutional environment does not seem (85th), as well as its lack of digital infrastructure (111th). to be particularly conducive (81st) and the government Extensive red tape stands in the way of businesses, does not appear to be particularly ardent at pushing 22 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 47. Chapter 1.1: The Networked Readiness Index 2013 the digital agenda nationwide (86th). In this dimension, Twenty places behind the Philippines and closing the satisfactory ranks obtained in both the Government the rankings among ASEAN countries, Cambodia Online Service Index (64th) and E-Participation Index (106th) improves its showing by two ranks. The country (46th) conceal relatively low marks (0.51 and 0.32, ranks beyond the 100th mark in six of the ten pillars of respectively, on a 0-to-1 scale). the NRI. Amid this mostly gloomy picture, the fact that ASEAN’s most populous country, Indonesia, it shows progress on approximately two-thirds of the advances by four ranks and climbs to 76th place. The indicators is encouraging. affordability pillar is where Indonesia ranks the highest (39th). Elsewhere, its most positive features are found LATIN AMERICA AND THE CARIBBEAN in the usage subindex, where Indonesia improves Digitally connecting the hemisphere remains one of by no less than 15 places to reach 70th position. In the key challenges for the region, as recognized during particular, the country ranks an impressive 40th for the Sixth Summit of the Americas, which took place business usage. Companies are quick at absorbing in Colombia in April 2012.10 While several countries— the latest technologies and are becoming increasingly including Panama, Mexico, Colombia, and El Salvador— innovative. Mobile telephony is already ubiquitous, but have made remarkable improvements that are clearly other technologies exhibit spectacular growth rates, reflected in important gains in the scores and rankings though from a very low base (92nd in individual usage of the NRI, overall, Latin America and the Caribbean pillar, up 11). For instance, mobile broadband technology still suffers from a serious lag that prevents it from increased more than tenfold between 2010 and 2011, fully leveraging the potential of ICTs to boost regional reaching 22 subscriptions per 100 population (48th). productivity. The social and, most remarkably, economic Also, Indonesians are notoriously very assiduous users of impacts accruing from ICTs remain low in comparison virtual social networks (only 51st, but with an impressive to other regions, despite government-led efforts to score of 5.7 on a 1-to-7 scale). Finally, a 17-place jump develop and upgrade ICT infrastructure and despite in the government usage also contributes to the positive governments’ increasing use of Internet to communicate trend. Unfortunately, these positive results do not—yet— and interact with individuals and the business translate into similar progress in the various measures community. Weaknesses in the political and regulatory of ICT impact, earning Indonesia a low 86th rank in this environment, the existence of large segments of the subindex, unchanged from a year ago. population with a low skill base, and poor development With a performance essentially unchanged from the of the innovation system are all factors hindering the previous year, Vietnam loses one rank to place 84th. potential that ICT developments could have on the As for most ASEAN countries, the affordability pillar regional economy. constitutes the best aspect of Vietnam’s performance Chile, in 34th place and up this year by five (38th). For the rest, many shortcomings are present in positions, remains once again the country within all dimensions of the NRI. Perhaps the most worrisome Latin America that is making the strongest efforts to aspect is the poor overall quality of the political, leverage ICTs to boost its competitiveness and increase regulatory, and business environments. As a result, civil participation. In the past year, the country has Vietnam ranks a disappointing 97th in the environment continued its attempts to strengthen ICT infrastructure subindex. Such lack of conduciveness is not only and increase connectivity and the use of the Internet detrimental to ICT development, but also seriously (50th)—although still far from the values of more undermines the country’s competitiveness in general. advanced economies, this depicts one of the highest Second to last within ASEAN, the Philippines scores for this set of indicators in the region. In addition, remains in 86th position despite a significant the government has continued to increase its offerings improvement in its overall score. The country manages of online services (24th) and supports the online active to boost its marks where it is the most desperately participation of its citizens (19th) in the decision-making needed, namely the environment subindex. Up 11 spots process. That, coupled with its entrepreneurial-friendly year to year, the Philippines still ranks a dismal 100th in and efficient legal framework, result in relatively high this dimension, the very last among ASEAN countries. values in terms of economic (35th) and especially social In particular, the extent of red tape remains alarming (27th) impacts accruing from ICTs. Notwithstanding despite some progress, and the Philippines is among this favorable outlook, the economic impacts of ICTs in the worst worldwide in several related indicators. On terms of boosting technological and non-technological a much more positive note, the country ranks 68th in innovation are not yet fully leveraged because of some terms of ICT impacts (up 16). The role of ICTs in creating important and recurring weaknesses in the quality of the new products and services (43rd) and organization educational system (91st) and a relatively low capacity to models (33rd) is not negligible and contributes to this innovate (83rd). Boosting innovation and improving the encouraging result. quality of education for all segments of the population should be the two key areas to strengthen going forward The Global Information Technology Report 2013 | 23 @ 2013 World Economic Forum
- 48. Chapter 1.1: The Networked Readiness Index 2013 to keep supporting Chile’s transition toward higher-value- thus not allowing local businesses to rely on a high added economic activities. capacity to innovate (74th). Second, the quality of the With its slight drop of four positions, Barbados educational system (107th), while one of the best in remains one of the best performers in the region thanks the region, does not seem to provide the skills that mainly to its outstanding educational system (7th) and are increasingly demanded by local firms. As a result very high connectivity, both in terms of ICT infrastructure and going forward, continuing the good progress in and digital content (38th) and in its level of Internet increasing ICT uptake should be accompanied by further users (30th), despite the still-high cost of accessing ICTs efforts to strengthen the local innovation system in order (111th). In addition, the country boasts a relatively efficient to obtain greater economic impacts that can boost environment for ICT development and uptake (36th) national competitiveness. that widely supports the high levels of individuals (26th) Costa Rica, together with Panama, remains the and businesses (43rd) using ICTs in their transactions. leader in ICT uptake in Central America and climbs However, the government seems to lag behind in fully five positions in the rankings to 53rd place. Overall, leveraging the potential of ICTs. Despite recognition of its the country has continued its efforts to develop its vision for developing ICTs (36th), the offerings of online very affordable (6th) ICT infrastructure, especially in services for citizens and businesses (95th), as well as terms of improving its international Internet bandwidth the opportunities for citizen participation (111th), remain capacity (40th) that, coupled with a well-performing limited. Addressing these weaknesses and strengthening educational system (21st), allows for an overall strong ICT the overall innovation capacity of indigenous firms (91st) readiness (33rd). However, ICT uptake, especially among would allow Barbados to benefit more from ICTs. individuals (71st), remains relatively low. Moreover, Panama continues its steady ascent in the rankings, concerns in the political and regulatory framework rising 11 positions to 46th place. The country’s strategy (74th)—notably in terms of the time needed to enforce to fully develop ICTs as one of the key factors driving contracts (122nd) and in the business and innovation its productivity and supporting crucial sectors of its environment (94th), with excessive red tape (132nd) economy, such as logistics and banking, seems to needed to start a business—also affect the national be paying off. Further efforts to address long-lasting capacity to leverage ICTs even further to boost national structural weaknesses in terms of the quality of competitiveness. education (112th) and innovation (94th) will be crucial Rising five positions since last year thanks to going forward; these weaknesses are also taking a toll improvements in ICT infrastructure (62nd) and ICT uptake on the potential economic impacts (73rd) accruing from (44th), Brazil is now in 60th place. In the past year, the ICTs. Overall, the clear, firm vision of the government country has more than doubled its international Internet (20th) to continue its efforts to develop its national ICT bandwidth capacity per user (47th) and expanded its infrastructure are reflected in the doubling of international mobile network coverage to its entire population. As a Internet bandwidth capacity (36th) and in the number result, ICT uptake by individuals has sharply increased of households with a computer and Internet connection (58th) in virtually all dimensions analyzed in the NRI. (77th). While still low in comparison with international Notwithstanding this progress, expanded coverage’s standards, these improvements have led to a higher ICT translation into greater economic impacts in terms of uptake by all agents in the society. innovation and higher competitiveness has somewhat Despite a decline in the rankings, Uruguay, in 52nd stagnated (50th). This is mainly the result of important place, remains one of the Latin American countries that weaknesses in the business and innovation environment is leveraging ICTs better to obtain meaningful economic (126th), which still suffers from excessive red tape and social impacts. Overall, the country continues to and burdensome procedures, and the quality of the develop its ICT infrastructure, expanding its international educational system (116th), which does not seem to Internet bandwidth capacity (44th). It now enjoys full provide the necessary skills for a rapidly changing mobile network coverage for its entire population (1st), economy in need of a wider talent pool. although this remains relatively costly (80th), especially Mexico experiences a sharp rise of 13 positions in terms of mobile cellular tariffs (94th). Overall, the to attain 63rd place in the rankings, driven mainly by efforts to expand ICT uptake in the population continue government efforts to deeply develop its offerings to improve and, for the first time, more than half of the of online services (28th), increase its citizens’ population is using the Internet (53rd) and benefiting participation to support their government (25th), and from one of the highest school Internet access rates an overall improvement in the business and innovation in the world (15th). Notwithstanding these important environment. Despite these important steps forward, the strengths, the economic impacts of ICTs, especially in country has made less progress in further developing supporting Uruguay’s transition to a more knowledge- its ICT infrastructure (82nd) and significantly reducing based economy (67th), face two primary limitations. First, its access costs (63rd), notably in terms of mobile the local innovation system is insufficiently developed, telephony (102nd). As a result, ICT uptake in terms of 24 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 49. Chapter 1.1: The Networked Readiness Index 2013 Internet users (78th) or households with Internet access Finally, Paraguay (104th), Venezuela (108th), Bolivia has not progressed. This, coupled with a skills shortage (119th), and Haiti (141st) close the regional rankings. (87th) because of the low quality of the educational These four countries fall behind others in the region system (100th), has resulted in little progress in terms of because of important ICT connectivity weaknesses and economic impacts accruing from ICTs (72nd). Adopting an innovation-adverse environment that prevents high and implementing a holistic digital agenda that could economic impacts that would result from innovation and boost the development and uptake of ICTs and their the economic transformation of these countries toward inclusion in a more robust innovation system could help knowledge-intensive activities. address some of these important weaknesses and provide better results. SUB-SAHARAN AFRICA Colombia ranks in 66th place, seven notches Sub-Saharan Africa has continued to make significant up since last year, thanks to efforts to drive prices efforts to build its ICT infrastructure, as reflected by of fixed broadband Internet tariffs (75th) down that important improvements in developing its broadband have resulted in an increase in the number of Internet infrastructure and the expansion of its mobile network users (70th); and thanks also to the continued effort, coverage. As a result, ICT usage, while still very low, led by the government, to increase the number of has picked up slightly, as seen especially by an increase available online services (16th) and the support for in the number of Internet users and the continued raising citizens’ online participation (11th). Despite these commitment of some governments in the region to remarkable improvements, the country still suffers from expand the number of available online services. Despite an underdeveloped ICT infrastructure and digital content this positive trend, the stubbornly high sharp digital (96th), along with a political and regulatory framework divide from more advanced economies, notably in terms (92nd) and a business and innovation environment (95th) of ICT-driven economic and social impacts, persists. that hampers the country’s capacity to fully leverage A still-costly access to ICT infrastructure and relatively ICTs for competitiveness. The result is limited economic low levels of skills with low educational attainments and impacts (70th). unfavorable business conditions for entrepreneurship A lack of progress in upgrading a rather costly and innovation are hindering the region’s capacity to fully access (114th) to national ICT infrastructure has caused leverage the potential of the increasingly available ICT Argentina to fall seven positions to 99th place. The infrastructure. As a result, only two countries—Mauritius country boasts fairly good results in terms of international (55th) and South Africa (70th)—are positioned in the top Internet bandwidth capacity (52nd) and high levels of half of the rankings, while nine out of the bottom ten educational enrollment, notably at the tertiary level (21st). belong to the region. However, the poor business climate for entrepreneurship Mauritius, in 55th place, two down from last year, and innovation (110th) and weaknesses in the political continues to lead by far the regional classification thanks and regulatory environment are hindering the country’s to a fairly strong political and regulatory framework (36th) potential to obtain greater economic impacts (91st) and and the government’s strong vision (48th) to build and move the national economy toward more knowledge- deploy ICTs as one of the three key strategic priority intensive activities (82nd). sectors for the development of the national economy. Despite going up three places in the rankings Overall, the country has continued to build its ICT to 103rd place, Peru continues to lag significantly structure, ensuring that it becomes affordable in order in terms of leveraging ICTs to modernize its national to support a stronger uptake from all agents in the economy. Even with a government push to increase the country. As a result, broadband Internet subscriptions number of online services and a reduction in the cost (60th) and Internet users (81st) have slightly increased, of accessing broadband Internet (107th), insufficient although the results also show that the use of ICTs progress in developing the national ICT infrastructure for transactions between businesses (48th) is more (86th) has resulted in the relative stagnation of ICT extended than it is for individuals (92nd). The impacts uptake, notably in terms of the number of Internet users of ICTs remain modest (80th), despite the presence of (77th) and households with computers (82nd) or an a business-friendly environment (46th), mainly because Internet connection (83rd). Moreover, notwithstanding its an insufficiently developed innovation capacity (112th) relatively pro-business environment (57th), weaknesses hampers the country’s capacity to fully leverage ICTs to in the political and regulatory environment (121st), the boost innovation and competitiveness. poor quality of its educational system (132nd), and Going up two positions, South Africa is in 70th its low capacity to innovate (103rd) are factors that place. Despite a sharp improvement in the development are hampering the country’s ability to obtain greater of its ICT infrastructure (59th)—notably in terms of economic impacts and allow the national economy to international Internet bandwidth capacity (66th)—and transition toward higher-value-added activities. a strong uptake by the business community (33rd), the ICT impacts (92nd), particularly the social ones The Global Information Technology Report 2013 | 25 @ 2013 World Economic Forum
- 50. Chapter 1.1: The Networked Readiness Index 2013 Box 2: Charting the increasing returns to ICTs and skills investments In the past decade, as ICTs have become ubiquitous, policies factors that influence the results. Against this backdrop, a aimed at assessing and monitoring ICTs have shifted their correlation analysis could shed some preliminary light on focus from determining the level of connectivity of a country the relationship that may exist between a particular set of to determining the benefits that this connectivity can yield investments and the expected returns on it. Figure A presents in terms of the positive impacts to boost competitiveness the relationship between the scores in the impacts subindex and well-being. Understanding, identifying, and measuring and the readiness subindex showings of the NRI. all the potential impacts of ICTs are not easy tasks, notably As can be seen, the relationship between the scores but not only because of a lack of data. The NRI has made of the two subindexes, while positive, does not seem to be an important first step toward getting a better handle on the fully linear but rather denotes an exponential relationship, benefits accruing from ICTs so that countries can improve suggesting that the higher the ICT readiness of a country is, national innovation, enable the shift of national economic the proportionally higher the economic and social impacts structures toward higher-value-added activities, improve are. In other words, the correlation analysis suggests not government efficiency, and expand citizens’ access to basic only that a cumulative effect of readiness on ICTs and skills services and a broader civil participation. investments exists, but also that a minimum threshold in Moreover, this policy shift toward assessing the impacts complementary investments—such as direct investments in of ICTs has gained importance in the current economic ICT infrastructure and skills—may also exist for a country to context, where many developed economies face serious start attaining meaningful and raising economic and social financial and economic difficulties and where governments impacts. and firms are forced to control their budgets more tightly. For These findings bear some important policy these reasons, governments and businesses face the stark consequences both for developing and developed need to quantify the returns to different investment options. economies. For the former, a minimum set of investments in Similarly, developing economies must choose between building an ICT infrastructure and developing the necessary different investment opportunities in order to render their skill base for its optimal exploitation is needed in order to economic growth more stable and sustained over time. obtain results. This may take several years of continued Running an econometric model to test the causality or investment. For the latter, it seems that investments in ICTs provide an accurate estimate of the returns on any public and skills development have the potential to yield increasing investment is statistically challenging because of the difficulty returns by boosting innovation for productivity gains and in accounting for the totality of the potential results and enhancing societal well-being. isolating the individual contribution of the many interrelated Figure A: Correlation analysis between the NRI 2013 impact subindex and the readiness subindex 7 6 R² = 0.7382 Impact subindex score, 1–7 scale 5 4 3 2 1 1 2 3 4 5 6 7 Readiness subindex score, 1–7 scale Source: Authors’ calculations. 26 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 51. Chapter 1.1: The Networked Readiness Index 2013 (112th), remain limited. The perception of a lack of unfavorable framework conditions for innovation and clear government vision (105th) to orchestrate and entrepreneurship result in a poor performance in terms implement a holistic ICT strategy for the country, coupled of leveraging ICTs to boost innovation and raise national with deficiencies in the educational system for some productivity. segments of the population (102nd), play negatively in this process and outweigh a rather positive political and MIDDLE EAST AND NORTH AFRICA regulatory framework for ICT development (21st) and This region boasts one of the most diverse pro-business environment (55th). performances in the world. On the one hand, Israel and Already in the second half of the rankings and several Gulf Cooperation Council states have sharply falling six positions this year, Rwanda is in 88th place. improved their overall performances and have continued This drop is the result of a certain stagnation in ICT their investments to make ICTs one of the key national infrastructure development (105th) and uptake in industries that attempt to diversify and transform their society (139th), despite the strong government vision economies. On the other hand, several North African of developing the ICT industry as a priority (10th) and and Levantine nations have either fallen—or stagnated, in its efforts to increase the number of available online the best cases—in their efforts to leverage ICTs as part services, which nevertheless remain low (103rd). Overall, of their economic and social transformation toward more ICT impacts remain limited (61st) because of poor ICT knowledge-intensive activities and open societies. infrastructure (105th) that is costly to access (116th) Israel, in 15th position, consolidates its regional and impedes ICT uptake in society. Moreover, a weak leadership and climbs five places since last year. skill base (113th), together with large segments of the Important gains derived from improving its ICT population who remain illiterate (115th) and a low tertiary infrastructure by increasing its international Internet education enrollment rate (123rd), also affect Rwanda’s bandwidth (39th), coupled with government efforts to capacity to fully leverage ICTs to boost innovation expand the number of online services (15th) and online and competitiveness, despite the presence of a fairly information and participatory tools to raise the citizens’ sophisticated, stable, and strong political and regulatory overall participation (7th), have led to this positive environment for the development of ICTs (13th). performance. The country continues to boast one of In East Africa, Kenya at 92nd place climbs one the highest rates of ICT patents (4th), which reflects the position this year. Overall, despite the government’s importance of the sector in the national economy, and an strong vision for developing ICTs (28th), the country’s environment that is highly conducive to innovation and overall readiness (110th) remains low because of entrepreneurship (15th), despite the lengthy time it still insufficient development of an infrastructure (110th) that takes to open a business (90th) and to enforce contracts is costly to access (105th), combined with a weak skill (124th). In order to continue leveraging the full potential of base (93rd) that suffers from low secondary enrollment ICTs efficiently, and notwithstanding its high secondary rates (109th) and high level of illiteracy (97th). In addition (26th) and tertiary (32th) education enrollments, the to addressing these weaknesses to increase its digital country should aim at improving further the quality of connectivity, the country needs to improve its business the educational system (53rd)—notably in the fields of and innovation environment (106th) in order to fully mathematics and science (89th)—despite certain poles leverage ICTs and boost their positive impacts (71st) in of excellence. the economy and society. Also in East Africa, Uganda, Leading the Arab world, Qatar (23rd) rises five Zambia, and Tanzania—in 110th, 115th, and 127th places in the rankings thanks to the government’s place, respectively—suffer from strong connectivity gaps sharp effort to expand its offerings of online services and environments that lack the conditions to allow for a (27th) and increase the online participation of citizens full leverage of the benefits of ICTs. (22nd). Moreover, mobile broadband subscriptions have Ghana goes up two positions to 95th place, though exploded, leaping from 9.6 percent last year (43rd) to the country still must overcome serious handicaps to 70.3 percent this year (11th). While fixed broadband fully leverage ICTs. Its insufficient ICT infrastructure and affordability remains a pending issue (108th)—which digital content development (121st), coupled with a weak may affect the level of broadband Internet subscriptions skill base (106th), result in a poor digital usage across (62nd)—the overall level of penetration and use of ICTs all agents (102nd) and, inevitably, in low economic and (16th) is high. That, coupled with the government’s social impacts (100th). strong vision and its commitment to rapidly develop ICTs Finally, several countries in West and South Africa, (2nd) as a means to diversify its economy, along with its despite a wider proliferation of mobile technologies efforts to create a business-friendly environment (12th) than in past years, are positioned at the bottom of the to spur entrepreneurship, have resulted in this strong rankings—the consequence of insufficient development overall assessment. Going forward, in order to translate of ICT infrastructure that hinders their ICT uptake the existing good ICT uptake into stronger economic and results in a poor digital connectivity. Moreover, impacts (33rd), the country should continue investing The Global Information Technology Report 2013 | 27 @ 2013 World Economic Forum
- 52. Chapter 1.1: The Networked Readiness Index 2013 in increasing the level of university enrollment (108th) (102nd), provides the right ingredients for properly so it can benefit from a higher local talent pool and leveraging ICT and obtaining significant positive strengthen its overall innovation system. economic (42nd) and social (18th) impacts. Moving The United Arab Emirates goes up five places to forward, skills development—by improving the quality of 25th position. As part of the country’s long-term strategy the educational system, especially for math and science to diversify its economy, the government has continued (37th), and by boosting educational enrollment, especially to drive the development of the ICT industry decisively at tertiary level (70th)—should become a priority. This and to expand the use of ICTs to all segments of the would expand the local pool of talent and contribute to economy and society (1st). Available government online the transition toward a less resource-dependent and services (9th), as well the online participation of citizens more knowledge-intensive economy (59th). (11th) and the important rise in mobile broadband With a score identical to last year, Jordan remains subscriptions (49th), have driven this rise in the rankings. stable in 47th place, leading the group of Levantine Overall—despite the high fixed broadband Internet tariffs states where Lebanon ranks in 94th place, one (99th), which may be affecting the number of broadband position up from last year. ICT infrastructure (81st), Internet subscriptions (52nd)—the country’s investments notably international bandwidth capacity (97th), remains in increasing its ICT infrastructure, especially in terms a challenge for Jordan, and despite the efforts to of international Internet bandwidth (49th) and skills liberalize the market and render access to the existing upgrading (25th), have provided the right conditions for infrastructure affordable (27th), ICT uptake by individuals a higher ICT uptake in the past year (23rd). Although (66th) remains low, especially in terms of broadband the country continues to boast a very favorable subscriptions (87th). business environment (17th) despite its excessive and Stable at 62nd place, Kuwait continues to lag cumbersome, complex process for enforcing contracts behind in the region in terms of leveraging ICTs, with (137th), increasing the economic impacts of ICTs (28th) low levels of both social (85th) and, especially, economic in terms of more innovation and higher-value-added impacts (125th). Despite a very sharp rise ICT uptake activities will require higher levels of tertiary education in terms of Internet users (26th) and households with (84th) and a consolidation of efforts to strengthen the computers (38th), as well as Internet access (44th), the national innovation system. country still suffers from a shortage of skills (71st). This With a fairly stable profile, dropping two positions shortage, coupled with a low capacity to innovate (113th) to 29th place, Bahrain continues to depict a robust and an environment that is less business friendly (71st) performance. That assessment has been slightly than those of other Gulf Cooperation Council states, affected by the perception of a certain stagnation in result in the low economic impacts. terms of the skills development that is crucial to enable In North Africa, Egypt boasts the strongest the transition of the local economy toward higher- performance in this year’s rankings in 80th place, value-added activities. Overall, the strong government one notch down from last year. ICT infrastructure leadership for the extensive use and development of ICTs (98th) remains underdeveloped, especially in terms of in the country (4th) has allowed a fairly well developed expanding international Internet bandwidth capacity ICT infrastructure (39th), especially in terms of mobile (114th). In spite of strong efforts to render its access network coverage (1st) and despite a low international affordable (8th), the penetration of ICTs in society is Internet bandwidth capacity (73rd). Although the country modest (69th) although improving, especially in terms counts on a fairly sophisticated business environment of Internet users (73rd). Strengthening the technological (14th), boosting the economic impacts derived from ICTs capacity of local firms (86th), upgrading available (52nd) will require continued support to strengthen the skills (115th), and creating a more business friendly overall innovation system, especially at the business environment (98th) could result in greater economic level, which retains a very low capacity (117th). impacts (67th) and contribute to stimulating the growth Saudi Arabia, in 31st place, goes up three notches and job opportunities the country needs. in the rankings this year. This rise is driven mainly by a Morocco, at 89th position, moves two notches up fall in the cost of using ICTs (65th), a strong government in the rankings. At present, the country does not seem effort to expand the amount and quality of available to be able to fully leverage ICTs to boost the desired online services (19th), and the creation of an environment economic (122nd) and social impacts (105th). A low skill in which citizens can increase their participation to base (114th)—the result of a poor educational system support government (22nd). The government’s clear (105th), low adult literacy (130th), and low secondary vision of the potential of ICTs to modernize and diversify (113th) and tertiary education (103rd) enrollment rates— the local economy (7th) has resulted in a fairly well and a weak innovation capacity (115th) are at the very developed ICT infrastructure (36th) that, together with basis of this inability. In addition, poor infrastructure a business-friendly environment (25th) and despite development (95th), despite being affordable (30th), the still-cumbersome process for starting a business results in fairly low levels of ICT uptake by individuals 28 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 53. Chapter 1.1: The Networked Readiness Index 2013 (67th). Moving forward, addressing these weaknesses infrastructure and higher rates of ICT uptake. In other will enable the country to benefit more fully from the regions, such as Latin America and Africa, progress in potential positive impacts that ICT could bring, which improving digital connectivity has been slower. In the would enable it to further modernize its national large emerging BRICS economies, progress has also economy and improve its innovation and competitiveness been relatively slow, with China dropping in the rankings capacity. and with India, the Russian Federation, and Brazil Falling 13 places, Algeria in 131st position recording only small gains. continues to display weak leverage of ICT, with one of Furthermore, large intra-regional differences exist. the lowest economic (143rd) and social (141st) impacts In Latin America, for example, Panama has rapidly in the sample. A poor ICT infrastructure (119th) coupled developed its ICT infrastructure and improved its ICT with a weak skill base (101th) result in very low levels uptake rates. This trend has accentuated the stark intra- of ICT usage by all agents (140th), most markedly by regional disparities that appear in virtually all regions businesses (144th). In addition, severe weaknesses and across developed and developing countries. Asia, in its political and regulatory framework (141st) and for example, is home to some of the world’s most the absence of a business- and innovation-friendly successful economies in the digital landscape, while environment (143rd) act as strong filters that hinder the others continue to suffer from profound structural capacity of any positive impacts to accrue. weaknesses and an underdeveloped ICT infrastructure. In Europe, the gap between the most advanced CONCLUSIONS Nordic economies that lead the global rankings and The world has changed a lot in the 12 years since the those countries in Southern and Central and Eastern first edition of the GITR. The Internet bubble is now a Europe is remarkable—and alarming—despite the many thing of the past, and many developing and emerging efforts to create an internal digital market and improve economies have become global technological and the digital connectivity of converging countries. This economic players achieving higher growth than more finding highlights the need to adopt harmonious and advanced economies, which continue to struggle to comprehensive strategies that do not focus only on emerge from one of the worst economic crises since improving access to ICTs. While important, access is the 1930s. At the same time, the world has become only one ingredient in the recipe for success. Improving increasingly hyperconnected, where the immediateness the ecosystem for spurring entrepreneurship and and a sense of constant accessibility are changing strengthening the conditions that enhance innovation are economic and social relations as well as opening a wide also crucial to boost competitiveness and well-being, to range of new opportunities for new products, services, enhance economic growth, and to create jobs. and business models. Unsurprisingly, both developed Finally, the nonlinear relationship between the and developing economies have turned to ICTs as a digital readiness of a country and its economic and toolbox that can potentially boost competitiveness, social impacts suggests the existence of increasing growth, and employment in this rapidly changing and returns to ICTs, skills, and innovation investments. In uncertain context. However, the relationships among other words, the more that countries invest in ICTs, skill these objectives are complex and the interplay and development, and innovation, the proportionally higher co-evolution of the many different factors render it returns they achieve. Conversely, the relationship also sometimes difficult for stakeholders to understand, seems to point to a certain readiness threshold that measure, and track progress and make decisions. may hinder the ability of certain countries to achieve For more than a decade, the NRI has aimed at any meaningful results if they do not invest sufficiently in shedding light on these relationships with the adoption these dimensions. of a comprehensive framework that analyses the With the GITR series and the NRI, the World determinants that drive the capacity of societies to Economic Forum provides a comprehensive analytical benefit from ICts and transform themselves. framework for assessing not only the progress made Against this backdrop, the analysis of the ICT in raising ICT connectivity in different countries, but landscape—thanks to the NRI results—reveals that in also—and more importantly—in obtaining the desired the past year, little progress has been made in bridging economic and social impacts that higher connectivity the new digital divide in terms of benefiting from higher can yield in generating growth and high-quality economic and social impacts accruing from ICTs. employment in a rapidly changing context. Designed Emerging and developing economies still trail significantly and produced as a framework for multi-stakeholder behind more advanced nations. However, the situation is dialogue, it also serves to identify and define policies not homogenous across all regions, with some countries and measures that can catalyze change toward better in the Community of Independent States, the Gulf leveraging ICTs and achieve its full potential. Cooperation Council, and ASEAN recording impressive progress, especially in terms of strengthening their ICT The Global Information Technology Report 2013 | 29 @ 2013 World Economic Forum
- 54. Chapter 1.1: The Networked Readiness Index 2013 NOTES 1 Jipp 1963. 2 Katz 2012, p. 2. 3 Katz 2012, p. 3. 4 For detailed information of the Forum’s Executive Opinion Survey, including the instrument, coverage administration, data edition, and score computation, refer to the dedicated chapter in The Global Competitiveness Report 2012–2013, available at www. weforum.org/gcr. 5 The assessment of Taiwan’s networked readiness is based on partial data because a number of international organizations provide only limited data. 6 See World Economic Forum 2012. 7 See the European Commission’s Digital Agenda, available at http://ec.europa.eu/digital-agenda/. 8 The assessment of Hong Kong’s networked readiness is based on partial data because of its limited coverage by a number of international organizations. 9 BRICS economies is a term used to refer to a group of five large emerging economies: Brazil, the Russian Federation, India, China, and South Africa. 10 See http://www.summit-americas.org/default_en.htm. REFERENCES European Commission. Digital Agenda for Europe: A Europe 2020 Initiative. Available at http://ec.europa.eu/digital-agenda/. ITU (International Telecommunication Union). 2012. World Telecomunication/ICT Indicators Database (December 2012 edition.) Available at http://www.itu.int/ITU-D/ict/publications/ world/world.html. Jipp, A. 1963. “Wealth of Nations and Telephone Density.” Telecommunications Journal (July): 199–201. Katz, R. 2012. The Impact of Broadband on the Economy: Research to Date and Policy Issues. ITU Broadband Series, April. Geneva: ITU. Available at http://www.itu.int/ITU-D/treg/broadband/ITU-BB- Reports_Impact-of-Broadband-on-the-Economy.pdf. World Economic Forum. 2012. The Global Competitiveness Report 2012–2013. Geneva: World Economic Forum. Available at www. weforum.org/gcr. 30 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 55. Appendix A: Structure and computation of the Networked Readiness Index 2013 This appendix presents the structure of the Networked NETWORKED READINESS INDEX 2013 Readiness Index 2013 (NRI). As explained in the chapter, Networked Readiness the NRI framework separates environmental factors Index = 1/4 Environment subindex from ICT readiness, usage, and impact. That distinction + 1/4 Readiness subindex is reflected in the NRI structure, which comprises four + 1/4 Usage subindex + 1/4 Impact subindex subindexes. Each subindex is in turn divided into a number of pillars, for a total of 10. The 54 individual indicators used in the computation of the NRI are distributed among the 10 pillars. ENVIRONMENT SUBINDEX In the list below, the number preceding the period Environment subindex = 1/2 Political and regulatory indicates the pillar to which the variable belongs (e.g., environment + 1/2 Business and innovation indicator 2.05 belongs to the 2nd pillar; indicator 8.03 environment belongs to the 8th pillar). The numbering of the indicators matches the numbering of the data tables at the end of 1st pillar: Political and regulatory environment the Report. 1.01 Effectiveness of law-making bodies* The computation of the NRI is based on successive 1.02 Laws relating to ICTs* aggregations of scores, from the indicator level (i.e., the 1.03 Judicial independence* most disaggregated level) to the overall NRI score (i.e., 1.04 Efficiency of legal system in settling disputes*c 1.05 Efficiency of legal system in challenging the highest level). Unless noted otherwise, we use an regulations*c arithmetic mean to aggregate individual indicators within 1.06 Intellectual property protection* each pillar and also for higher aggregation levels (i.e., 1.07 Software piracy rate, % software installed pillars and subindexes).a 1.08 Number of procedures to enforce a contractd Throughout the Report, scores in the various 1.09 Number of days to enforce a contractd dimensions of the NRI pillars are reported with a 2nd pillar: Business and innovation environment precision of two decimal points. However, exact figures 2.01 Availability of latest technologies* are always used at every step of the computation of the 2.02 Venture capital availability* NRI. 2.03 Total tax rate, % profits Variables that are derived from the World Economic 2.04 Number of days to start a businesse 2.05 Number of procedures to start a businesse Forum’s Executive Opinion Survey (the Survey) are 2.06 Intensity of local competition* identified here by an asterisk (*). All the other indicators 2.07 Tertiary education gross enrollment rate, % come from external sources, as described in the 2.08 Quality of management schools* Technical Notes and Sources section at the end of the 2.09 Government procurement of advanced technology Report. These variables are transformed into a 1-to-7 products* scale in order to align them with the Survey’s results. We apply a min-max transformation, which preserves the order of, and the relative distance between, scores.b The Global Information Technology Report 2013 | 31 @ 2013 World Economic Forum
- 56. 1.1: The Networked Readiness Index 2013 READINESS SUBINDEX IMPACT SUBINDEX Readiness subindex = 1/3 Infrastructure and digital content Impact subindex = 1/2 Economic impacts + 1/3 Affordability + 1/2 Social impacts + 1/3 Skills 9th pillar: Economic impacts 3rd pillar: Infrastructure and digital content 9.01 Impact of ICTs on new services and products* 3.01 Electricity production, kWh/capita 9.02 PCT ICT patent applications per million population 3.02 Mobile network coverage, % population 9.03 Impact of ICTs on new organizational models* 3.03 International Internet bandwidth, kb/s per user 9.04 Employment in knowledge-intensive activities, % 3.04 Secure Internet servers per million population workforce 3.05 Accessibility of digital content* 10th pillar: Social impacts 4th pillar: Affordabilityf 10.01 Impact of ICTs on access to basic services* 4.01 Mobile cellular tariffs, PPP $/min. 10.02 Internet access in schools* 4.02 Fixed broadband Internet tariffs, PPP $/month 10.03 ICT use and government efficiency* 4.03 Internet and telephony sectors competition index, 0–2 10.04 E-Participation Index, 0–1 (best) (best) 5th pillar: Skills 5.01 Quality of educational system* NOTES 5.02 Quality of math and science education* a Formally, for a category i composed of K indicators, we have: 5.03 Secondary education gross enrollment rate, % K 5.04 Adult literacy rate, % ⌺ indicatork k=1 categoryi ϭ K USAGE SUBINDEX When two individual indicators are averaged (e.g., indicators 1.04) and 1.05 in the 1st pillar), each receives half the weight of a normal Usage subindex = 1/3 Individual usage indicator. + 1/3 Business usage + 1/3 Government usage b Formally, we have: country score – sample minimum 6th pillar: Individual usage 6 x ( sample maximum – sample minimum ) + 1 6.01 Mobile phone subscriptions per 100 population 6.02 Percentage of individuals using the Internet The sample minimum and sample maximum are, respectively, the lowest and highest country scores in the sample of economies 6.03 Percentage of households with computer covered by the GCI. In some instances, adjustments were made 6.04 Households with Internet access, % to account for extreme outliers. For those indicators for which 6.05 Fixed broadband Internet subscriptions per 100 a higher value indicates a worse outcome (i.e., indicators 1.07, population 1.08, 1.09, 2.03, 2.04, 2.05, 4.01, and 4.02), the transformation 6.06 Mobile broadband Internet subscriptions per 100 formula takes the following form, thus ensuring that 1 and 7 still corresponds to the worst and best possible outcomes, population respectively: 6.07 Use of virtual social networks* country score – sample minimum 7th pillar: Business usage –6 x ( sample maximum – sample minimum ) + 7 7.01 Firm-level technology absorption* 7.02 Capacity for innovation* c For indicators 1.04 and 1.05, the average of the respective scores is used in the computation of the NRI. 7.03 PCT patent applications per million population 7.04 Business-to-business Internet use*g d For indicators 1.08 and 1.09, the average of the respective 7.05 Business-to-consumer Internet use*g normalized scores is used in the computation of the NRI. 7.06 Extent of staff training* e For indicators 2.04 and 2.05, the average of the respective normalized scores is used in the computation of the NRI. 8th pillar: Government usage 8.01 Importance of ICTs to government vision of the future* 8.02 Government Online Service Index, 0–1 (best) 8.03 Government success in ICT promotion* 32 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 57. 1.1: The Networked Readiness Index 2013 f The affordability pillar is computed as follows: the average of the normalized scores of indicators 4.01 mobile cellular tariffs and 4.02 Fixed broadband Internet tariffs is multiplied by a competition factor, the value of which is derived from indicator 4.03 Internet and telephony sectors competition index. It corresponds to the score achieved by an economy on this indicator normalized on a scale from 0.75 (worst) to 1.00 (best), using the min-max transformation described above. A normalized score of 0.75 is assigned to an economy with a competition index score of 0, which means that a monopolistic situation prevails in the 19 categories of ICT services considered. A normalized score of 1.00 is assigned to an economy where all 19 categories are fully liberalized. Where data are missing for indicator 4.03 (i.e., Puerto Rico and Timor-Leste), the score on the affordability pillar, which is simply the average of the normalized scores of indicators 4.01 and 4.02, is used. For example, Tanzania obtains a score of 1.00 on the competition index. This translates into a competition factor of 0.875, which multiplies 2.944, corresponding to the average of Tanzania’s normalized scores on the two tariff measures. Tanzania’s score on the affordability pillar therefore is 2.576 (130th). The competition index score for Taiwan, China, was derived from national sources. g For indicators 7.04 and 7.05, the average of the respective scores is used in the computation of the NRI. For Albania, Ecuador, Georgia, Rwanda, and Sri Lanka, these two indicators are replaced by an indicator derived from the 2010 and 2011 editions of the Executive Opinion Survey. The associated question was: “To what extent do companies in your country use the Internet for their business activities? (e.g., buying and selling goods, interacting with customers and suppliers) [1 = not at all; 7 = extensively].” Results for these countries are presented in The Global Information Technology Report 2012 (p.371) available at www.weforum.org/gitr. The Global Information Technology Report 2013 | 33 @ 2013 World Economic Forum
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- 59. CHAPTER 1.2 Digitization—the mass adoption of connected digital services by consumers, enterprises, and governments— Digitization for Economic has emerged in recent years as a key economic driver that accelerates growth and facilitates job creation. In Growth and Job Creation: the current environment of a sluggish global economy, digitization can play an important role in assisting Regional and Industry policymakers to spur economic growth and employment. Booz & Company’s econometric analysis estimates Perspectives that, despite the unfavorable global economic climate, digitization provided a US$193 billion boost to world KARIM SABBAGH economic output and created 6 million jobs.1 ROMAN FRIEDRICH However, the impact of digitization by country BAHJAT EL-DARWICHE and by sector is uneven. Developed economies enjoy MILIND SINGH higher economic growth benefits by a factor of almost ALEX KOSTER 25 percent, although they tend to lag behind emerging Booz & Company economies in job creation by a similar margin. The main reason for the differing effects of digitization is the economic structures of developed and emerging economies. Developed countries rely chiefly on domestic consumption, which makes nontradable sectors important. Across developed economies, digitization improves productivity and has a measurable effect on growth. However, the result can be job losses because lower-skill, lower-value-added work is sent abroad to emerging markets, where labor is cheaper. By contrast, emerging markets are more export-oriented and driven by tradable sectors. They tend to gain more from digitization’s effect on employment than from its influence on growth. Policymakers can harness these varying effects of digitization through three main measures, which go beyond their current roles of setting policy and regulations. First, they should create digitization plans for targeted sectors in which they wish to maximize the impact of digitization. Second, they should encourage the development of the necessary capabilities and enablers to achieve these digitization plans. Finally, policymakers should work in concert with industry, consumers, and government agencies to establish an inclusive information and communication technologies (ICT) ecosystem that encourages greater uptake and usage of digital services. DIGITIZATION’S ECONOMIC IMPACT Throughout the world, ICTs continue to proliferate at breakneck speed, but their effects are uneven across countries and sectors. In late 2011, the number of mobile telephones in the United States exceeded the country’s population. By early 2012, the number of mobile lines worldwide was more than 6 billion—nearly as many as the global population of around 7 billion. Internet The authors wish to thank the following for their contributions to this chapter: Raul Katz, Columbia Business School; Pantelis Koutroumpis, Imperial College, London; and Rawia Abdel Samad, Oussama Ahmad, and Sandeep Ganediwalla of Booz & Company. The Global Information Technology Report 2013 | 35 @ 2013 World Economic Forum
- 60. 1.2: Digitization for Economic Growth and Job Creation years. The most advanced economies (North America Box 1: Measuring digitization and Western Europe) accounted for approximately 29 percent of the output gain, but just 6 percent of the Booz & Company’s Digitization Index is a composite score that calculates the level of a country’s digitization using 23 employment impact. Emerging economies accounted indicators to measure the following six key attributes: for 71 percent of the gain in gross domestic product (GDP) and 94 percent of the global employment impact • Ubiquity: The extent to which consumers and enter- prises have universal access to digital services and (Table 1). applications. • Affordability: The extent to which digital services are Impact on GDP per capita priced in a range that makes them available to as Our analysis reveals that an increase of 10 percent in a many people as possible. country’s digitization score fuels a 0.75 percent growth • Reliability: The quality of available digital services. in its GDP per capita. As an economic accelerant, digitization therefore is 4.7 times more powerful than the • Speed: The extent to which digital services can be accessed in real time. 0.16 percent average impact of broadband deployment on per capita GDP, according to several previous • Usability: The ease of use of digital services and the ability of local ecosystems to boost the adoption of studies.2 Additionally, the economic effect of digitization these services. accelerates as countries move to more advanced stages of digitization. Digitally constrained economies • Skill: The ability of users to incorporate digital services into their lives and businesses. receive the least benefit, largely because they have yet to establish an ICT ecosystem that can capitalize on the The Digitization Index measures a country’s level benefits of digitization. of digitization on a scale of 0 to 100, with 100 signifying In 2011, East Asia, Western Europe, and Latin the most advanced, to identify its distinct stage of digital development: constrained, emerging, transitional, or America received the greatest total GDP per capita advanced. impact from digitization, surpassing North America. The Source: Sabbagh et al., 2012. impact of digitization improvements in East Asia and Latin America was higher than that in North America and Western Europe, even though these regions have lower GDP impact coefficients. This is because the economies penetration is not as deep, but with global Internet in East Asia and Latin America are still at the transitional access growing more than fivefold in recent years, and stage and were able to achieve the biggest digitization with increases of more than 20-fold during the past leaps. Eastern Europe and Africa benefited the least from decade in regions such as the Middle East and Africa, a their digitization gains in terms of their impact on GDP. similar ubiquity may not be far off. Access to ICT services is no longer the primary Impact on unemployment issue facing policymakers. Instead, the critical question is Digitization creates jobs, with a 10 point increase in how to maximize the adoption, utilization, and impact of the digitization score leading to a 1.02 percent drop in these services. Digitization has emerged as a key driver the unemployment rate. This is 4.6 times greater than and enabler of socioeconomic benefits. the effect that the widespread adoption of broadband In 2012, Booz & Company set out to quantify the has on reducing unemployment; broadband cuts the impact of digitization by creating an index that scores unemployment rate by just 0.22 percent.3 digitization by country (Box 1). This analysis allows us to In 2011, digitization had the greatest employment go beyond anecdotal evidence of the effect of digitization effect in constrained and emerging digitized economies. to measure its level and the actual impact it has on East Asia, South Asia, and Latin America received the economic and social factors. The research highlights most employment growth of all regions, with more the notion that countries that have increased their than 4 million jobs created as a result of these regions’ digitization level have realized gains in their economies, digitization improvements. Conversely, digitization their societies, and the functioning of their public sectors. provided little employment growth in North America and Indeed, the more advanced a country becomes in Western Europe. These advanced-stage economies terms of digitization, the greater the benefits—increased probably realize fewer employment benefits because, as digitization yields improving returns. These effects their digitization increases, their productivity improves; are not evenly distributed by the level of economic some jobs get replaced by technology; and lower-value- development or by the sector. added, labor-intensive tasks go overseas to emerging The ability of digitization to boost output and markets where labor is cheaper. employment has measurable global effects. Digitization By contrast, digitization has more significant has provided an additional US$193 billion to the world employment effects in emerging markets for three economy and 6 million jobs worldwide over the past two main reasons. First, the digitization gain in some 36 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 61. 1.2: Digitization for Economic Growth and Job Creation emerging regions is higher than it is in the advanced Table 1: Digitization’s impact on GDP and jobs, 2011 economies. Second, some of these regions have very Regional impact large populations (e.g., China and India), which means GDP impact Number of that a marginal improvement in the unemployment rate Region (US$ billions) jobs created leads to a large number of jobs. Finally, offshoring grows Africa 8.3 618,699 in tandem with digitization. As companies in digitally Commonwealth of Independent States 11.8 340,820 East Asia and the Pacific 55.8 2,370,241 advanced countries improve their productivity thanks Eastern Europe 7.0 159,015 to digitization, they transfer jobs to digitally emerging Latin America and the Caribbean 27.0 636,737 countries. Middle East and North Africa 16.5 377,772 North America 25.3 167,650 South Asia 9.4 1,117,753 DIGITIZATION’S SECTORAL IMPACT Western Europe 31.5 213,578 To understand the marked differences in impact Total 192.6 6,002,266 that digitization has in terms of productivity and job Source: Booz & Company analysis. creation across emerging and developed economies, we first need to understand how digitization affects the functioning of any enterprise. A typical company’s has enabled companies to move labor-intensive functions can be broken down into four areas: business, tasks to emerging economies while competing to go-to-market, production, and operations. Digitization develop the best design and user interface. For has a profound and accelerating impact across these example, Samsung acts as a supplier to Apple for strategies. its iPhone products, but both compete aggressively in the consumer market by trying to differentiate • Business: Digitization is fundamentally reshaping themselves in their design and user interface. business models. It is lowering barriers to entry Digitization is also leading to the emergence of new and expanding market reach for enterprises. manufacturing technologies, with the advent of 3-D For example, it is possible for Skype to provide printing creating a new way to manufacture complex telephony to more than 500 million users globally products and leading to the import of jobs back to using voice over Internet protocol (VoIP) technology, developed economies. fundamentally disrupting business models for operators worldwide and forcing many to launch • Operations: Finally, digitization has had the greatest their own VoIP business models in response. impact on the way companies organize and operate to generate competitive advantage. Digitization has • Go-to-market: Digitization is changing how created more global entities, seamlessly in touch companies build brands and products, across continents, and has redefined the concept of communicate, and provide services to their office space. One in four American workers regularly customers. Companies are increasingly relying telecommutes, a fact that has a profound impact on on social media to build brands. More and more, how companies organize and manage resources. subscribers are forming their purchase opinions Digitization is also allowing companies to outsource online, even for items that they then buy offline. or completely automate a number of their back-end Close to 40 percent of those online actually use functions, enabling them to become more efficient. the web to research items that they buy in physical outlets. Digitization is also enabling companies The type and extent of the impact that digitization to create products tailored to customers’ tastes. has on a sector of the economy is determined mainly For example, BMW offers a build-your-own-BMW by the interaction of the four impacts outlined above. online service, which allows for more than a million For example, if digitization significantly enhances market different combinations in the finished product. access, then job growth will be more likely in that sector. The role of the web as a retail channel is causing However, if digitization primarily drives efficiency growth substantial disruptions, with companies significantly but does not lead to new market creation, then that expanding market reach, leading to the emergence sector is likely to lose jobs. of new winners and losers. Starting from roughly To better understand these dynamics, we examined the same position in 2001, Amazon.com grew its five key economic activities in developed markets that annual sales from US$3.1 billion to US$48 billion in would yield conclusions that can guide policy responses. 2011, while the brick-and-mortar retailer Borders lost We identified these five areas by initially dividing the market share and ultimately filed for bankruptcy. overall economy into three major sectors: primary, secondary, and tertiary.4 The primary sector relates • Production: Digitization is also changing the way to agriculture, farming, and mining—the extraction, companies manage their production assets. It collection, and primary processing of natural materials. The Global Information Technology Report 2013 | 37 @ 2013 World Economic Forum
- 62. 1.2: Digitization for Economic Growth and Job Creation Figure 1: Digitization impact on output, productivity, and employment 1a: Impact by industry, developed markets 1b: Employment growth by industry, closely knit economies (2006–08) Industry Industry Industry output productivity employment United States Mexico Sector (% growth) (% growth) (implied) Sector (% growth) (% growth) Financial Financial Financial service service 1.98 2.82 t service –3 16 Manufacturing Manufacturing 1.19 1.79 t Manufacturing –5 2 Retail Retail 1.34 0.71 s Retail 2 5 Services Services 1.27 1.00 s Services 2 7 Hospitality Hospitality 1.52 0.41 s Hospitality 2 13 Source: Booz & Company. Notes: Services refers to overall services other than financial services. Data for 1a are from six OECD countries: Australia, Germany, Norway, Sweden, the United Kingdom, and the United States. These data are based on a 10 percent increase in digitization. The secondary sector encompasses manufacturing—the added in Germany between 2010 and 2011 came making, building, and assembling of finished products. from increased digitization. There is a clear relationship The tertiary sector provides services to consumers between productivity gains and job losses, as shown by and businesses and includes retailers, transportation the results for financial services and manufacturing. By and entertainment companies, banks, and healthcare contrast, other subsectors increased employment and providers. output, although their productivity grew at a slower pace We focused our analysis on subsectors in the (Figure 1). secondary and tertiary sectors, where activities affected As digitization increases, financial services gain by digitization tend to cluster—financial services, the most in terms of output and productivity. Increased manufacturing, retail, and hospitality (digitization has digitization, however, cut jobs in financial services and less effect on the primary sector). We also looked at manufacturing because productivity gains surpassed the impact on the overall services sector. We looked at output gains. Conversely, digitization created jobs in these subsectors in six advanced-digitization countries— services subsectors, with particularly notable gains in the which are also developed economies and members hospitality and retail subsectors. of the Organisation for Economic Co-operation and Although there are insufficient data to study how Development (OECD)—Australia, Germany, Norway, digitization leads to job creation in certain sectors in Sweden, the United Kingdom, and the United States. emerging markets, evidence from two closely knit Our econometric analysis used three industry metrics: economies—the United States and Mexico—illustrates output, productivity, and employment. Output measures the overall trend (Figure 1b). Financial services and the subsector’s contribution to GDP. Productivity manufacturing businesses in the Unites States shed jobs determines the subsector’s level of value-added per because they were able to transfer labor-intensive or employee. Employment tracks the number of workers in support activities to Mexico, where labor costs are lower. each subsector. Companies took advantage of offshoring for operations, This analysis allows an understanding of how logistics, customer care, legal, and communications the positive national effect of digitization plays out services. The productivity gains in financial services and differently in economic subsectors. For example, we manufacturing were a result of this ability to decrease estimate that, in Germany, approximately 8.7 percent of labor costs while increasing output. The net result the rate of change in GDP between 2010 and 2011 is was a 6 percent decline in the number of jobs in the attributable to advances in digitization. Its contribution US tradable sectors between 2002 and 2009 and a to employment was lower: 7.7 percent of the jobs 38 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 63. 1.2: Digitization for Economic Growth and Job Creation Figure 2: Sector digitization plans and capability design needs: Digital market makers’ approach Design sector digitization plans Build capabilities and enablers Jump-start and monitor ecosystem National Right-to-win vision capabilities PRIORITY SECTORS CAPABILITIES Retail Hospitality Development Facilitation Prioritized Capabilities sectors Financial Healthcare Financing Manufacturing Others ICT Sector ENABLERS TRADE-OFFS Capital Infrastructure Impact Demand Job Productivity creation gain Skills Governance Source: Booz & Company. concomitant 15.2 percent increase of employment in POLICY IMPLICATIONS tradable sectors in Mexico during the same years.5 As the spread and depth of digitization increases The effect on retail—rising employment with some globally, so do its roles as a key driver of growth output and productivity growth—demonstrates how and as a source of national competitive advantage. a proper measurement of digitization is superior to Policymakers have focused until now on improving the anecdotal evidence. A superficial look indicates that reach and affordability of ICT services—most recently small retailers are closing because of online shopping. facilitating, and even investing in, large-scale broadband Instead, advancing digitization in retail actually creates deployment. Though important, this is just one part of new markets and new employment opportunities. the story. Policymakers in the future need to become Retailers are expanding internationally. As their reach digital market makers—creators of a digital economy that spreads, their supply chains become more complex provides its citizens, enterprises, and economic sectors and require more people to manage them. The impact with the competitive advantage essential to thrive in an on the hospitality industry is similar, with new business increasingly global market. models emerging and new markets created. Digitization Becoming a digital market maker requires allows for improved inventory management and higher policymakers to undertake three activities: designing occupancy rates, both of which are useful when dealing sector digitization plans, building capabilities, and with nonfungible items such as airline seats or hotel jump-starting and monitoring the wider digitization rooms. ecosystem (Figure 2). In designing sector digitization The extent of productivity gains experienced by plans, policymakers should seek to develop competitive the subsectors is also highly correlated to the extent of advantage and generate jobs in sectors that are already digitization seen in these sectors. In Booz & Company’s critical to the national economy. Policymakers should 2011 publication, Measuring Industry Digitization: then foster the development of capabilities and enablers Leaders and Laggards in the Digital Economy, we necessary to achieve these digitization plans. Finally, established that the most digitized sector is financial policymakers should work in concert with industry, services, followed by manufacturing, retail, and consumers, and government agencies to jump-start and hospitality.6 Productivity impact in these sectors follows continuously monitor an inclusive digitization ecosystem the same order, with financial services leading the pack that will encourage the uptake of digital applications in and hospitality benefitting the least from the sectors these sectors and that will keep them competitive. covered. The Global Information Technology Report 2013 | 39 @ 2013 World Economic Forum
- 64. 1.2: Digitization for Economic Growth and Job Creation Design sector digitization plans If there are opportunities and the private sector is The rapidly accelerating pace of digitization means that undertaking the necessary activities, the state can play policymakers are not in a position to be able to spread the role of a facilitator—a role with functions that range their efforts across all sectors. First they must determine from being a regulator to being a demand stimulator which sectors will provide, or are providing, national of digital services. Examples here include the training competitive advantage and decide how digitization can programs launched by telecommunications authorities in reinforce these trends. Second, they need to explicitly Japan and the Republic of Korea. understand the trade-offs between job creation and Choosing which role to play and finding the right productivity growth that increasing digitization will bring. partnerships for executing that role represent a new For example, accelerating digitization in manufacturing in set of capability challenges for policymakers. Building most OECD countries will lead to significant productivity a digital market would require them to master all three gains, but also job losses. Finally, policymakers need capabilities and then identify, in a targeted manner, to work closely with national leaders to identify and which roles they will play and in which sectors. understand these trade-offs up front, and then work on Finally, the ability to play these roles will be mechanisms to offset potential job losses. influenced by the presence (or absence) of basic For example, Singapore’s digitization agenda enablers in the economy: capital, access to cutting- seeks to increase competitiveness in targeted sectors edge thinking, and digital infrastructure. Policymakers while promoting social welfare. In particular, ports play need to ensure the development of world-class research a vital role in this export-driven island economy. The bodies; the availability of seed and venture capital; and Infocomm Development Authority of Singapore and the development of reliable, high-quality infrastructure. the Maritime and Port Authority of Singapore (MPA) For example, Saudi Arabia is trying to develop world- have therefore jointly launched WISEPORT, the world’s class research institutes in the King Abdullah University first port WiMax (a fast wireless standard) network that of Science and Technology, while also setting up an provides coverage within 15 kilometers of the southern incubator in the King Abdulaziz City for Science and coastline. In addition, the MPA has established a fund Technology and working with operators to ensure the that encourages maritime technology, resulting in digital availability of high-speed digital infrastructure. Another initiatives such as the intelligent bunker management example is Germany’s ICT 2020 plan, which provides system and SingTel AlTrac, a secure global satellite funding to small- and medium-sized businesses engaged tracking system, built by the incumbent operator SingTel. in research and development activities within the ICT sector.7 Build capabilities Becoming a digital market maker requires policymakers Jump-start and monitor the wider digitization first to adopt a holistic ecosystem perspective. ICTs ecosystem range beyond basic infrastructure, and policymakers The challenge for all stakeholders has been to monitor need to look at a multilayered ICT ecosystem the execution and the impact of the digital ecosystem. categorized in 42 buckets to understand what role they Investing in digitization requires more than a leap of faith; need to play in each to enable creation of digital markets it necessitates that policymakers measure, track, and (Figure 3). demonstrate conclusively the significant impact of every Where the private sector does not have sufficient dollar that is invested in digitization. This is especially incentive to undertake the development of critical digital critical now, when most countries in the developed world infrastructure, the state needs to play the role of a are gripped by fiscal austerity measures. A partnership developer, becoming a participant in the market—either that includes institutions such as the International directly or through a public-private partnership. Finland, Telecommunication Union, the United Nations, the for example, has developed the VTT Technical Research OECD, Eurostat, and the World Bank has defined a list Centre, which provides multidisciplinary research and of 48 core ICT indicators in an attempt to harmonize development services to both the public and private tracking at a global level.8 sectors. In another case, Malaysia has launched the Policymakers need to institutionalize systems to MyHealth initiative, which allows online provision of a measure and monitor the progress of ICTs, and monitor range of healthcare services to the nation’s population. the progress of digitization against those plans, while Where there are opportunities for the private sector creating accountability for their digitization targets. This is but the risks are high or the returns are not guaranteed, a challenging process for two reasons. First, monitoring the state can play the role of financier. Examples include the progress of a national plan takes years and requires Australia’s Digital Enterprise initiative, which seeks to balancing social and economic interests. Policymakers increase digital participation by small- and medium-sized need to ensure that government leaders fully understand enterprises and civil society organizations. and endorse the measurements, goals, and trade-offs between these interests. Second, there is currently 40 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 65. 1.2: Digitization for Economic Growth and Job Creation Figure 3: A holistic ecosystem perspective Layer 1 Layer 2 Layer 3 Managed services Integration services Services Support services Online services Information technology Software Software development Digital media Digital content End-user equipment Hardware IT equipment Hardware components WIreless Service provision Wireline Interconnection Communication WIreless Network equipment Wireline (hardware & proprietary software) Interconnection Layer 3 Layer 4 Managed services Application management services Hosting infrastructure services Research & development Integration services Systems integration Product assembly Support services Maintenance & support IT consulting ICT education & training Online services Online platforms Software development Packaged applications Gaming Customized applications Systems software Digital content Content creation Content aggregation Content distribution End-user equipment PCs & peripherals Laptops Tablets Handheld devices Multimedia devices IT equipment Data center equipment (servers, storage, etc.) Network equipment (routers, hubs, switches, etc.) Hardware components Semiconductor devices Electronic components Microprocessor devices Sensors (RFIDs, M2M,etc.) WIreless Wireless operators MVNOs Support services* Tower companies Wireline Wireline operators ISPs Support services Interconnection Terrestrial Submarine Satellite Support services WIreless Wireless network equipment Wireline Wireline network equipment Interconnection Cable Satellite Source: Booz & Company. Note: ISP = Internet service provider; M2M = machine to machine; MVNO = mobile virtual network operator; RFID = radio-frequency identification. * Wireless support services include operations and maintenance, and data clearing. The Global Information Technology Report 2013 | 41 @ 2013 World Economic Forum
- 66. 1.2: Digitization for Economic Growth and Job Creation no standard, replicable tool to measure digitization on REFERENCES which policymakers, economists, and private-sector BMBF (Federal Ministry of Education and Research). 2007. ICT 2020: Research for Innovations. Berlin: Federal Ministry of Education and stakeholders agree. Policymakers need to invest the time Research (BMBF). Available at http://www.bmbf.de/pub/ict_2020. and effort required to ensure that all sector participants pdf. agree to a consistent set of metrics. El-Darwiche, B., A. Sharma, M. Singh, and R. Abdel Samad. 2012. Digitization in Emerging Economies: Unleashing Opportunities at the Bottom of the Pyramid. Beirut: Booz & Company. Available CONCLUSION at http://www.booz.com/media/uploads/BoozCo_Digitization-in- Ever since Adam Smith proposed the theory of absolute Emerging-Economies.pdf. advantage enjoyed by a country in producing a good or Friedrich, R., F. Gröne, A. Koster, and M. Le Merle. 2011. Measuring service, policymakers have sought to build and maintain Industry Digitization: Leaders and Laggards in the Digital Economy. Düsseldorf: Booz & Company. Available at http://www.booz.com/ this advantage in key sectors of their economies. media/uploads/BoozCo-Measuring-Industry-Digitization-Leaders- Digitization is emerging as a new tool to build and Laggards-Digital-Economy.pdf. sustain such absolute advantages, and in some cases Katz, R., and P. Koutroumpis. 2012. “Measuring Socio-Economic Digitization: A Paradigm Shift,” Social Science Research Network. even to claim the “right to win” and beat the competition Available at http://papers.ssrn.com/sol3/papers.cfm?abstract_ in certain sectors—a critical capability that underpins all id=2070035. other national economic efforts. Katz, R., S. Vaterlaus, P. Zenhäusern, and S. Suter. 2010. “The Impact Creating digital markets and boosting digitization of Broadband on Jobs and the German Economy.” Intereconomics 45 (1): 26–34. Available at http://www.intereconomics.eu/ can yield significant economic benefits and lead to downloads/getfile.php?id=721&human=1. substantial social benefits to societies and communities. Koutroumpis, P. 2009. “The Economic Impact of Broadband on Growth: Digitization has the potential to boost productivity, create A Simultaneous Approach.” Telecommunications Policy 33 (9): new jobs, and enhance the quality of life for society at 471–85. Available at http://www.sciencedirect.com/science/article/ pii/S0308596109000767. large. For example, if emerging markets could double OECD (Organisation for Economic Co-operation and Development). the Digitization Index score for their poorest citizens over OECD.StatExtracts (database). Available at http://stats.oecd.org/. the next 10 years, the result would be a global US$4.4 Sabbagh, K., R. Friedrich, B. El-Darwiche, and M. Singh. 2012. trillion gain in nominal GDP, an extra US$930 billion in Maximizing the Impact of Digitization. Beirut: Booz & Company. the cumulative household income for the poorest, and Available at http://www.booz.com/media/uploads/BoozCo_ Maximizing-the-Impact-of-Digitization.pdf. 64 million new jobs for today’s socially and economically most marginal groups. This would enable 580 million people to climb above the poverty line.9 If policymakers want to capture these rich returns, then they need to go back to the drawing board and figure out how can they build their digital markets—the markets where the bulk of the world’s information and goods will be bought and sold in the upcoming decade of digitization. NOTES 1 Booz & Company analysis. We have estimated the GDP and employment impact caused by the increased digitization in most countries and aggregated to get the global impact. 2 Koutroumpis 2009; Katz and Koutroumpis 2012; Katz et al. 2010. 3 Koutroumpis 2009; Katz and Koutroumpis 2012; Katz et al. 2010. 4 For an explanation of these three sectors, see The Times 100 Business Case Studies, available at http://businesscasestudies. co.uk/business-theory/strategy/primary-secondary-and-tertiary- activity.html#axzz2EifjmtUr. 5 OECD.Stat; http://stats.oecd.org/. 6 Friedrich et al. 2011. 7 BMBF 2007. 8 For more on the core list of indicators, see http://www.itu.int/ ITU-D/ict/coreindicators/index.html. 9 El-Darwiche et al. 2012. 42 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 67. CHAPTER 1.3 High-speed broadband Internet Protocol (IP) networks have become integral to daily life. As one of the few Convergent Objectives, general-purpose technologies, broadband is becoming increasingly pervasive, continually improving and Divergent Strategies: A catalyzing new inventions and innovations.1 At the national level, governments have recognized Taxonomy of National broadband’s significant contribution to economic performance as well as social development. The UN Broadband and ICT Plans Broadband Commission estimates that 119 countries have implemented broadband policies; during the global ROBERT PEPPER economic crisis of 2008 and 2009, at least a dozen JOHN GARRITY countries included broadband network investment in Cisco Systems their countercyclical fiscal stimulus measures.2 However, the surge in formal broadband policies highlights the variation in action across countries. A critical question now is whether the divergence in policy packages will result in significant differences in the efficacy of plans. To begin this research and establish a foundation for understanding the global landscape of national broadband and information and communication technology (ICT) plans, this chapter reviews plans around the world and presents a taxonomy for classification. First, we detail the existing relationship among broadband, economic growth, and employment. Second, we analyze a cross-section of national plans, considering their objectives and policy components. We then propose a taxonomy examining the degree of broadband supply- and demand-side emphasis. This taxonomy establishes a common language that can guide governments through the development of national broadband plans; it also can serve as a baseline for evaluating the factors of success for implemented plans. BROADBAND ADOPTION AND ECONOMIC IMPACTS Broadband adoption encompasses the expansion of broadband availability as well as the use of devices, applications, content, and services that leverage high- speed IP communications. Government policies can impact all facets of adoption. Countries that do not consider the need to make progress on broadband risk significant loss of competitiveness. The rationale for increasing broadband adoption, through both expanding infrastructure and increasing broadband usage, is based on both short- and long- term impacts. In the short term, the construction of high-speed networks stimulates local economies by immediately employing labor and purchasing materials. Several studies have identified short-term employment effects stemming from (1) direct labor employed to build broadband infrastructure and (2) indirect and induced jobs that are created by suppliers and services supporting the construction activity. One review of six studies that estimate various employment impacts suggests that, on average, 1.56 direct and indirect jobs result per employment opportunity focused on The Global Information Technology Report 2013 | 43 @ 2013 World Economic Forum
- 68. 1.3: Convergent Objectives, Divergent Strategies Figure 1: Coverage and download speeds, 2011 35 30 Advanced economies Emerging economies Average download speed (Mb/s) 25 20 15 10 5 0 0 20 40 60 80 100 Households with Internet (%) Source: ITU World Telecommunications/ICT Indicators Database 2012; Ookla Net Index 2012. broadband network construction; this figure rises to 2.78 in countries where broadband penetration levels are for direct, indirect, and induced jobs created.3 significantly below the thresholds of critical mass where In the long term, business utilization of broadband increasing returns to investment occur (estimated to be can result in network effects and gains in productivity. In at 20 percent subscription penetration).6 the United States, the employment impacts caused by network effects are estimated to be 1.17 jobs per direct ANALYSIS OF PLANS and indirect job.4 Recent research by Qiang and Xu at In late 2012, we conducted a review of national the World Bank examined cross-country time-series and broadband and ICT plans across the world and firm-level data; they determine that broadband has “long- categorized each policy. We first identified the 60 term effects on growth, and contributes to the growth of largest countries in the world (a group constituting a number of non-telecom industries, especially high-tech over 90 percent of global gross domestic product and industries.”5 95 percent of current Internet users), and reviewed all national broadband policy environments to determine THE ROLE OF GOVERNMENT IN BROADBAND whether a current national broadband and ICT plan ADOPTION exists. Of the 60, we identified 43 countries with plans; Public policies in broadband development vary in the of those 43 we were able to closely review 28 plans extent of intervention and the degree to which policy with official English versions. These 28 plans represent levers focus on broadband availability (supply) or usage a cross-section of countries across geographic regions (demand). Although the fiscal stimulus packages of as well as income levels. Appendix A lists each plan, its many countries, for example, responded to the global economy of origin, and the year of its publication. crisis by direct public-sector investment in broadband Our review also compared the national plans against infrastructure, public policy also facilitates expansion a scorecard of broadband policies based on a review of by establishing rules and regulations under which the telecommunications policy literature. This comparison private sector is encouraged to expand connectivity. against the scorecard allows for the categorization and Increasing broadband adoption requires demand- descriptive analysis of each plan. As far as we know, driving policy measures as well. In order to fully utilize this taxonomy is the first attempt to characterize an broadband infrastructure, individuals, enterprises (small, international sample of national broadband and ICT medium, and large), and government entities require the plans. skills, devices, applications, and content that motivate the interest and ability of stakeholders to incorporate CONVERGENT OBJECTIVES IP technology. Both sets of policy actions—supply Although the plans reviewed range widely in their policy expanding and demand driving—are integral, particularly recommendations, they converge on the overarching 44 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 69. 1.3: Convergent Objectives, Divergent Strategies objective of increasing broadband and ICTs in order to advance their respective economies. To a lesser degree, Box 1: Networks fit for purpose: Beyond download speed targets the specific targets and indicators of the plans vary. We identified three main categories of goals presented Although the high download speed targets of many across the plans: coverage (subscriptions or availability), national broadband and ICT plans are laudable, ensuring speed (primarily download), and economic impacts full utilization of broadband technology requires an equal (including employment). We group the remaining targets, emphasis on additional components of broadband quality: upload speed and latency. predominantly sector-specific, into a fourth category of High download speeds are necessary for the “other” goals. consumption of large data files or the streaming of Coverage targets focus on connecting people and content, but synchronous communication, such as video territories to IP networks. Commonly measured as a conferencing, requires a parallel high speed of upload. Additionally, latency (measured as the time required for percentage of individuals or households, some countries round-trip data transmission, calculated in milliseconds) is also include targets for connecting businesses as well also critical for two-way communication over the Internet in as public institutions, such as schools and hospitals. a wide range of applications. The indicators utilized vary from actual subscriptions to As more applications and services are hosted “in the cloud,” upload speed and latency become more essential. simply geographic coverage of broadband infrastructure Cisco’s Visual Networking Index 2012–2017 estimates that that provides access. Speed targets are closely nearly three-quarters of mobile IP traffic is cloud-based. associated with coverage, and broadband definitions That share is forecasted to rise to 84 percent of all mobile vary widely, from nascent levels below 1 megabit per data traffic by 2017. second (Mb/s) to ultra-fast broadband speed targets at Additionally, Cisco’s Global Cloud Index estimates that, for business and consumer applications delivered by the 100 Mb/s level. the cloud, an advanced level of cloud application readiness Economic impact goals identified in the plans requires latency below 100 milliseconds. This latency range from specific employment targets as a result threshold is required in order to support high-definition of broadband and ICTs to aggregate value-added (HD) video conferencing, advanced multiplayer gaming, and the streaming of super HD video. Intermediate cloud measured by expenditure. The remaining targets range application readiness (to support IP telephony, basic from sector-specific ones such as increasing electronic gaming, basic video chat, basic video conferencing, government services to increasing country rankings advanced social networking, and HD video streaming) in international indexes. Appendix B presents specific requires latency of between 100 and 159 milliseconds. Basic readiness is above 160 milliseconds. examples from national plans. The economies are divided into “Advanced” and “Emerging,” demonstrating that historic income differences do not dictate the Sources: Cisco Mobile VNI Forecast 2012–2017; Cisco Cloud Readiness Index 2012. aggressiveness of broadband targets. MORE ON COVERAGE AND SPEED Coverage and speed targets comprise the main goals listed across the plans reviewed here, reflecting an international emphasis on these objectives. For example, Target 3 of the UN Broadband Commission have a majority of households connected.9 And although is to connect at least 40 percent of households in some advanced and emerging economies have similar developing countries to broadband Internet by 2015.7 coverage and speed levels, a few emerging countries The European Commission’s Digital Agenda for Europe appear as outliers, with very high average speed 2010–2020 emphasizes broadband coverage for all by (Romania, for example) or very high household coverage 2013, including fast broadband coverage of at least 30 (Qatar). Mb/s for all by 2020, with 50 percent of households Coverage and download speed, although important, subscribed to ultra-fast broadband of 100 Mb/s.8 are not the only factors that should be taken into Comparing the current levels of coverage and speed account. Fully leveraging the benefits of broadband of the 60 largest countries illustrates the relationship requires adequate upload speed as well as latency between household adoption of the Internet and average (Box 1). download speeds (Figure 1). Coverage and speed are highly correlated (with a correlation coefficient POLICY OPTIONS: SUPPLY- AND DEMAND-SIDE of 0.7), suggesting a concurrent policy approach to DRIVERS coverage and speed targets. Categorizing economies Other research has characterized broadband markets into advanced and emerging groups further illustrates as an ecosystem with components covering hard that, although the majority of households in advanced infrastructure as distinct from policy environments, economies are connected to the Internet (seen in the or applications and content access as distinct from x-axis of the figure), only a few emerging economies connectivity and user skills. We have applied a The Global Information Technology Report 2013 | 45 @ 2013 World Economic Forum
- 70. 1.3: Convergent Objectives, Divergent Strategies Figure 2: Categories of supply- and demand-side policies 2. Spectrum allocation and assignment. These policies allocate and assign spectrum to allow both existing and new companies to provide SUPPLY-SIDE POLICIES DEMAND-SIDE POLICIES bandwidth-intensive broadband services. These I. Competition and investment I. Affordability of devices and policies also encourage the implementation of access rules to allow operators to engage in spectrum trading. The Slovak Republic’s National Strategy II. Spectrum allocation and II. Government leadership in for Broadband Access in the Slovak Republic assignment broadband use and online (2009) outlines a vision of effective utilization of activity spectrum frequency.11 The plan recommends the III. Reducing infrastructure III. ICT skills development transition toward the digital dividend, repurposing deployment costs excess spectrum obtained by switching analogue to digital broadcasting. IV. Core network expansion: IV. Online and local content, Market led, government led, applications, 3. Reducing infrastructure deployment costs. These or a mix new technologies, and include policies that allow for access to rights-of- services way, infrastructure sharing, and/or open access V. Inclusive broadband V. Consumer protection and availability (e.g., with empowerment on critical infrastructure. Public rights-of-way can universal service obligations include existing infrastructure owned by public or universal service funds) entities, such as railways or electricity grids. Open-access policies can include government- sponsored or dominant-operator networks Source: Authors. to enable greater competition in downstream markets. Germany’s Federal Government Broadband Strategy (2009) includes measures to supply-side versus demand-side approach, because optimize the shared use of existing infrastructure this distinction more clearly demonstrates the fact that and facilities.12 Among these measures are public policy can impact most facets of broadband developing an infrastructure atlas and database adoption (Figure 2). The supply- versus demand-side on construction sites, and promoting collaboration categorization also points to the separate and distinct on ducts and other infrastructure. outcomes of expanding availability of broadband or stimulating utilization. 4. Core network expansion: Market led, government On the supply side, we have categorized the range led, or a mix. This category includes explicit and of policy options into five groups, with specific examples implicit strategies for core network infrastructure of recommendations that are included in national expansion that are: (1) market driven with few broadband and ICT plans. government directives, (2) a government-led (or majority-owned) network company, or (3) some 1. Competition and investment policies. These combination of public and private cooperation in policies encourage private-sector entry and core infrastructure buildout that can encompass investment in broadband networks, as well as an official public-private partnership or a division technology- or service-neutral rules that give in roles between public and private entities to operators the greatest degree of flexibility. In provide the core network. Australia’s National addition, they can include policies that promote Broadband Network (2009) is an example of a effective competition in international gateways national plan where a government-owned entity and/or wholesale nondiscriminatory access. will provide national core network infrastructure.13 For example, the United States’ Connecting America: The National Broadband Plan (2010) 5. Inclusive broadband availability. These policies included a wide range of recommendations focus directly on closing broadband availability to provide greater clarity on its broadband gaps for remote or marginalized populations. market and encourage investment; the Options here include actions to build out recommendations in that plan ranged from infrastructure to underserved and/or rural areas, reviewing wholesale competition regulations and possibly utilizing universal service obligations and/ clarifying interconnection rights and obligations to or universal service funds. The United Kingdom’s recommending balance in policies around copper Britain’s Superfast Broadband Future (2010) retirement.10 report emphasizes the Broadband Delivery UK 46 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 71. 1.3: Convergent Objectives, Divergent Strategies model for delivering connectivity in rural and with a focus on translation into local language(s). hard-to-reach areas to stimulate private-sector This category also includes actions and legislation investment with available funding.14 that can foster new applications, technologies, and services by supporting e-transactions Demand-side policies focus on greater broadband or online payments and enforcing intellectual adoption through intensifying the motivators of usage. property protection to foster innovation in online From increasing affordability to fostering trust in the services and applications. Qatar’s National online environment, these policies are categorized into ICT Plan: 2015 (2011) recommends policies to the following dimensions: accelerate small- and medium-sized enterprise use and involvement in ICT services.18 The 1. Affordability of devices and access. These plan also emphasizes local content creation, policies include, but are not limited to, targeted technology to recognize Arabic characters, and subsidies for device purchases by low-income a focus on an e-health system that employs households, decreasing or removing luxury taxes broadband and ICTs to enhance healthcare on ICT devices, and low-cost leasing programs. services. Morocco’s Digital Morocco 2013 (2008) strategy highlights programs to subsidize computers and 5. Consumer protection and empowerment. Internet connections for teachers and students.15 These policies protect consumers and enhance The strategy also emphasizes public-private transparency between businesses and partnerships to offer similar low-cost device- customers. They include clear regulations around and-access packages to different sections of the personal data, privacy, and truth in advertising population. of broadband offerings. These actions help to ensure consumer trust in conducting private and 2. Government leadership to utilize and promote business activity online. The Philippine Digital broadband. These include policies that encourage Strategy: Transformation 2.0 (2011) calls for online the deployment of e-government services and consumer protection, consumer awareness, portals, as well as the government operating and the creation of data security as well as data as an “anchor-tenant” for broadband service. privacy regulations.19 Japan’s New Strategy in Information and Communications Technology (IT) (2010) highlights recommendations for improving and increasing TAXONOMY FOR BROADBAND AND ICT PLANS the availability of e-government services and for We classified plans based on their relative emphasis driving efficiency in government ICT systems.16 on supply- and/or demand-side policies within the These services include an emphasis on cloud categories identified above. Plans moved from limited in technology and promoting citizen participation in their focus to extensive along both supply- and demand- political activities by electronic voting. side dimensions as they increase in the number of policy categories included in a plan. We set this threshold when 3. ICT skills development. This category includes plans have policy recommendations in at least four of the programs to increase ICT-related skills and five categories listed under each supply and demand. familiarity across the population, such as digital Comparing the extent of both supply- and demand- literacy programs. ICT skills development side level policy coverage, we then sorted national plans policies also target actions intended to into four relevant categories. The most comprehensive increase community usage and access through plans that include extensive supply- and demand-side “telecenters” and public-access sites as well as coverage are defined as broad-based, while plans that increasing technical skills, such as computer are more heavily focused on one dimension are either science and network engineering. Nigeria’s supply-driven or demand-driven. The plans that have National Information Communication Technology been published with fewer specific recommendations (ICT) Policy DRAFT (2012) emphasizes the across the range of policy options are classified as introduction of ICT training at all school levels emergent. Figure 3 illustrates the typology and the through the development of specialized training number of plans in each category; Appendix A lists each institutes.17 It also provides for computer and plan. Internet access in public facilities such as post Broad-based plans are the most comprehensive offices, schools, and libraries. and incorporate a wide range of policy recommendations 4. Facilitating online and local content, applications, on both supply- and demand-side dimensions. Of the 28 new technologies, and services. These policies plans reviewed, 9 plans are categorized here as broad- include programs such as targeted campaigns to based and focus on increasing the availability of high- increase and localize online content, sometimes speed networks as well as the activity on those networks The Global Information Technology Report 2013 | 47 @ 2013 World Economic Forum
- 72. 1.3: Convergent Objectives, Divergent Strategies Figure 3: Taxonomy for national broadband/ICT plans DEMAND-SIDE Limited Extensive Limited Emergent (2) Demand driven (8) SUPPLY-SIDE Extensive Supply driven (9) Broad based (9) Source: Authors’ calculations. Note: The number in parentheses is the number of plans in each category out of the 28 plans reviewed. to drive utilization. Examples of broad-based plans A distributional review of the plans highlights that, include the United States’s Connecting America: The while the demand-driven plans range widely in the years National Broadband Plan (2010), Qatar’s National ICT of their publication (they start in 2005 and go to 2012, Plan 2015 (2011), and Egypt’s eMisr National Broadband with no more than two plans published in the same Plan (2011).20 year), the supply-driven plans are heavily concentrated Supply-driven plans focus on actions to build in 2009. This trend reflects the broadband infrastructure out infrastructure and increase broadband availability investment emphasis as a series of countercyclical through competition and investment policies; they also responses to the global economic crisis. Additionally, include direct action to reach underserved populations. all nine of the broad-based plans identified here were The nine supply-driven plans identified here, however, published from 2010 to 2012, signaling an evolution in vary in the extent of public investment directed to core the way national governments are now shifting policy infrastructure expansion. Australia’s National Broadband emphasis to encompass both supply and demand. Network (2009), for example, initiates the construction of a government-owned public infrastructure network, CONCLUSION: DIVERGENT PLANS, COMMON while Germany’s Federal Government’s Broadband UNDERSTANDING Strategy (2009) and the United Kingdom’s Superfast Countries around the world have developed national Broadband Future (2010) focus on market players to plans to accelerate broadband adoption. These plans drive core investment and provide public investment at vary by both goals and policy recommendations. Our the municipal level for underserved regions to access taxonomy of broad-based, supply-driven, demand- high-speed infrastructure.21 driven, and emergent provides a clear method for In some cases, such as in Australia, a supply-driven categorizing national broadband and ICT plans on the plan may be complemented with a demand-driven breadth of their policy options. This classification is a one. In 2011, Australia released its National Digital starting point in the review and comparison of national Economy Strategy,22 emphasizing policies in most of the plans. Further, it can aid policymakers in countries that demand-side categories noted above; the two Australia have strategic plans underway as they work to increase plans together formulate a comprehensive approach to broadband adoption. increasing availability and utilization of broadband. Further research on the efficacy of existing Other examples of the eight demand-driven plans broadband plans and evidence that points to the identified here include Morocco’s Digital Morocco 2013 identification of an optimal policy formulation is crucial. (2008) and Poland’s Strategy for the Development of Additional issues that need to be addressed include the Information Society in Poland until 2013 (2008).23 determining whether there are differential impacts of These plans focus more on intensifying the utilization of supply- versus demand-side policies; if such differences broadband and ICTs to drive economic growth. do exist, whether they depend on current levels of Few plans are categorized as emergent, as the broadband adoption (e.g., are supply-side policies more effort to formulate a national strategy tends to result in a relevant in countries with extensive Internet adoption comprehensive set of policy recommendations. However, or vice versa), and determining which variables—such the classification reinforces the importance of a broad as the implementing agency and the extent of the review of available policy levers in the pursuance of goals consultative process—impact how successful a plan is in of increasing broadband availability and utilization. achieving the target goals. 48 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 73. 1.3: Convergent Objectives, Divergent Strategies Australian Government, Department of Broadband. 2009. What Is the What is clear now is that the relationship between NBN? Available at http://www.nbn.gov.au/about-the-nbn/what-is- broadband and national objectives, such as growth the-nbn/. and employment, has led to an increasing number — —. 2011. National Digital Economy Strategy. Available at http://www. — of broadband and ICT plans. As variations in plans nbn.gov.au/the-vision/digitaleconomystrategy/. exist, this taxonomy establishes a common descriptive BIS (Department for Business, Information and Skills). 2010. Britain’s language for broadband plans and thus sets the baseline Superfast Broadband Future. London: BIS. Available at http:// www.culture.gov.uk/publications/7829.aspx. for continued research that will enable us to achieve Bresnahan, T. F. and M. Trajtenberg. 1995. “General Purpose further detail in understanding how best to unleash the Technologies ‘Engines of Growth’?” Journal of Econometrics 65 potential benefits of broadband for all governments, (1): 83–108. businesses, and citizens. Cisco. 2012. Cisco Global Cloud Index: Forecast and Methodology, 2011–2016. Available at http://www.cisco.com/en/US/solutions/ collateral/ns341/ns525/ns537/ns705/ns1175/Cloud_Index_White_ NOTES Paper.html. 1 See Bresnahan and Trajtenberg 1995, who define general- purpose technologies, and Qiang and Xu 2012, who measure the — —. 2013. Visual Networking Index: Forecast and Methodology, — impact of ICTs across sectors in various economies and determine 2012–2017. Available at http://www.cisco.com/en/US/solutions/ that broadband is the ICT that has the characteristics of general- collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11- purpose technology. 520862.pdf. 2 UN Broadband Commission 2012 and Qiang 2010. EC (European Commission). Digital Agenda for Europe 2010–2020. Available at http://ec.europa.eu/information_society/digital- 3 Kelly and Rossotto 2012. Note that country-specific effects may agenda/scoreboard/index_en.htm. be present. Induced employment typically refers to employment that results from added consumption of goods and services by eMisr (Egypt). 2011. eMisr National Broadband Plan. Available at http:// direct and indirect employment. www.tra.gov.eg/emisr/. 4 Atkinson, Castro, and Ezell 2009 review the network effect FCC (Federal Communications Commission). 2010. Connecting multiplier on employment in the United States. America: The National Broadband Plan. Available at http://www. broadband.gov/download-plan/. 5 Qiang and Xu 2012. Federal Ministry of Economics and Technology (Germany). 2009. 6 Koutroumpis 2009 has identified that increasing returns to The Federal Government’s Broadband Strategy. Berlin: Federal broadband investment occurs when a critical mass of penetration Ministry of Economics and Technology. Available at http://www. is reached at levels above 20 percent (20 subscriptions per 100 bmwi.de/English/Redaktion/Pdf/broadband-strategy,property=pdf, people). bereich=bmwi,sprache=en,rwb=true.pdf. 7 UN Broadband Commission 2011. ICT Qatar. 2011. Qatar’s National ICT Plan 2015. Available at http://www. ictqatar.qa/en/documents/document/qatar-s-national-ict-plan- 8 EC Digital Agenda for Europe 2010–2020. 2015-advancing-digital-agenda. 9 Advanced versus Emerging economy classification as defined IMF (International Monetary Fund). 2012. 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Available at http://www.sciencedirect.com/science/ article/pii/S0308596109000767. 17 Nigeria 2012. Kingdom of Morocco, Ministry of Industry, Trade, and New 18 ICT Qatar 2011. Technologies. 2008. Digital Morocco 2013: The National Strategy for Information Society and Digital Economy. Available at http:// 19 Philippine Government 2011. www.egov.ma/SiteCollectionDocuments/Morocco%20Digital.pdf. 20 FCC 2010; ICT Qatar 2011; eMisr (Egypt) 2011. Nigeria. 2012. National Information Communication Technology 21 Australian Government 2009; Federal Ministry of Economics and (ICT) Policy DRAFT. Available at http://www.commtech.gov.ng/ Technology 2009; BIS 2010. downloads/National_ICT_Policy_DRAFT_090112.pdf. 22 Australian Government 2011. Ookla. 2012. Net Index. Available at http://www.netindex.com/source- data/. 23 Kingdom of Morocco 2008; The Republic of Poland 2008. Philippine Government. 2011. Philippine Digital Strategy: Transformation 2.0. Available at http://ilearn.gov.ph/ PhilippineDigitalStrategy2011-2016.pdf. REFERENCES Prime Minister of Japan and His Cabinet. 2010. A New Strategy in Atkinson, R. D., D. Castro, and S. J. Ezell. 2009. The Digital Road to Information and Communications Technology (IT). May 11. Recovery: A Stimulus Plan to Create Jobs, Boost Productivity Available at http://www.kantei.go.jp/foreign/policy/it/100511_full. and Revitalize America. Available at http://dx.doi.org/10.2139/ pdf. ssrn.1334688. The Global Information Technology Report 2013 | 49 @ 2013 World Economic Forum
- 74. 1.3: Convergent Objectives, Divergent Strategies The Republic of Poland, Ministry of Interior and Administration. 2008. The Strategy for the Development of the Information Society in Poland until 2013. Available at http://bip.msw.gov.pl/download. php?s=4&id=6188. Qiang, C. Z-W. 2010. “Broadband Infrastructure Investment in Stimulus Packages: Relevance for Developing Countries.” info 12 (2):.41–56. Qiang, C. Z.-W. and L. C. Xu. 2012. “Telecommunications and Economic Performance: Macro and Micro Evidence.” Working Paper. Washington, DC: World Bank. The Slovak Republic. 2009. National Strategy for Broadband Access in the Slovak Republic. Available at http://www.telecom.gov.sk/index/ open_file.php?file=telekom/Strategia/Broadband/NSSP_2011_ en.pdf&lang=en. United Nations Broadband Commission. 2011. “Broadband Targets for 2015.” Available at http://www.broadbandcommission.org/ Documents/Broadband_Targets.pdf. — —. 2012. The State of Broadband 2012: Achieving Digital Inclusion for — All Geneva: ITU. Available at http://www.broadbandcommission. org/Documents/bb-annualreport2012.pdf. 50 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 75. 1.3: Convergent Objectives, Divergent Strategies Appendix A: Broadband and ICT plans reviewed The table below illustrates the different categories of policies present in each broadband/ICT plan reviewed. The roman numerals refer to the policy categories shown in Figure 2. Supply-side policies Demand-side policies Category National broadband and ICT plan name Economy Year I II III IV V I II III IV V Broad- eMisr National Broadband Plan Egypt 2011 n n n n n n n n n n based plan National Telecom Policy 2012 India 2012 n n n n n n n n n n National Information Communication Technology Nigeria 2012 n n n n n n n n n (ICT) Policy DRAFT The Philippine Digital Strategy: Transformation Philippines 2011 n n n n n n n n n 2.0: Digitally Empowered Nation 2015: Qatar’s National ICT Plan Qatar 2011 n n n n n n n n n National Development Plan 2030: Our Future – South Africa 2012 n n n n n n n n n Make It Work ICT for Everyone: A Digital Agenda for Sweden Sweden 2011 n n n n n n n n n National Broadband Policy Thailand 2010 n n n n n n n n n Connecting America: The National Broadband United States 2010 n n n n n n n n n n Plan Supply- The National Broadband Network Australia 2009 n n n n driven plan Broadband Canada: Connecting Rural Canadians Canada 2009 n n n n The National Broadband Access Policy - Czech Republic 2005 n n n n n n n Broadband Strategy of the Czech Republic The Federal Government’s Broadband Strategy Germany 2009 n n n n n n Next Generation Broadband: Gateway to a Ireland 2009 n n n n n n Knowledge Ireland The National Broadband Plan: Enabling High Malaysia 2004 n n n n n n n Speed Broadband Under MyICMS 886 * Ultra-Fast Broadband Initiative + Rural Broadband New Zealand 2009 n n n n n Initiative National Strategy for Broadband Access in the Slovak Republic 2009 n n n n n n Slovak Republic Britain’s Superfast Broadband Future United Kingdom 2010 n n n n n n n Demand-driven #AU20: The National Digital Economy Strategy Australia 2011 n n n n plan 2008 Digital 21 Strategy Hong Kong SAR 2007 n n n n n n n n National Broadband Strategy Hungary 2005 n n n n n n n n A New Strategy in Information and Japan 2010 n n n n n Communications Technology (IT) Digital Morocco 2013: The National Strategy for Morocco 2008 n n n n n n Information Society and Digital Economy Draft National IT Policy (Revised) 2012 Pakistan 2012 n n n n n n n The Strategy for the Development of the Poland 2008 n n n n n Information Society in Poland until 2013 Realising the iN2015 Vision – Singapore: An Singapore 2006 n n n n n n n n Intelligent Nation, A Global City Emergent Plan for a Digital Canada Canada 2010 n n n n n n plan Estrategia Digital: Digital Development Strategy Chile 2007 n n n n 2007–2012 * In 2010, Malaysia launched five initiatives as part of a National Broadband Initiative; however, we were unable to obtain an official comprehensive document to review here. Note: The plans we reviewed consist of the most current plans with official English language versions. In a few cases, we included draft plan documents that were released to the public for review. The Global Information Technology Report 2013 | 51 @ 2013 World Economic Forum
- 76. 1.3: Convergent Objectives, Divergent Strategies Appendix B: Examples of goals found in national broadband/ICT plans, by economy groups v Goal Economic impacts (including Other goals Economy group Broadband coverage Broadband speeds employment) (including sector-specific targets) Germany New Zealand Singapore United States Advanced By 2014, 75 percent of households By 2020, download speeds of at By 2015, achieve a twofold increase By 2020, create a nationwide, economies to have Internet access of at least least 100 Mb/s and upload speeds in the value-added of the ICT wireless, interoperable broadband 50 Mb/s of at least 50 Mb/s (connected to 75 industry to S$26 billion, a threefold public safety network and a clean percent of New Zealanders) increase in ICT export revenue to energy economy where every S$60 billion and create 80,000 citizen can use broadband to track additional jobs and manage real-time energy consumption Sweden United Kingdom Japan Australia By 2020, 90 percent of all By 2015, all homes will have access By 2020, create new related By 2015, 495,000 telehealth households and businesses have to a minimum level of service of markets worth 70 trillion yen consultations will have been access to broadband at a minimum 2 Mb/s delivered, providing remote access speed of 100 Mb/s to specialists for patients in rural, remote, and outer metropolitan areas; by 2020, 25 percent of all specialists will be participating in delivering telehealth consultations to remote patients Thailand Egypt Pakistan Philippines Emerging By 2015, develop the broadband By 2021, 90 percent of households In 10 years, create 5 million new By 2016, increase the country’s economies network to provide access for at will have access to 25 Mb/s jobs across Pakistan linked to the score on the UN e-Participation least 80 percent of the population, broadband availability and 90 ICT- and IT-enabled services (ITES) Index from 24.49 in 2008 to and access for at least 95 percent percent of the population will have sectors; quadruple the percentage of above 40; at least 50 percent of by 2020 4G/LTE coverage women participating in the ICT and government websites will include ITES workforce from the current 13 interactive services (up from 31 percent; double the GDP per capita percent in 2010); at least 20 percent by improving agricultural yields of government websites will include using ICTs and ITES; leverage the transactional services (up from 4.61 cellular phone network for education percent in 2010) and access to information; localize content and broad-based growth of the ICT and ITES sectors South Africa Slovak Republic Morocco India By 2020, achieve target of 100 By 2020, fast broadband (greater By 2013, establish 58,000 jobs in Enable citizens to participate in and percent broadband penetration than 30 Mb/s) coverage for all; IT (up from 32,000 in 2008); direct contribute to e-governance in key greater than 100 Mb/s for 50 additional GDP: 7 billion Morocco sectors such as health, education, percent of households’ broadband Dirham (MAD); indirect additional skill development, employment, subscriptions GDP: 20 billion MAD governance, banking, and so on to ensure equitable and inclusive growth 52 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 77. CHAPTER 1.4 With one-third of the world’s population now online, the impact of—and need for—coordination between The Importance of National government policies and commercial strategies in the rollout and use of information and communication Policy Leadership technologies (ICTs) have never been greater. As cross- cutting technologies, ICTs are creeping into our lives today in many different forms—from how we exchange PHILLIPPA BIGGS news and views to how we share photos, meet up, or ANNA POLOMSKA locate our friends, or even ourselves. on behalf of the Broadband Commission Secretariat The use—and sometimes the abuse—of ICTs are ITU/UNESCO Broadband Commission for Digital driven by extremely fast technological evolution within Development a changing policy environment (Figure 1). A growing number of countries now recognize the importance of policy leadership and a clear cross-sectoral vision that can maximize the economic and social returns of ICTs. This can be seen in the strong growth in the number of national broadband plans (Figure 2). This chapter provides a brief overview of the growth of such national broadband plans and describes characteristics of a good plan, with reference to several examples: the US, UK, and Polish national broadband plans. THE CHANGING POLICY CONTEXT Throughout the 1960s and 1970s, economic arguments of natural monopolies and economies of scale underpinned the state’s function as investor, operator, and (self-)regulator of telecommunication networks and services in many countries. Beginning in the 1980s, market liberalization saw private and competitive operators dramatically accelerate network rollout, reduce prices, and boost the efficiency of telecommunication service provision; these changes continued throughout the 1990s.1 Regulators, initially established as arbiters overseeing the transition to a competitive market, subsequently carved out a role for themselves in overseeing principles of universal service provision, competition, and consumer protection. The late 1990s and early 2000s witnessed the development of an equilibrium of sorts in Europe and North America, with private operator(s) in charge of investment, operations, and service provision; government in charge of high-level policy; and the regulator in charge of more specific concerns. Consensus opinion cast the die in favor of competitive, market-based mechanisms for the provision of telecommunication services, with governments cast in the role of “gap-fillers,” facilitators, and enablers, especially in instances of market failure. This chapter reflects the views of its authors only and in no way reflects the views of ITU or its membership. The chapter draws on data and analysis taken from the ITU Trends in Telecommunication Reform Report 2012, and Chapter 1 of that report, “Overview of Trends in the ICT Market and in ICT Regulation,” authored by Nancy Sundberg and Youlia Lozanova. The Global Information Technology Report 2013 | 53 @ 2013 World Economic Forum
- 78. 1.4: The Importance of National Policy Leadership Figure 1: The institutional context and enabling environment for policy Legislation Regulation Legislators ICT regulator Judiciary Data protection agency Law enforcement agencies Consumer protection agency Police Competition agency CIRTs/CERTs Ministry of internal affairs END International & Other ministries USERS regional organizations Operations Policy Network & service providers Ministry of Vendors ICT/communications Research institutes Standardization organizations Source: Secretariat of the Broadband Commission for Digital Development. Note: CIRT = computer incident response team; CERT = computer emergency response team. More recently, however, the pendulum of opinion many operators are struggling to finance network may be shifting back to accord greater importance to upgrades in the move to Internet Protocol (IP)– the role of government in the rollout and deployment of based networks,5 and are seeking alternative telecommunication services. There are several forces sources of funding, including from the state.6 driving this trend: For example, it is estimated that €50 billion are needed for energy and broadband network 1. A growing body of evidence indicates sizeable upgrades in Europe alone.7 Meanwhile, New positive externalities and strong returns to Zealand’s Ultra-Fast Broadband (UFB) network broadband networks. Statistical cross-country buildout is expected to result in a total savings of regression work generally puts broadband’s $NZ 32.8 billion over 20 years across all sectors contribution to growth in GDP at between 0.25 of the economy (including healthcare, education, percent and 1.4 percent, but this contribution is the business sector, and the dairy sector)8— highly variable and depends on data availability, savings that cannot be reflected or taken into model specifications, and the individual country’s account by the investment plans of any single economic structure.2 Such externalities underline operator. how broadband networks are a part of national infrastructure that is vital for a nation’s economic 3. Handset functionality, the speed of convergence, competitiveness,3 and may help create a greater and the use of mobiles to deliver education, exchange of information and knowledge as an healthcare, and m-money (as well as Facebook important national or international public good.4 updates or the organization of flashmobs and riots) means that mobile operators, vendors, and 2. As well as sizeable returns, the scale of network social networking services may be asked to play investments needed are today so massive, and teacher, doctor, banker, and sometimes even take place over such long time horizons, that policeman under certain circumstances.9 54 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 79. 1.4: The Importance of National Policy Leadership Figure 2: Growth in national broadband policies, 2005–12 120 100 80 No. of countries 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 Source: ITU World Telecommunication/ICT Regulatory Database. As the technical capabilities of ICTs grow, has a marked preference for national broadband plans, operators—and policymakers—are taking on new roles with some 88 percent of European countries having a as they grapple with more complex issues, including plan and/or universal access and service (UAS) definition privacy and security. Alongside codified legislation, law (Figure 4). Africa was well endowed with national plans enforcement, and specific regulation, policy visions for from fairly early on, with ICTs included in International a connected nation can play a vital coordinating role Monetary Fund/World Bank Poverty Reduction Strategy and may optimize outcomes across the institutional Papers. Plans have changed focus over time, with earlier context to the benefit of end users, who find themselves plans produced between 2002 and 2006 generally impacted by diverse policy considerations (Figure 1). tending to focus on ICTs or the Information Society. Plans between 2006 and the present have tended to THE NEED FOR NATIONAL POLICY LEADERSHIP focus explicitly on broadband; more recently, plans focus Policy leadership can help highlight the role of on broader, cross-sectoral considerations of the digital broadband in national development, provide an agenda. enabling environment for private investment, coordinate The region with the fewest national broadband plans dialogue, and encourage work across different sectors is the Arab States, which have generally revised universal and ministries. Over the last few years, policy decision service objectives to include broadband. However, 62 makers, communication ministries, and national countries—or 32 percent of all countries—still do not regulators have made broadband a policy priority. The have any broadband plan, strategy, or policy in place number of broadband plans and policies, as tracked by (Figure 3). Further, for those countries with plans, ITU and the Broadband Commission, has more than achieving progress in implementation may be more doubled since December 2009 (Figure 2). The explosion challenging or slower than envisaged. The number of in national broadband plans in 2010–11 occurred partly national regulatory bodies also continues to grow. By in response to the financial crisis and the prioritization of September 2012, 159 countries had national regulatory national infrastructure investments in economic stimulus bodies, up from 152 in 2008 and 124 in 2002.11 plans.10 Best-practice cases for broadband plans are By September 2012, some 119—or 62 percent—of by now well established. In his chapter for Trends in all economies had developed a national plan, strategy, Telecommunication Reform 2012,12 Horton suggests that: or policy to promote broadband; 12 countries—or 6 percent—are planning to introduce such measures in • Plans should be cross-sectoral across a range the near future (see Figure 3 and Appendix A). Europe of different sectors (although they should also The Global Information Technology Report 2013 | 55 @ 2013 World Economic Forum
- 80. 1.4: The Importance of National Policy Leadership Figure 3: Countries with a national policy, strategy, or plan to promote broadband, mid 2012 n Have a plan (61.7 percent, or 119 economies) n Planning to adopt (6.2 percent, or 12 economies) n No plan (32.1 percent, or 62 economies) Source: ITU/UNESCO Broadband Commission for Digital Development. Figure 4: Policy instruments used to promote universal service, 2012 40 n UAS definition (includes broadband) 35 n Both a plan and a UAS definition n National broadband plan 30 Total countries surveyed (%) 25 20 15 10 5 0 Africa Americas Arab States Asia-Pacific CIS Europe Source: ITU World Telecommunication/ICT Regulatory Database. Note: UAS = Universal access and service. 56 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 81. 1.4: The Importance of National Policy Leadership assign a coordinating agency to be responsible for implementing the plan overall, in conjunction with Box 1: The US National Broadband Plan other involved bodies).13 In 2009, the US Congress charged the Federal Communications Commission (FCC) with creating a • Plans should make the case for broadband, National Broadband Plan to ensure that every American specific to the needs and economic structure has “access to broadband capability.” Creating the plan of that country, based on market analysis and would entail exploring broadband deployment, adoption, benchmarking (Box 2). and affordability, as well as the use of broadband to advance US national priorities, including civic participation; public safety; entrepreneurial activity; and the delivery of • Plans should be developed in consultation with, healthcare, energy, and education, among other priorities. and based on consensus with, a broad range of The FCC conducted an extensive public consultation, stakeholders. with over 41,000 pages of comments reviewed and over 30 public meetings held throughout the country. On March 16, 2010, the FCC delivered the Broadband Plan In addition, comprehensive broadband plans can to Congress to help Americans harness its potential.1 typically be characterized in the following ways: Since then, the FCC has emphasized the vital nature of broadband for US economic opportunity, job creation, innovation, and national competitiveness. Since the • Many plans emphasize an important role for public- release of the Broadband Plan, the FCC has launched a private partnership. number of programs that work toward its implementation. Among these programs are the Connect America Fund, which addresses universal service; a Mobility Fund • Plans should consider both demand- and supply- for funding mobile coverage in unserved areas; the side considerations. This may mean supporting the reformed Lifeline program for low-income Americans; and development of human skills, literacy, and demand Connect2Compete to connect low-income students. among, for example, schools and small- and To promote regulatory certainty, the FCC has set out medium-sized enterprises, as well as taking into clear rules to protect the Internet’s openness and promote innovation, investment, and competition, and has taken account (in many developing countries) the role of steps to free up additional spectrum (for both licensed and government in driving demand. unlicensed broadband, including the use of white space). The FCC is seeking to make 25 more MHz of spectrum • Plans should look forward over a timescale of 5 available and will launch the world’s first incentive auctions to repurpose broadcast spectrum for mobile broadband. to 10 years, as it may often be difficult to predict Since 2010, the FCC has made substantial progress, technological evolution over longer time horizons. through over 60 initiatives, to achieve nearly 90 percent of items on its action agenda (www.broadband.gov). Today, • Plans should be broadly technology-neutral. Plans the benefits of this dialogue on broadband are apparent— more Americans than ever are aware of the importance can still include technology-specific measures (for of broadband to their lives, investment in broadband example, they can consider spectrum issues in infrastructure has risen significantly, and broadband order to facilitate the rollout of mobile broadband). speeds are increasing. However, there should be no major implications in Note terms of favoring specific technologies over others. 1 See http://www.broadband.gov/plan/. Source: Contributed by the Federal Communications Commission • Plans should contain detailed, measurable goals (FCC) of the United States, 2012. and strategies to allow for the evaluation of progress. They may often also contain consideration of special interest groups such as schools, hospitals, universities, diverse languages, and access by minorities or people with specific needs. network deployment to areas of maximum demand and In industrialized countries with high broadband usage. The US National Broadband Plan was notable for penetrations, plans still play an important role as a clear its thorough and detailed benchmarking of the national statement of national policy priorities, such as targets situation in broadband. However, even today, one-third for coverage or for a minimum speed (for example, the of all American citizens have yet to adopt broadband.14 United Kingdom’s digital agenda defines a national In Poland, benchmarking and analysis have played minimum speed of 2 Mb/s; see Box 3). The example a significant role in helping attract and channel local of the National Broadband Plan of the United States investment and foreign direct investment (Box 2). illustrates many of the above aspects (Box 1). State funding for high-speed broadband networks National broadband plans should be based on a may raise issues of competitive concerns and the thorough market analysis and benchmarking in order crowding out of private-sector investment. For example, to best understand current market trends and optimize the European Commission recently conducted a The Global Information Technology Report 2013 | 57 @ 2013 World Economic Forum
- 82. 1.4: The Importance of National Policy Leadership Box 2: The importance of benchmarking: The case of Poland The Polish government introduced its Strategy for the • occurrence of cable connections or wireless terminals Development of the Information Society in Poland until in residential buildings, and 2013 in 2008 and its long-term strategy, Poland 2030, in • the existence of buildings enabling colocation. November 2011. Poland is currently preparing its forthcoming National Broadband Plan (the Plan) for 2013–20, under The data are used by: final consultation until mid-December 2012, enshrining the objectives of the European Union (EU)’s Digital Agenda. • telecommunication operators and Internet service This Plan assumes that geographical areas of intervention providers for making business decisions about new will be determined on the basis of a nationwide coverage investment projects and market competitiveness, and infrastructure inventory exercise, under the Information System of Broadband Infrastructure (known by its Polish • other investors in planning investments, acronym SIIS) database. • local self-government and other local government units, The Plan sets out clear and measurable broadband targets:1 • businesses and consumers for choosing the most attractive technologies and competitive market offers, 1. universal access to the Internet by 2013, • regional operational programs and the Eastern Poland 2. universal access to broadband of the speed of at least Operational Program for notifications to the European 30 Mb/s by 2020, and Union of plans for the rollout of regional broadband 3. at least 50 percent of households with an Internet access networks, and of at least 100 Mb/s by 2020. • local government authorities for issuing opinions with regard to public resources expenditure on the rollout of In addition, a law adopted in 2010 and designed with telecommunication networks. the participation of the Office of Electronic Communications (UKE)—the act supporting the development of networks and UKE uses these data as a tool for analysis to determine services—speeds up investment and supports broadband the direction for broadband network investment and Internet access in Poland by requiring duct infrastructure to development, address gaps in coverage, and support local be located along new and rebuilt roads. government units—for example, through the establishment of Accurate data on existing infrastructure is vital to areas entitled to apply for state aid in the further development tailoring policy and regulation, and to attracting investment of infrastructure. The database also helps big businesses and to areas without broadband. UKE collects data every year small- and medium-sized enterprises determine where—in on infrastructure and broadband Internet access for both which locations and which technologies—to invest. fiber and wireless networks. An understanding of coverage Poland, during the preparation of guidelines for its will optimize investments by operators and local government new financial perspective for the years 2014–20, enshrines and allow for the long-term planning of telecommunication the objectives of the EU Digital Agenda in its forthcoming infrastructure development. Plan, currently in draft form. The Plan assumes that the The Polish Telecommunication Institute, UKE, and the geographical areas of intervention will be determined on the Ministry of Administration and Digitization (previously the basis of nationwide coverage and infrastructure inventory Ministry of Infrastructure) have developed the dedicated accumulated in the SIIS system. The system has become SIIS database, implemented and overseen by UKE. Detailed a tool to determine which areas are in need of funding, to information is presented in the form of tables, charts, and detect and eliminate gaps in the coverage of high-speed maps at the provincial and commune levels. UKE has network bandwidth and improve offers aimed at the less- collected data on the status of infrastructure and investment developed areas, and to determine in what locations and in projects in the following areas: what technology investment is justified. • fiber optic network terminations, Note • telecommunications network nodes, 1 National Broadband Plan (Draft), available from the Ministry of Administration and Digitization (formerly the Ministry of • access nodes, Infrastructure), at http://www.transport.gov.pl/files/0/1794416/ • coverage of cable and wireless networks, NARODOWYPLANSZEROKOPASMOWY.pdf. Source: Contributed by the Office of Electronic Communications • penetration of cable connections or wireless terminals in (UKE) of Poland, 2012. buildings, 58 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 83. 1.4: The Importance of National Policy Leadership consultation and sought comments on the application Box 3: Britain’s Superfast Broadband Future of EU state aid rules to the public funding of broadband networks over the summer of 2012, with a view to Britain’s Superfast Broadband Future sets out the UK government’s vision for broadband in the United Kingdom adopting definitive broadband guidelines in December and how this will be achieved, including the benchmarking 2012.15 The revised guidelines propose the possibility of of current market deployment in the United Kingdom and supporting ultra-fast broadband networks under certain the monitoring of progress. The vision was to have the conditions. “best superfast broadband network in Europe by 2015”— The UK government has committed to ensuring the with targets of 90 percent of the population having access to superfast broadband (defined as 24 Mb/s) and the rest rapid rollout of superfast broadband across the country of the population to have access to at least 2 Mb/s by and “the best superfast broadband network in Europe by 2015. 2015.”16 It has detailed in precise terms how it intends to The UK government has committed to investing £530 achieve this in the strategy document Britain’s Superfast million in public funds by 2015 to support this goal. The three devolved administrations in Scotland, Wales, and Broadband Future (described in Box 3), which sets out Northern Ireland, and over 40 English local authorities, clear arguments for greater access to broadband as well have developed local broadband plans and committed as identifying the services enabled by broadband. funding to match the government’s contribution. These projects are now entering the procurement phase; the scheme received state aid approval from the European LOOKING FORWARD Commission on November 20, 2012. A smaller, £20 Countries today are prioritizing the importance of policy million fund—the Rural Communities Broadband Fund—is leadership, as shown by the growth in the number of targeted at small-scale broadband projects in rural areas, national broadband plans. International organizations and has over 50 projects under consideration. The government has also committed £150 million also recognize the importance of policy leadership. Every to establish an Urban Broadband Fund, which will year, ITU hosts a Global Symposium for Regulators and support projects in major cities to provide high-speed Global Regulators-Industry Dialogue (GRID) to debate connectivity—both fixed and wireless, with a strong the trends transforming the ICT environment and to emphasis on small- and medium-sized enterprises and on stimulating demand for high-speed broadband services. consider their impact on the regulatory environment, The strategy foresees “private sector investment freed with the outcomes published in the form of best-practice from unnecessary barriers, supported by government guidelines.17 The Broadband Commission for Digital funding where the market cannot reach unaided.” A Development meets twice annually to consider the package of measures was announced on September 7, trends and issues specific to broadband policy and 2012, aimed at supporting and enabling private-sector investment, including streamlining planning restrictions on publishes its annual State of Broadband report, providing broadband infrastructure and producing new guidance to a snapshot of the latest broadband market trends. local authorities in relation to the laying of fiber and digging At a time of rapid technological evolution and of trenches in streetworks schemes. heightened economic uncertainty, it is vital for The strategy is technology-neutral. It recognizes that a mix of technologies—fixed, wireless, and satellite— governments, the industry, and regulators to work are needed to deliver superfast broadband throughout together to review and regularly update regulatory and the United Kingdom: one technology choice will not be policy frameworks. In this way we can ensure that the suitable for all circumstances. However, extending high- frameworks are flexible, appropriate, and regularly capacity fiber optic deeper into the network will be a key feature of the United Kingdom’s network going forward. updated, can achieve optimal outcomes for network Progress is reported in the Ofcom Infrastructure Report, deployment and national economic competitiveness. with 65 percent of premises now able to access superfast broadband and average download speeds having risen to NOTES 12.7 Mb/s. 1 ITU 2002. Sources: UK Government, Department for Culture, Media & Sport; 2 Katz 2011. BIS 2010; Ofcom 2012. 3 See, for example, comments by US Vice-President Joe Biden, Note: The United Kingdom also supports European targets for who said at Seneca High School, on July 1, 2009, “The bottom minimum broadband speeds of 30Mb/s to every home and line is, you can’t function—a nation can’t compete in the 21st business in Europe by 2020, and 50 percent take-up of 100 century—without immediate, high-quality access for everything Mb/s services by 2020. from streaming video to information overline. . . . Getting broadband to every American is a priority for this Administration” (Nephin 2009). See also comments by Neelie Kroes, Vice- President of the European Commission responsible for the Digital Agenda, who asked at the European Telecom Network Operators Connecting Europe Facility Conference in Brussels in October 2012, “Are we going to take our place as the connected, competitive continent? Or are we going to stay antiquated and analogue?” (Kroes 2012). 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- 84. 1.4: The Importance of National Policy Leadership 4 Stiglitz 1999. In his chapter in Providing Global Public Goods: Horton, B. 2012. “Setting National Broadband Policies, Strategies and Managing Globalization, Stiglitz argues that telecommunications Plans.” In Trends in Telecommunication Reform 2012. Geneva: ITU. and the Internet are themselves global public goods; however, Available from www.itu.int/ITU-D/treg/publications/trends12.html. most observers agree that it is the knowledge and information provided over the Internet that are non-rivalrous and non- ITU. 2002. World Telecommunication Development Report 2002: excludable, rather than the networks (which may be rivalrous and Reinventing Telecoms. Geneva: ITU. Available at http://www.itu.int/ excludable). ITU-D/ict/publications/wtdr_02/. 5 According to the report Telecom Operators: Let’s Face It (Exane — —. 2009. Confronting the Crisis: ICT Stimulus Plans for Economic — BNP Paribas-Arthur D. Little 2012), telecommunication companies Growth. Geneva: ITU. Available at www.itu.int/osg/csd/emerging_ face the choice of becoming mega operators with a global trends/crisis/confronting_the_crisis_2.pdf. footprint, local heroes focusing mainly on their national market or — —. 2012. Trends in Telecommunication Reform 2012. Geneva: ITU. — immediate local markets, or engaging in a play for infrastructure Available at www.itu.int/ITU-D/treg/publications/trends12.html. only. Katz, R. L. 2011. “The Impact of Broadband on the Economy: Research 6 ITU 2009. to Date and Policy Issues.” In Trends in Telecommunication Reform 7 For example, under the Connecting Europe Facility (CEF), it is 2010–2011: Enabling Tomorrow’s Digital World. Geneva: ITU. proposed to spend €50 billion over six years, from 2014 to 2020, 19–57.Available at www.itu.int/ITU-D/treg/publications/trends10. with €9.2 billion earmarked for broadband and digital services html. to promote growth, jobs, and competitiveness through targeted Kelly, T. and C. M. Rossotto. 2012. Broadband Strategies Handbook. infrastructure investment at the level of the European region. This Washington, DC: World Bank. Available at https://openknowledge. will support the rollout of high-performing, sustainable, and joined- worldbank.org/handle/10986/6009. up trans-European networks in the fields of transport, energy, and broadband and digital services. Kroes, N. 2012. “Connecting Europe with Fast Broadband.” Speech delivered at the Connecting Europe Facility Conference, 8 Alcatel Lucent Bell Labs 2011. The total impact of New Zealand’s Brussels, October 2. European Commission Press Release, Ultra-Fast Broadband (UFB) network of $NZ 32.8 billion over Speech 12/68. Available at http://europa.eu/rapid/press-release_ twenty years include 5.9 $NZ billion for healthcare, 3.6 billion $NZ SPEECH-12-668_en.htm#PR_metaPressRelease_bottom. for education, 14.2 $NZ billion for business, and 9.1 $NZ billion for dairy. Estimations of the economic benefits to New Zealand Nephin, D. 2009. “Biden Announces Program to Expand Broadband of UFB applications take into account both increased returns and Internet Access for Rural Areas at Pa. Stop.” StarTribune.com, savings. Minneapolis-St. Paul, Minnesota. July 1. Available at http://www. startribune.com/templates/Print_This_Story?sid=49613912. 9 See, for example, calls by Prime Minister David Cameron for social media services to be monitored and/or shut down during the Ofcom. 2012. Infrastructure Report: 2012 Update. Available at http:// riots in the United Kingdom in August 2011, available from www. stakeholders.ofcom.org.uk/binaries/research/telecoms-research/ guardian.co.uk/media/2011/aug/11/david-cameron-rioters-social- infrastructure-report/Infrastructure-report2012.pdf. media. Stiglitz, J. 1999. “Knowledge as a Global Public Good.” In Providing 10 ITU 2009. Global Public Goods: Managing Globalization. 308–25. Available at http://cgt.columbia.edu/files/papers/1999_Knowledge_as_Global_ 11 ITU 2012. Public_Good_stiglitz.pdf. 12 Horton 2012. United Nations Broadband Commission. 2012. The State of Broadband 13 Kelly and Rossotto 2012. 2012: Achieving Digital Inclusion for All. Geneva: ITU. Available at http://www.broadbandcommission.org/Documents/ 14 Statement by Mr Julius Genachowski, Chairman of the US Federal bb-annualreport2012.pdf. Communications Commission (FCC) to the New York meeting of the Broadband Commission for Digital Development on 23 September 2012. 15 “State Aid: Commission Consults on Draft Guidelines for Broadband Networks.” Available at http://europa.eu/rapid/ pressReleasesAction.do?reference=IP/12/550&format=HTML&age d=0&language=EN&guiLanguage=en. 16 BIS 2010. 17 See ITU’s regulatory website, www.itu.int/ITU-D/treg/index.html; for details of the latest Global Symposium for Regulators, GSR- 2011, see www.itu.int/ITU-D/treg/Events/Seminars/GSR/GSR11/ index.html; and for previous GSR events, see www.itu.int/ITU-D/ treg/Events/Seminars/GSR/index.html. REFERENCES Alcatel Lucent Bell Labs. 2011. “Building the Benefits of Broadband: How New Zealand Can Increase the Social & Economic Impacts of High-Speed Broadband.” Wellington, New Zealand: Alcatel- Lucent. Available at http://img.scoop.co.nz/media/pdfs/1202/ Building_the_Benefits_of_Broadband_WhitePaper.pdf. BIS (Department for Business, Innovation & Skills). 2010. Britain’s Superfast Broadband Future. London: BIS. Available at http:// www.culture.gov.uk/publications/7829.aspx. Exane BNP Paribas-Arthur D. Little. 2012. Telecom Operators: Let’s Face It. London and Paris: Exane BNP Paribas and Arthur D. Little. Available at http://www.adlittle.com/downloads/tx_adlreports/ Arthur_D_Little_Exane_Study-Synthesis-2012.pdf. 60 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 85. 1.4: The Importance of National Policy Leadership Appendix A: Selected economies with national broadband policies, 2012 Year policy Country/Economy Policy available? was adopted Type Title/details Afghanistan Yes 2008 Strategy Afghanistan National Development Strategy: 1387–1391 (2008– 2013) Albania Yes 2008 Strategy E-Albania Algeria Yes 2008 Strategy E-Algérie 2013 Andorra Yes 2009 Policy Universal Access Service Antigua & Barbuda Yes 2012 Strategy GATE 2012 Argentina Yes 2010a Plan Plan Nacional de Telecomunicaciones Argentina Conectada Australia Yes 2009 Plan National Broadband Network Austria Yes 2010 Plan Breitband strategie 2020 Azerbaijan Planned Pending Bahrain Yes 2010 Policy National BB Network for the Kingdom of Bahrain Bangladesh Yes 2009 Universal Broadband National Policy Act 2009 Access Service Barbados Yes 2010 Plan National Information and Communication Technologies Strategic Plan of Barbados 2010–2015 Belgium Yes 2009 Plan België: digitaal hart van Europa Belize Yes 2011 Strategy ICT National Strategy Benin Planned Bhutan Yes 2008 Plan National Broadband Master Plan Implementation Project (NBMIP) Botswana Yes 2004 Strategy Botswana’s National ICT Policy Brazil Yes 2010 Plan National Broadband Plan (Plano Nacional de Banda Larga – PNBL); Costa's Plan Brunei Darussalam Yes 2008 Plan National Broadband Blueprint Bulgaria Yes 2009 Strategy National Strategy of broadband development in Republic of Bulgaria Burkina Faso Yes 2006 Policy Lettre de politique sectorielle 2006–2010 Burundi Yes 2011 Project Burundi/ICT: National projects for broadband connectivity; Burundi Community Telecentre Network (BCTN) Canada Yes 2010 Plan Broadband Canada: Connecting Rural Canadians Cape Verde Planned Pending Central African Rep. Yes 2006 Strategy Politique, Stratégies et plan d'actions de l'édification de la Société de l'Information en République Centrafricaine Chad Yes 2007 Plan Plan de développement des technologies de l’Information et de la Communication au Tchad ou PLAN NICI Chile Yes 2010 Strategy Strategy for Digital Development; La Agenda Digital del Gobierno de Chile para el período 2010–2014/ICT as a part of Chile’s Strategy for Development: Present Issues and Challenges The Global Information Technology Report 2013 | 61 @ 2013 World Economic Forum
- 86. 1.4: The Importance of National Policy Leadership Year policy Country/Economy Policy available? was adopted Type Title/details China Yes 2010 Initiative Three Network Convergence—National Government Investment Colombia Yes 2011 Plan Live Digital—Vive Digital Comoros Planned Congo Yes 2009 Program West Africa Cable System (WACS) Cook Islands Yes 2003 Policy National ICT Policy Costa Rica Yes 2012 Strategy Estrategia Nacional de Banda Acha Côte d'Ivoire Yes 2010 Strategy Objectifs Strategiques du Gouvernment de Côte d’Ivoire en Matiere de Telecommunications et de TIC Croatia Yes 2011 Strategy Strategy for Broadband Development in the Republic of Croatia for 2012–2015 Cuba Planned Cyprus Yes 2012 Strategy Digital Strategy for Cyprus, which includes the Broadband Plan Czech Republic Yes 2011 Strategy Digital Czech Republic—State policy in electronic communications Denmark Yes 2010 Plan Digital work program by the Minister of Science, Technology and Innovation. Djibouti Yes 2004 Program Plan d’action national pour l’exploitation des TIC en République de Djibouti pour le développement national, EASSy Dominican Republic Yes 2007 Program Conectividad Rural de Banda Ancha E-Dominicana (includes rural broadband connectivity program) Ecuador Yes 2011 Plan Estrategia Ecuador Digital 2.0 and BB PLAN Egypt Yes 2011 Plan National Broadband Plan: A Framework for Broadband Development Equatorial Guinea Yes 2010 Estonia Yes 2006 Strategy Information Society Development Plan 2013 Ethiopia Yes 2005 Policy ICT Policy Fiji Yes 2011 Policy National Broadband Policy Finland Yes 2005 Project Broadband 2015 Project; Kainuu Information Society Strategy 2007–2015 France Yes 2010 Plan Plan national très haut débit Gabon Yes 2011 Strategy Digital Gabon: vaste Programme de réformes multi sectorielles dont la finalité est de faire du Gabon un Pays Emergent, à travers les pilliers suivants: Gabon Industriel, Gabon vert et Gabon des Services Gambia Yes 2008 Plan The Gambian ICT4D-2012 Plan Germany Yes 2009 Strategy Breitbandstrategie der Bundesregierung Ghana Yes 2010 Strategy Broadband Wireless Access Greece Yes 2006 Plan Digital Strategy 2006–2013 Grenada Yes 2006 Strategy Information and Communication Technology (ICT): A Strategy and Action Plan for Grenada: 2006–2010 Guinea Yes 2009 Plan Plan National de frequences/Plan de développement de l’infrastructure nationale d’information et de communication de la République de Guinée 2001–2004 Guyana Yes 2011 Project E-Guyana 62 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 87. 1.4: The Importance of National Policy Leadership Year policy Country/Economy Policy available? was adopted Type Title/details Honduras Yes 2010 Policy Resolución NR 005/10—Normativa que regulará la prestación de servicios de telecomunicaciones con conectividad de banda ancha Hungary Yes 2010 Plan Digital Renewal Action Plan Hong Kong SAR Yes 2008 Strategy Digital 21 Iceland Yes 2005 policy Telecom Policy Statement 2005–2010; new policy statement coming India Yes 2011 Plan National Optical Fibre Network Indonesia Yes 2010 Strategy Priorities of the Ministry of Communication and Information Technology Year 2010–2014 Iraq Planned Ireland Yes 2008 Strategy Ireland's Broadband Strategy Israel Yes 2012 initiative The Communication Initiative: fiber-based national broadband network Italy Yes 2010 Plan Italia Digitale (Digital Italy, Plan) Jamaica Yes 2007 Strategy National ICT Strategy Japan Yes 2010 Plan New Broadband Super Highway (Haraguchi vision II) Jordan Yes 2007 Strategy National ICT Strategy of Jordan Kazakhstan Yes 2010 Strategy Programme of ICT Development Kenya Yes 2006 Plan ICT MasterPlan 2012-2017 Korea, Rep. Yes 2009 Plan Ultra Broadband Convergence Network Latvia Yes 2005 Strategy Broadband development strategy for 2006–2012 Lebanon Yes 2008 Strategy Lebanese Broadband Stakeholders Group (LBSG) Liberia Planned National fiber backbone network Liechtenstein Yes 2006 Universal Communications Act—Law on Electronic Communication Access Service Lithuania Yes 2005 Strategy Strategy of Broadband Infrastructure Development in Lithuania in 2005–2010 Luxembourg Yes 2010 Strategy Stratégie nationale pour les réseaux à “ultra-haut” debit–L’ “ultra- haut” débit pour tous Macedonia, FYR Yes 2005 Strategy National Strategy for the Development of Electronic Communications with Information Technologies Malawi Yes 2003 Project An Integrated ICT-led socioeconomic development policy for Malawi Malaysia Yes 2010 Plan National BB Implementation NBI Malta Yes 2012 Policy Provision of access at a fixed location Marshall Islands Planned Mauritius Yes 2012 Policy National Broadband Policy 2012–2020 (NBP2012) Mexico Yes 2011 Strategy Digital Agenda Micronesia Planned Moldova Yes 2010 Program Hotărâre cu privire la aprobarea Programului de dezvoltare a accesului la Internet în bandă largă pe anii 2010-2013 Mongolia Yes 2011 Program National Program on Broadband Network up to 2015 The Global Information Technology Report 2013 | 63 @ 2013 World Economic Forum
- 88. 1.4: The Importance of National Policy Leadership Year policy Country/Economy Policy available? was adopted Type Title/details Montenegro Yes 2012 Strategy Strategy for the Development of Information Society 2012– 2016—Montenegro–Digital Society Morocco Yes 2012 Plan Plan national pour le développement du haut et très haut débit au Maroc Namibia Yes 2009 Policy Telecommunications Policy for the Republic of Namibia Nepal Planned Currently a draft under consultation Netherlands Yes 2010 Strategy Digital Agenda New Zealand Yes 2010 Plan Ultra-fast broadband initiative, Five Point Government Action Plan for faster broadband Nicaragua Planned Nigeria Planned Policy National ICT policy—draft Norway Yes 2001 Plan Action Plan on Broadband communication Oman Yes 2012 Strategy National Broadband Strategy Pakistan Yes 2007 Program National Broadband policy 2004, National Broadband Programme 2007 Panama Yes 2008 Strategy National ICT Strategy 2008–2018—la Autoridad de Innovación Gubernamental Papua New Guinea Yes 2011 Policy National ICT Policy and PNG LNG Fibre cable project Paraguay Yes 2011 Plan Paraguay 2013 Conectado y Plan Nacional de Telecomunicaciones—PNT Peru Yes 2010 Plan Plan Nacional Para el Desarrollo de la Banda Ancha en el Perú Philippines Yes 2011 Strategy The Philippine Digital Strategy, Transformation 2.0: Digitally Empowered Nation Poland Yes 2008 and 2010 Strategy The Strategy for the Development of the Information Society and Law in Poland until 2013 Mega-Bill: The act on supporting the development of telecommunications services and networks Portugal Yes 2010 Strategy Digital Agenda 2015 (2010–2015), Qatar Yes 2011 Plan Qatar’s National ICT Plan 2015: Advancing the Digital Agenda; Qatar National Broadband Network (Q.NBN) Romania Yes 2007 Strategy The Regulatory Strategy for the Romanian Electronic Communications Sector for 2007–2010 Russian Federation Yes 2010 Strategy Information Society Strategy Information Society Programme Rwanda Yes 2006 Plan Regional Connectivity Infrastructure Program (RCIP) Samoa Yes 2010 Plan Broadband Spectrum Plan Saudi Arabia Yes 2010 Universal USF strategic Plan, Kingdom's strategy for the deployment of Access Service broadband services (waiting for official approval) Senegal Planned Serbia Yes 2009 Strategy BB Strategy till 2012, Стратегију развојa широкопојасног приступа у Републици Србији до 2012. Године (Strategy for the development of broadband in the Republic of Serbia until 2012) Singapore Yes 2005 Strategy Intelligent Nation 2015 (or iN2015) Slovak Republic Yes 2006 Program Operačný Program Informatizácia Spoločnosti (Operational Program- Information society) 64 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 89. 1.4: The Importance of National Policy Leadership Year policy Country/Economy Policy available? was adopted Type Title/details Slovenia Yes 2008 Strategy Strategija razvoja širokopasovnih omrežij v Republiki Sloveniji (Broadband Network Development Strategy) Solomon Islands Planned South Africa Yes 2010 Policy Broadband Policy for SA Spain Yes 2010 Plan Plan Avanza: Plan Avanza: 2005, Plan Avanza 2 aprobado el 16/07/2010 Sri Lanka Yes 2012 Plan 2012 - HSBB NBP to be launched, e- Sri Lanka St. Kitts and Nevis Yes 2006 Plan National Information and Communications Technology (ICT) Strategic Plan St. Lucia Planned St. Vincent Planned and the Grenadines Sudan Planned Sweden Yes 2011 Strategy BB Strategy for Sweden Switzerland Yes 2007 Universal The universal service with regard to telecommunications Access Service Tanzania Yes 2004 Project National Information Communication and Technology Broadband Backbone (NICTBB) Thailand Yes 2010 Policy The National Broadband Policy Taiwan, China Yes 2011 Policy Broadband for Villages and Broadband for Tribes Togo Planned Tonga Yes 2011 Project Tonga-Fiji Connectivity Project : Pacific Regional Connectivity Program (PRCP) Trinidad and Tobago Yes 2008 Strategy Trinidad & Tobago’s National Information & Communication Technology Strategy-Fastforward—Accelerating into the Digital Future Tunisia Yes 2012 policy Turkey Yes 2006 Strategy Information Society Strategy 2006–2010; Ninth Development Plan 2007–2013 Uganda Yes 2009 Strategy Uganda Broadband Infrastructure Strategy National Position Paper United Kingdom Yes 2010 Strategy Britain’s Superfast Broadband Future, Broadband Delivery UK United States Yes 2010 Plan Connecting America: The National Broadband Plan Vanuatu Planned Vietnam Yes 2010 Plan Master Plan of Viet Nam, from 2010 to 2015 and Prime Minister's Decree 1755/QĐ-TTg on the approval of a National Strategy on Transforming Viet Nam into an advanced ICT country Zimbabwe Yes 2005 Initiative Connection to the undersea cable initiatives promotes broadband usage Source: ITU/UNESCO Broadband Commission for Digital Development (www.broadbandcommission.org), based on the ITU ICT Eye regulatory database, available at https://www.itu.int/ITU-D/ icteye/. The Global Information Technology Report 2013 | 65 @ 2013 World Economic Forum
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- 91. CHAPTER 1.5 Sustainable, long-term growth in the European Union (EU) is vital to the overall health of the world economy. Fiber Broadband: A For a developed region such as the European Union, a significant proportion of growth is likely to come from Foundation for Social and knowledge-based industries, underpinned by information and communication technologies (ICTs). Indeed, the Economic Growth European Commission’s Europe 2020 vision describes such a future for the region in the Digital Agenda.1 SEAN WILLIAMS The foundation for digital prosperity is fiber BT broadband Internet access, often referred to as superfast broadband. In describing the economic benefits of Internet adoption, a report for the McKinsey Global Institute says: “[broadband] infrastructure, the backbone of the entire Internet ecosystem, is an irreplaceable prerequisite. It creates the platforms upon which users, and organizations experience the Internet, and upon which entrepreneurs and businesses innovate.”2 Indeed, superfast broadband access has the potential to transform local economies, businesses, households, and public services. It will help improve the performance of existing firms, enable new businesses to emerge, and encourage flexible working patterns. Superfast broadband is key to opening global markets to regions previously denied access, providing new job opportunities, and boosting productivity. Statistical evidence of the positive economic impact of broadband infrastructure has existed for some years. According to the Broadband Commission, a joint body of the United Nations Educational, Scientific and Cultural Organization (UNESCO) and the International Telecommunication Union (ITU), every 10 percent increase in broadband penetration results in additional growth of 1.3 percent in national gross domestic product (GDP).3 Similarly, in a 2011 study across 33 countries in the Organisation for Economic Co-operation and Development (OECD) by Chalmers University of Technology, consultancy Arthur D. Little and ICT vendor Ericsson found that doubling the broadband speed for an economy increases GDP by 0.3 percent.4 New research now available from Regeneris Consulting provides even greater detail about the potential economic impact of superfast broadband in urban and—crucially—less-developed rural areas, as demonstrated later in this chapter.5 Investment in fiber broadband also has the potential to deliver social goods, for example by improving public service levels in areas such as health, education, e-government, and democratic participation at lower cost than would be available offline. Evidence for social goods is anecdotal rather than statistical. The idea that broadband infrastructure can drive economic development has been championed for some time. Indeed, broadband infrastructure, coupled with a functioning and fair market for access and services, is central to Europe 2020 and the Digital Agenda for Europe;6 it underlies similar strategies adopted by The Global Information Technology Report 2013 | 67 @ 2013 World Economic Forum
- 92. 1.5: Fiber Broadband Figure 1: Economic impacts of superfast broadband Flexible working patterns New business Improved performance of existing firms Source: Regeneris Consulting, 2012. OECD governments, including the UK government;7 on environments as diverse as capital cities and and is espoused on a global scale by the Broadband economically deprived rural regions. Second, it aims to Commission.8 articulate technical and market solutions that can meet However, much of the thinking behind these the challenge of the current economic climate. strategies predates the euro crisis. We need to recognize that the effects of the global financial crisis that began in ECONOMIC IMPACT 2007 are still being felt more than five years later—and BT recently commissioned Regeneris Consulting to even now, there is no immediate end in sight. assess the potential economic benefits of BT’s £2.5 We no longer operate in a world where “build it billion investment in fiber broadband in the UK market,9 and they will come” is a viable strategy for developing focusing on four areas: national-scale infrastructure. Nor are communication markets currently in a healthy state. Revenues are • Norfolk and Suffolk, a rural area; shrinking for telecommunication providers at the same • Caerphilly, a town in Wales; time that operating costs are increasing because of the • Sunderland, a city in the northeast of England; and rising demand for data on networks. • London, the United Kingdom’s capital city. How can the global, international, and national visions for universal broadband Internet access be As businesses increasingly move into the digital fulfilled? Should these visions be put on hold until more realm, fast Internet access is arguably more important favorable economic conditions emerge, or should they than conventional physical infrastructures in supporting even be abandoned? vital flexibility. Where fiber broadband is prevalent, No, the big vision still holds promise. However, businesses can be encouraged to remain in or new means of execution—in terms of both technology relocate to regions previously excluded from traditional and market dynamics—are required for an era where regeneration, creating jobs and bringing economic the public purse is tightly constrained and the ability of growth to those areas. private firms to raise capital is diminished. Supplying commercial premises with fiber This chapter advances the debate first by reviewing broadband will help businesses grow and benefit the recent independent research from the economic local economy by facilitating flexible working patterns, consultancy Regeneris Consulting, detailing the enabling new startup businesses, and helping to improve economic impact of high-speed broadband infrastructure the performance of existing businesses (see Figure 1). 68 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 93. 1.5: Fiber Broadband Improved performance of existing firms background. The burden of security and upgrade falls to Fiber broadband will allow businesses to operate more the service provider and not to the business. efficiently and to develop new products and services: The carrot of abundant fiber broadband can also encourage firms with purely digital business models to • Small and medium-sized firms will be able to relocate to previously underdeveloped areas. take advantage of the latest generation of online collaboration tools—such as file and document Flexible working patterns sharing, shared workspaces, and high-definition Widespread availability of fiber broadband will allow more video conferencing—that, before the advent of fiber flexible working patterns, opening up new employment broadband, only large enterprises could afford to opportunities and enhancing the productivity of existing exploit. staff. With fiber broadband, employees will be able to access data and applications from home, on the move, • Real-time online collaboration among colleagues or at the premises of customers or suppliers with the and business partners can accelerate decision same alacrity as they can in the office. making and time to market, and reduce delays and Regeneris estimated the cumulative impact on jobs the need for business travel. By reducing or even and gross value-added (GVA) among new and existing eliminating the requirement to travel, it can reduce firms exploiting faster, next-generation broadband a firm’s carbon footprint and improve employees’ services over 15 years. In conducting the analysis, it work-life balance. was assumed that the uptake and exploitation of faster services will, in time, approach those currently found for • Several people can share the same connection and ADSL services. Regeneris drew on research from across not notice any degradation in performance, even if Europe to inform these assumptions. they are using bandwidth-hungry applications such as video conferencing or uploading large files. Findings in detail For any one location—whether a rural area, a town, or a • In all types of business, interaction with customers city—Regeneris found that fiber broadband could create and suppliers can also be enhanced—for example, between £143 million and £19.8 billion in additional GVA. by enabling slicker, more interactive e-commerce This equates to an annual increase in GVA of between sites, and by reducing the time needed to upload 0.3 percent and 0.5 percent. product demonstrations and how-to videos to both For the rural area of Norfolk and Suffolk, for example, the business’s own site and social media sites such Regeneris found that fiber broadband could lead to: as YouTube. • an annual increase in GVA of 0.3 percent per annum Regeneris expects knowledge-based industries, over 15 years: every £1 a business invests in fiber and the places where they are most concentrated, to broadband in this rural area will create nearly £15 in exploit faster broadband most effectively and generate additional GVA for the UK economy; the greatest impacts. For example, the time required for transferring large files such as videos, graphic designs, or • roughly 1,470 business startups and support for 7,780 software applications can be cut from hours to minutes. home workers as a result of cloud computing; and New businesses • around 1,810 jobs created through business startups Fiber broadband is expected to help greater numbers of and increased levels of trading at existing businesses. new businesses emerge by reducing barriers to entry in certain sectors. Although there are many ways in which For the UK town of Caerphilly, Regeneris found that this can occur, cloud computing is perhaps the most fiber broadband could lead to: significant because it dramatically reduces the required upfront capital and ongoing support costs of setting up • an annual increase in GVA of 0.5 percent per annum in business and allows steady, flexible growth. over 15 years: every £1 a business invests in fiber Superfast connectivity will also help firms of all broadband in this town will create nearly £16 in sizes exploit cloud computing so they can scale their additional GVA for the UK economy; information technology (IT) systems dynamically to fit their business needs, obviating the requirement for • roughly 140 business startups and support for 1,030 firms to invest in server hardware and software licenses. home workers as a result of cloud computing; and This can further help relieve the IT burden by making remote data storage and backup easy to operate in the • around 225 jobs created through business startups and increased levels of trading at existing businesses. The Global Information Technology Report 2013 | 69 @ 2013 World Economic Forum
- 94. 1.5: Fiber Broadband For the UK city of Sunderland, Regeneris found that SOCIAL IMPACT fiber broadband could lead to: What applies to businesses in terms of increased efficiency and effectiveness can also apply to public • an annual increase in GVA of 0.4 percent per annum services. Online delivery of services can unlock over 15 years: every £1 a business invests in fiber significant cost savings and serve to increase levels of broadband in this city will create nearly £14 in satisfaction among citizens. additional GVA for the UK economy; Nevertheless, the social impact of superfast broadband is more difficult to quantify than its impact on • roughly 320 business startups and support for 1,580 jobs and economic performance. Real benefits around home workers as a result of cloud computing; and improved access to lifelong learning, social inclusion, more flexible working possibilities, and enhanced social • around 436 jobs created through business startups capital may be realized through superfast broadband.12 and increased levels of trading at existing businesses. Also evident is the blurred area where the wider economic impacts of superfast broadband take-up For London, the United Kingdom’s capital city, translate into social goods such as retained and created Regeneris found that fiber broadband could lead to: jobs, reduced transport congestion that in turn reduces costs, enabled virtual agglomeration, and improved • an annual increase in GVA of 0.5 percent per annum economic adaptability and resilience.13 over 15 years: every £1 a business invests in fiber Enough anecdotal evidence has accumulated over broadband will create nearly £10 in additional GVA the years to present a body of potential best practice, for the UK economy; even though it is not easy to measure social impacts objectively. Some of this evidence is presented below. • roughly 6,600 business startups and support for 73,000 home workers as a result of cloud Citizen services computing; and In 2010, the Guldborgsund Municipality in Denmark opened what is arguably the first video-linked citizen • around 26,200 jobs created through business services center in Europe.14 The center enables citizens startups and increased levels of trading at existing in the remote region to receive one-on-one advice from businesses. government officials at a much lower cost than a staffed center could provide. Without this cost savings, the In some economically deprived areas of the United center would have had to close, depriving the citizen of Kingdom, these dynamics are already at work. For this service. Other Danish municipalities are looking to example, a business in Northern Ireland called Print It adopt the concept. For Me saves two hours a day that was previously spent On a more humble scale, the cost to the United waiting for files to download.10 It also saves £7,500 a Kingdom’s Driver Vehicle Licensing Agency of issuing year by using cloud-based backup for its IT systems, vehicle excise licenses has been cut by 45 percent since replacing onsite equipment. The business concept is the process was transferred online, saving around £8 relatively simple, but it would not be possible without the million a year. The new system was used by 18 million ability to handle large files quickly over fiber broadband. people in 2008.15 These types of businesses attract creative, tech- Fiber broadband makes such systems intuitive and savvy people who, in turn, bring prosperity to the region. fluid to use. With this in mind, Cornwall and the Isles of Scilly in the far west of England aim to become one of the best- Healthcare connected rural areas in Europe.11 These dynamics can also be applied to health services. In September 2010, BT announced an investment For example, the US Veterans Health Administration of £78.5 million, backed up by a further £53.5 million (VHA), which provides healthcare for approximately 6 from the European Regional Development Convergence million military veterans, makes extensive use of e-health funds and investment from the local authority of Cornwall technologies.16 Telemedicine is used in radiology, mental and the Isles of Scilly. The intention was, and remains, to health, cardiology, pathology, dermatology, and in-home boost the local economy by attracting and retaining high- care tele-consultations for patients with spinal cord tech, high-growth, creative, and low-carbon businesses injuries and those with other chronic conditions. that make use of high bandwidth. The current and previous US administrations According to local authority leaders, the rollout have cited the VHA as a model for the rest of the US will create an estimated 4,000 new jobs and protect a healthcare industry for providing efficient and effective further 2,000 jobs that are currently under threat from medical care. Other health authorities are looking to the recession. learn from the VHA’s techniques.17 70 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 95. 1.5: Fiber Broadband Of course, hospitals cannot be replaced by The problem here is one of cost of deployment broadband connections, but many health services lend in a capital-constrained environment: mobile requires themselves to online delivery. Among these telemedicine expensive new infrastructure and wireless spectrum is services are booking appointments; consulting with rationed, whereas fixed wire can leverage the telephone experts; and providing information about healthy diet, infrastructure already in place. exercise, treatment, and recovery after illness or treatment. Furthermore, wireless uses a shared resource for connection to the customer. Thus, the more bandwidth Education customers consume, the more spectrum and/or base With fiber broadband, similar models can also be stations are required, so costs increase rapidly with applied to education. Academic establishments can offer uptake. Eventually this becomes uneconomic. Fixed- remote access to live lectures and self-paced tuition as wire broadband has a far more graceful capacity-uplift part of lifelong learning, bringing access to education roadmap, even when hybrid fiber/copper solutions, such to those who—because of a disability or for economic as fiber-to-the-cabinet (FTTC), are deployed. or social reasons—are unable to regularly attend an Arguably, a pure fiber infrastructure—where a fiber academic institution. connection is provided to every subscribing premise Numerous examples of this are already in use across (FTTP, also known as FTTx or FTT-home/-premise/- academia, which has benefitted from the high-bandwidth subscriber)22—is unlikely ever to be capacity-constrained Joint Academic Network (JANET) for many years. because operators can simply add wavelengths to One such instance is the Blackboard virtual learning increase capacity if needed. However, the economic environment running at Bradford University in the north of costs of universal FTTP delivery are prohibitive. England, which enables students and academic staff to That said, high-speed mobile data does have a role collaborate remotely on learning materials.18 to play in a superfast infrastructure, as an in-fill technology Local schools can also use remote-access, shared- to reach remote communities where fixed line is learning facilities to enable parents to participate more in uneconomic (see the section “Reaching the rest,” below). their children’s education and build a sense of community around the school. One example of this is Radio Sandaig, Why FTTC? run by Sandaig primary school in Scotland.19 Where insufficient funding for the universal deployment Furthermore, fast broadband access enables of FTTP but an established copper telephone existing health and education establishments to amplify infrastructure exists, then FTTC makes economic the services they can offer in the region by tapping into sense because it leverages assets already in place, the expertise available in national and even international minimizes local disruption during rollout, and avoids the centers of excellence. most expensive and complex replacement of individual connections to individual premises while still delivering AFFORDABLE FIBER very high broadband speeds. How will the vision for a sustainable, growing economy Dogmatic attachment to FTTP as the only and improved society built on fiber broadband be achieved technology solution appropriate for fiber networks when the public coffers are all but empty and private is actually a barrier to investing in fiber broadband capital expenditure is laboring under severe constraint? because it massively increases the cost and disruption, The answer to this lies in two places: the technology undermines the business case, and thus delays used for fiber broadband, and the dynamics of a deployment.23 competitive market for access and value-added services. The criticism leveled at FTTC is that it is not future- Deployment needs to be as efficient as possible, making proofed. Further expenditure will be incurred in the the best use of the resources available and minimizing future to upgrade the network to FTTP as demand for disruption associated with the transition.20 bandwidth increases. However, experience has shown that there is plenty of headroom in FTTC technology for Why not mobile? bandwidth increases. With the arrival of 4G wireless infrastructure in various BT’s FTTC network in the United Kingdom is parts of Europe, the mobile phone network now offers currently able to deliver up to 80 Mb/s downstream connection speeds that potentially match those of and up to 20Mb/s upstream speeds (depending on line fixed broadband. Tests show that early 4G networks lengths).24 This is double the speed obtainable from are typically capable of delivering 36 Mb/s download the technology available only 18 months ago, and is and 16 Mb/s upload speeds.21 Economically loaded comfortably in excess of the Digital Agenda’s aim of a commercial networks in the field are, realistically, likely minimum coverage of 30 Mb/s.25 to be considerably below these speeds. So could Technology providers are developing solutions mobile, rather than fixed wire, provide a viable economic that could deliver over 200 Mb/s on FTTC. Future infrastructure for superfast broadband? The Global Information Technology Report 2013 | 71 @ 2013 World Economic Forum
- 96. 1.5: Fiber Broadband Figure 2: Growth of superfast broadband household penetration, European Union 15 Belgium 12 Denmark France Penetration (% all households) Germany Italy 9 Netherlands Portugal Spain 6 Sweden United Kingdom United States 3 0 2002 Q2 2002 Q4 2003 Q2 2003 Q4 2004 Q2 2004 Q4 2005 Q2 2005 Q4 2006 Q2 2006 Q4 2007 Q2 2007 Q4 2008 Q2 2008 Q4 2009 Q2 2009 Q4 2010 Q2 2010 Q4 2011 Q2 2012 Q2 2011 04 Source: BSG, 2012. technologies, such as G.fast, could see speeds BT is making the biggest purely commercial measured in gigabits over the final copper connection.26 investment in fiber access without state aid in Europe, That said, local factors such as housing density and and is rolling out this fiber more quickly than any other copper line length also have a significant impact on the provider. Already about 60 ISPs are testing BT’s fiber economics of technology choice. product.28 Its fiber broadband package has the same headline price as copper-based broadband to encourage Competitive market rapid customer uptake. The other foundation for achieving an affordable and Early indications show that this strategy is working. sustainable rollout of fiber broadband is a market for Plotted against similar fiber rollouts in Europe and access and value-added services that serves to keep Japan, BT appears to be ahead of the curve in terms down consumer prices while ensuring high service of penetration and subscriber uptake (see Figures 2, 3, levels and continued investment in the network. An and 4). The UK government has committed to a target of environment that supports a large number of wholesale having the best superfast broadband in Europe by 2015. telecommunication providers and retail Internet service providers (ISPs) can enable this; it is also in the interests REACHING THE REST of consumers and the major network operators. If superfast broadband is to fulfill its promise of The UK example shows that a healthy number of contributing to social and economic growth in the most wholesale telecommunication providers and retail ISPs impoverished areas of the globe, it needs to connect all is an important driver for achieving and maintaining a citizens, even those who are in the most remote regions. high number of end-subscribers, which underpins the The commercial business case for fiber investment business case for network investment.27 will always fall short of full national coverage. That is just Competition drives down prices. If a retail ISP a fact of life for communication networks: as customers increases its price, there are dozens of others to which become more dispersed and more remote, the costs of customers can turn. Competition also ensures that reaching them become uneconomic. service standards are kept high. If a service provider Nevertheless, the Digital Agenda calls for 100 lets standards slip, there are dozens of others waiting percent coverage of the population with a minimum of to snap up their customers. If any service provider 30 Mb/s broadband by 2020. Public funding should withdraws from the market, customers have a choice of be focused on reaching those outside the range of dozens of others to take their place. economically viable private investment. In the United Kingdom, the government has pledged to provide £530 million to reach customers in the “final 72 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 97. 1.5: Fiber Broadband Figure 3: Penetration of superfast broadband homes passed, United Kingdom and Japan 15 United Kingdom Japan 12 Penetration (% homes passed) 9 6 3 0 Yr1 Q1 Yr1 Q2 Yr1 Q3 Yr1 Q4 Yr2 Q1 Yr2 Q2 Yr2 Q3 Yr2 Q4 Yr3 Q1 Yr3 Q2 Yr3 Q3 Yr3 Q4 Number of quarters since the service was launched Source: BSG, 2012. Figure 4: Superfast broadband subscriber growth, United Kingdom and Japan 8 Penetration (% all households with subscription) 7 United Kingdom Japan 6 5 4 3 2 1 0 Yr1 Q1 Yr1 Q2 Yr1 Q3 Yr1 Q4 Yr2 Q1 Yr2 Q2 Yr2 Q3 Yr2 Q4 Yr3 Q1 Yr3 Q2 Yr3 Q3 Yr3 Q4 Number of quarters since the service was launched Source: BSG, 2012. The Global Information Technology Report 2013 | 73 @ 2013 World Economic Forum
- 98. 1.5: Fiber Broadband third,”29 who fall outside the viable business case for investment. These solutions are likely to be those that private network development. BT believes that public leverage existing telecommunication assets. funding and additional private investment could bring This may mean surrendering a dogmatic attachment fiber broadband delivering 80 Mb/s to 90 percent of the to deploying a pure fiber network. However, experience United Kingdom by the end of 2017, as well as ensuring has shown that hybrid fiber/copper technologies, such that perhaps 99 percent of premises are able to access as FTTC, can provide superfast broadband speeds and broadband of more than 2 Mb/s. are continuously increasing their potential speeds, and Achieving 99 percent coverage would still leave at considerably lower costs and with less disruption than some 280,000 premises unconnected, but technologies deploying pure fiber to every end point. Surely it is better that are able to fill this gap—such as fixed copper to be able to afford superfast broadband for as close as and fiber networks or satellite and terrestrial wireless possible to 100 percent of the population than to adhere solutions—could be deployed to reach these premises. to a technical specification that inhibits investment and For example, in the remotest parts of the west of leaves more of the population unconnected. England, trials to use the 4G mobile network,30 along Second, both the infrastructure and the market for with wireless broadband in interleaved television services must be designed to encourage competition. It spectrum for delivering broadband to the very last is more efficient to build a common superfast broadband premises, are under way. infrastructure shared by many equally competing service providers than to build multiple competing CONCLUSION infrastructures. However, the common infrastructure The vision of social and economic growth through fiber provider must be regulated to prevent it from exploiting broadband infrastructure that underpins a growth in a monopolistic position, and the infrastructure must knowledge- and ICT-based jobs still holds promise. The remain open to service-level competition. As shown in Regeneris research adds detail to a growing body of this chapter, multiple competing service providers can evidence. drive down prices and maintain high service levels for Specifically, Regeneris found that, from rural areas, consumers. such as Norfolk and Suffolk, through towns and cities to Whether infrastructure providers are one or many, the capital, fiber broadband could lead to a significant standardization at the system level is vital. Retail margins annual increase in GVA and the creation of jobs through are wafer thin, so retail ISP systems for order handling, business startups and improved business performance. billing, repair, and so on need to be highly automated Telecommunication providers such as BT can point to and integrated with wholesale telecommunication economically deprived areas, such as Cornwall and provider systems. Northern Ireland, where these findings are apparent. With the large majority of population coverage As Europe and the wider developed world attempts achieved through private investment, limited public to emerge from the recent financial crisis and downturn, funds can be focused on the most remote areas that are such growth will be vital. beyond the reach of the private business case. The potential for social growth is strongly linked to economic growth: an increase in jobs and prosperity, NOTES along with a shift from waning high-carbon industries 1 See European Commission 2010a for details about the Europe 2020 vision; see European Commission 2010b for the Digital to low-carbon, knowledge-based businesses and Agenda for Europe. reductions in travel and emissions all provide a social 2 du Rausas et al. 2011. benefit as well as an economic one. Evidence of social 3 Broadband Commission 2010. growth is more anecdotal than evidence of economic growth that is more easily measured—how does 4 Ericsson 2011. one measure social growth?—but there are enough 5 Regeneris Consulting 2012. anecdotal examples to build a sound case. 6 European Commission 2010a; 2010b. The issue, then, is not whether or not fiber 7 BIS 2009. broadband can help drive social and economic 8 Broadband Commission 2011. growth, but instead how to achieve coverage as 9 Regeneris Consulting 2012. close as possible to 100 percent with minimum public 10 See http://www.btplc.com/ngb/Casestudies/Business/Printitforme. expenditure. This chapter argues for market-based pdf. strategic solutions that governments and regional 11 Charlesworth 2010. authorities are strongly urged to adopt. 12 BSG 2008. First, technical neutrality is fundamental. Governments do not have a good track record of picking 13 BSG 2008. technology winners and should let the market choose 14 Cisco 2011. solutions likely to attract the highest degree of private 74 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 99. 1.5: Fiber Broadband 15 BIS 2009. BT. 2010. BT Group plc Annual Report 2010. Available at http://www. btplc.com/Sharesandperformance/Annualreportandreview/pdf/ 16 Empirica, Work Research Centre, and the Institute of Integrated BTGroupAnnualReport2010.pdf. Study 2009. — —. 2011a. “Everything Everywhere and BT Wholesale to Deliver — 17 Cruickshank 2012. the UK’s First Live Customer Trial of 4G High Speed Broadband 18 See http://www.bradford.ac.uk/management/about-the-school/ Technology.” BT Press Release, May 25. Available at http://www. student-resources/blackboard/ . btplc.com/news/Articles/ShowArticle.cfm?ArticleID=30F2E8DB- DFEC-4D1F-90E8-77D089DCD576. 19 See http://www.sandaigprimary.co.uk/radio_sandaig/index.php. — —. 2011b. “Everything Everywhere and BT Wholesale Kick-Off 4G — 20 See BSG 2008. Live Trial.” BT Press Release, October 6. Available at http://www. btplc.com/news/Articles/ShowArticle.cfm?ArticleID=0B0E2C53- 21 BBC News 2012. C4B2-4595-8BE7-B5E41C799023. 22 See Wikipedia, “Fiber to the x” entry. Available at http:// — —. 2012. BT Annual Report and Form 20-F2012. Available at http:// — en.wikipedia.org/wiki/Fiber_to_the_x. www.btplc.com/Sharesandperformance/Annualreportandreview/ 23 The Broadband Stakeholders Group released a report that pdf/BTAnnualReport2012_smart.pdf. estimated that FTTP to the entire United Kingdom would Charlesworth, A. 2010. “Fibre Boosts Cornish Bid for Digital Business.” cost £28.8 billion. The report also looks at “whether an initial computing.co.uk, October 1. Available at http://www.computing. deployment of FTTC would inhibit a subsequent upgrade to FTTH. co.uk/ctg/news/1863412/fibre-boosts-cornish-bid-digital- From a pure cost perspective it is not clear that this would be business. a problem. About 50% of the initial FTTC investment could be re-used in an FTTH upgrade.” Analysys Mason for the BSG 2008, Cisco. 2011. “ Guldborgsund Municipality Enhances Citizen Services via p. 4. Pervasive Video.” Cisco. Available at http://www.cisco.com/en/US/ solutions/collateral/ns813/guldborgsund_cStudy.pdf. 24 Jackson 2012; see also BT 2010, p. 17; and the BT Openreach Fact Sheet, available at http://www.openreach.co.uk/orpg/home/ Cruickshank, J. 2012. Telehealth: What Can the NHS Learn from products/super-fastfibreaccess/fibretothecabinet/fttc/downloads/ Experience at the US Veterans Health Administration? GEA_FTTC_3.pdf. London: 2020health.org. Available at http://www.2020health. org/2020health/Publication-2012/publications-2012/Telehealth. 25 See European Commission 2010b. html. 26 Maes 2012. du Rausas, M. P., J. Manyika, E. Hazan, J. Bughin, M. Chui, and R. 27 Ofcom 2010. Said. 2011. Internet Matters: The Net’s Sweeping Impact on Growth, Jobs, and Prosperity, May. McKinsey Global Institute. 28 BT 2012, p. 45. Available at http://www.mckinsey.com/insights/mgi/research/ technology_and_innovation/internet_matters. 29 GOV.UK DCMS 2013. Empirica, Work Research Centre, and the Institute of Integrated Study, 30 BT 2011a, 2011b. Vienna University of Technology. 2009. ICT & Ageing: European Study on Users, Markets and Technologies. Study funded by the European Commission. Bonn: Empirica. Available at http://www. ict-ageing.eu/?page_id=1325. REFERENCES Ericsson. 2011. “New Study Quantifies the Impact of Broadband Speed Analysys Mason for BSG. 2008. The Costs of Deploying Fibre-Based on GDP.” Press Release, September 27. Available at http://www. Next-Generation Broadband Infrastructure: Final Report. Report ericsson.com/news/1550083. commissioned by the Broadband Stakeholder Group. Cambridge, UK: Analysys Mason Ltd. Available at http://www.dc10plus.net/ European Commission. 2010a. Europe 2020: A Strategy for Smart, resources/documents/http___www.broadbanduk.pdf. Sustainable and Inclusive Growth. Brussels: European Commission. Available at http://ec.europa.eu/eu2020/pdf/ BBC News. 2012. “4G Speed Put to the Test.” BBC News Technology, COMPLET%20EN%20BARROSO%20%20%20007%20-%20 October 2. Available at http://www.bbc.co.uk/news/ Europe%202020%20-%20EN%20version.pdf/. technology-19805535 — —. 2010b. Digital Agenda for Europe: A Europe 2020 Initiative. — BIS (Department for Business, Innovation & Skills). 2009. Digital Britain: Available at http://ec.europa.eu/digital-agenda/. Final Report. London: Department for Culture, Media & Sport and Department for Business, Innovation & Skills. Available at http:// GOV.UK. DCMS (Department for Culture, Media & Sport). 2013. Policy: webarchive.nationalarchives.gov.uk/+/http://www.culture.gov.uk/ Stimulating Private Sector Investment to Achieve a Transformation images/publications/digitalbritain-finalreport-jun09.pdf. in Broadband in the UK by 2015. Published February 27. Available at http://www.culture.gov.uk/what_we_do/telecommunications_ Broadband Commission. 2010. A 2010 Leadership Imperative: and_online/7763.aspx. The Future Built on Broadband. A report by the Broadband Commission. ITU and UNESCO, September. Available at http:// Jackson, M. 2012. “BT Makes its 80Mbps Superfast FTTC Broadband www.broadbandcommission.org/Reports/Report_1.pdf. Upgrade Available to ISPs.” ISPreview. Posted April 10. Available at http://www.ispreview.co.uk/index.php/2012/04/bt-makes-its- — —. 2011. Broadband: A Platform for Progress A report by the — 80mbps-superfast-fttc-broadband-upgrade-available.html. Broadband Commission. ITU and UNESCO, June. Available at http://www.broadbandcommission.org/Reports/Report_2.pdf. Maes, J. 2012. “G.fast: Shifting the Limits of Copper.” At the Speed of Ideas, January 19. Bell Labs, Alcatel-Lucent. Available at http:// BSG (Broadband Stakeholder Group). 2008. A Framework for Evaluating www.uknof.org.uk/uknof21/Maes-Gfast.pdf. the Value of Next Generation Broadband, June. London: Plum Consulting. Available at http://broadband.cti.gr/el/download/BSG_ Ofcom. 2010. “Review of the Wholesale Local Access Market: Value_of_next_generation_broadband_06_2008.pdf. Statement.” Ofcom, July 10. Available at http://stakeholders.ofcom. org.uk/consultations/wla/statement. — —. 2012. Demand for Superfast Broadband: Understanding — Demand in Europe, the US and Asia; How the UK Is Currently Regeneris Consulting. 2012. Superfast Broadband: Boosting Business Performing; and What Might Impact Take-Up in the UK in the and the UK Economy. Report commissioned by BT. London: Future. London: Broadband Stakeholder Group. Available at BT. Available at http://www.btsocialstudy.co.uk/investing_in_ http://www.broadbanduk.org/wp-content/uploads/2012/11/ broadband.html. superfastbroadband.pdf. The Global Information Technology Report 2013 | 75 @ 2013 World Economic Forum
- 100. @ 2013 World Economic Forum
- 101. CHAPTER 1.6 Mobile communication services have become an essential part of how economies work and function, and The Economic Impact the mobile telecommunication sector continues to offer unprecedented opportunities for economic growth in of Next-Generation both developing and developed markets. A series of studies have found a link between mobile Mobile Services: How 3G penetration and economic growth.1 Mobile phones have improved communication, enhanced social inclusion, Connections and the Use and expanded economic activity and productivity in of Mobile Data Impact GDP sectors such as agriculture, healthcare, education, and finance. Growth Against this backdrop, Deloitte and the GSM Association (GSMA) have performed a comprehensive CHRIS WILLIAMS and up-to-date analysis of the role that basic mobile DAVIDE STRUSANI phone services play in generating economic growth.2 DAVID VINCENT The study concludes that, in developing markets, DAVID KOVO increases in mobile penetration benefit gross domestic Deloitte LLP product (GDP) growth per capita and boost country productivity. As technology develops, mobile services have the potential of impacting a country’s economy by providing high-value 3G and 4G data services that are accessed via smartphones, tablets, and dongles that deliver mobile data services to businesses and consumers. The relationship among economic growth, 3G telephony, and mobile data use has not yet been explicitly explored; this chapter seeks to address this gap. The chapter presents the first study of (1) the impact on GDP per capita growth of consumers substituting a 3G connection for a 2G connection, and (2) the impact of increasing the usage of mobile data per 3G connection, based on data from Cisco Systems. The details of the econometric analysis conducted are reported in more detail in a 2012 report prepared by Deloitte for the GSMA.3 THE IMPACT OF 3G PENETRATION ON GDP GROWTH As mobile telephony markets become more mature, the benefits to be derived from basic mobile voice and text services on growth and productivity are achieved. Although the impact of 2G services is significant, as more developed 3G technology replaces 2G, an incremental economic impact is observed. Differential economic growth is supported because these Deloitte refers to Deloitte LLP, the UK member firm of Deloitte Touche Tohmatsu Limited (DTTL). Please see www.deloitte.co.uk/about for a detailed description of the legal structure of DTTL and its member firms. This publication contains general information only, and none of DTTL, its member firms, or their related entities (collectively, the Deloitte Network) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication. Particular thanks are owed to Gabriel Solomon (GSMA) and Robert Pepper (Cisco Systems) for their feedback on earlier drafts. The Global Information Technology Report 2013 | 77 @ 2013 World Economic Forum
- 102. 1.6: The Economic Impact of Next-Generation Mobile Services Figure 1: Potential impact of a 10 percentage point 3G penetration increase, selected countries n Average mobile penetration (2008–11) 10 percentage point increase in 3G penetration n Average 3G penetration (2008–11) 108% 91% 79% +3% GDP +0.9% GDP per capital +1.5% GDP per capital growth per capital growth growth +10% +10% +10% 5% 10% 16% Colombia Indonesia South Africa Source: Deloitte analysis. Note: The size of the circle reflects the increase in GDP per capita growth due to the 10 percentage point increase in 3G penetration. technology changes allow consumers and businesses 3G penetration while keeping all other factors equal, to benefit from high-value wireless data and content including total mobile penetration. services. This relationship had not yet been explicitly The central issue of reverse causality between quantified yet. mobile and 3G penetration and income growth, The penetration of 3G technology—measured as whereby higher levels of mobile and 3G penetration are the number of 3G connections per 100 people—has expected to affect GDP but also higher income levels increased significantly worldwide in recent years: by affect penetration, was given explicit consideration. We 2011, 3G penetration had reached over 60 percent employed the generalized method of moments estimator of the population in Western Europe and over 90 of Arellano and Bond (1991), whereby mobile penetration percent in the United States. This growth is supported and 3G penetration are instrumented using their own by the availability of devices such as phones with 3G lags. capabilities, smartphones, and tablets, all of which have A panel of 96 countries was constructed with recently proliferated. data covering 2008 through 2011.5 Years before 2008 In developed markets, where basic mobile were not included in the analysis because of the late penetration has long exceeded 100 percent, as well development of 3G networks in many countries. as in the higher-income consumer and business user The annual growth rate of real GDP per capita segments in developing markets, a substitution effect was expressed as a function of the lag of real GDP per has taken place in mobile telephony whereby mobile capita, 3G penetration, mobile penetration, and a set users who previously consumed standard services of four determinants of growth. These determinants have been acquiring 3G connections. Although this are government expenditure, trade volumes, aggregate substitution does not necessarily increase total mobile investment, and total labor force. All variables have been penetration, this section of the chapter quantifies the transformed into logarithmic form. effect on GDP growth of consumers and businesses This analysis finds that, for a given level of mobile substituting a standard 2G mobile connection with a 3G penetration and across the whole sample of countries connection. considered, those countries that had a 10 percent higher The econometric approach adopted to measure 3G penetration between 2008 and 2011 experienced an this effect follows previous work on the impact of mobile increase in their average annual GDP per capita growth penetration on GDP growth.4 Including both total mobile rate of 0.15 percentage points. penetration and 3G penetration in the econometric These results indicate that countries with a model allows us to interpret the coefficient of the proportionately higher share of 3G connections enjoy 3G penetration variable as the impact of increasing greater GDP per capita growth than countries with 78 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 103. 1.6: The Economic Impact of Next-Generation Mobile Services Figure 2: The effect of doubling mobile data usage per 3G connection 1.5 Russian Federation Increase in growth rate of GDP per capita (%) 1.2 United Kingdom Korea, Rep. 0.9 Italy Japan Germany France Brazil 0.6 Canada Mexico United States 0.3 China South Africa India 0.0 0.0 0.5 1.0 1.5 2.0 2.5 Average usage per 3G connection (GB/year) Source: Deloitte analysis. comparable total mobile penetration but lower 3G Mobile data usage per 3G connection also more penetration. than doubled, on average, every year from 2005 to 2010 For a similar absolute increase in the number of in each country in the sample, despite the considerable 3G connections, those countries with lower initial 3G increase in 3G connections. In the United States, mobile penetration experienced a higher impact on GDP per data usage per 3G connection grew, on average, by capita growth. To consider three specific countries— more than 300 percent a year between 2005 and 2010, Colombia, Indonesia, and South Africa: if each while in the Western European countries considered it country had 10 more 3G connections per 100 total grew by 170 percent over the same period. connections—that is, an increase of 10 percentage Growth in mobile data consumption, by transforming points—Colombia would have enjoyed an additional the way in which consumers and businesses operate growth rate in GDP per capita of 3 percentage points, and communicate, has had a notable impact on Indonesia would have generated an additional growth economic growth through increased productivity in GDP per capita of 1.5 percentage points, and South effects and economic activity. However, given the Africa would have enjoyed an additional 0.9 percent GDP limited availability of data, this impact has not been fully per capita growth (Figure 1). investigated before. For the first time, using detailed information provided THE IMPACT OF MOBILE DATA ON GDP GROWTH by Cisco Systems on mobile data usage between The increase in 3G connections, supported by the 2005 and 2010 in 14 countries for which historical proliferation of data-enabled devices that allow mobile disaggregated data is available,7 mobile data usage for Internet connectivity, has led to massive growth in mobile each 3G connection in a country can be calculated. data usage. The econometric approach introduced by Arellano The Cisco Systems Visual Networking Index shows and Bond (1991) made it possible to address the that, on average, total mobile data usage has more than potential endogeneity of mobile penetration and mobile doubled every year from 2005 to 2010 in each country data usage by instrumenting these variables using in the sample.6 In the United States, mobile data usage their own lags. This technique also best exploits the grew, on average, by 400 percent a year between 2005 information—such as the cross-country variation in the and 2010, while in the Western European countries sample and the variation within countries across time— considered, it grew by an average of 350 percent. In contained in the dataset. countries such as Brazil, China, and India, total usage The annual growth rate of real GDP per capita has also more than doubled, on average, every year was expressed as a function of the lag of real GDP per since mobile data was introduced. capita, mobile penetration, mobile data usage per 3G The Global Information Technology Report 2013 | 79 @ 2013 World Economic Forum
- 104. 1.6: The Economic Impact of Next-Generation Mobile Services connection, and a set of determinants of growth such NOTES as aggregate investment and labor force. Logarithms 1 Qiang and Rossotto with Kimura 2009; Waverman, Meschi, and Fuss 2005; Deloitte 2006; Andrianaivo and Kpodar 2011; Lee, of all variables were used, with the exception of mobile Levendis and Gutierrez 2009. penetration and mobile usage, to which the inverse 2 Deloitte 2012. hyperbolic sine transformation has been applied. An 3 Deloitte 2012. additional parameter has also been included within each inverse hyperbolic sine transformation to accommodate 4 See Andrianaivo and Kpodar 2011; Lee, Levendis, and Gutierrez 2009. more general forms of nonlinearity. 5 See Deloitte 2012. These are the 96 countries for which 3G This analysis finds a positive relationship between penetration data were available from 2008. the volume of mobile data used by each 3G connection 6 See Cisco VNI Mobile Highlights at http://www.cisco.com/web/ and increases in economic growth. On average, across solutions/sp/vni/vni_mobile_forecast_highlights/index.html; Cisco the sample of 14 countries considered, if countries Systems has provided disaggregate historic data on mobile data usage for the purposes of this study. doubled their consumption of mobile data per 3G 7 The 14 countries for which data were available are Brazil, Canada, connection between 2005 and 2010, they would have China, France, Germany, India, Italy, Japan, the Republic of Korea, experienced a growth rate of GDP 0.5 percentage points Mexico, Russia, South Africa, the United Kingdom, and the United each year. States. The results indicate that mobile data usage per 3G 8 For example, Shapiro and Hassett 2012. connection has a positive effect on the growth rate of GDP per capita. This effect grows linearly with the initial level of data usage per 3G connection in the country: REFERENCES countries with a higher average level of mobile data Andrianaivo, M. and K. Kpodar. 2011. “ICT, Financial Inclusion, and Growth: Evidence from African Countries.” IMF Working Papers. consumption per 3G connection experience a larger Washington, DC: IMF. impact on GDP per capita growth from increasing this Arellano, M. and S. Bond. 1991. “Some Tests of Specification for Panel consumption (Figure 2). Data: Monte Carlo Evidence and an Application to Employment Countries such as Russia, the United Kingdom, Equations.” Review of Economic Studies 58 (2): 277–97. and the Republic of Korea—which are characterized Cisco. VNI Mobile Forecast Highlights, 2012–2017. Available at http:// www.cisco.com/web/solutions/sp/vni/vni_mobile_forecast_ by a higher level of data usage per 3G connection— highlights/index.html. experience an increase in GDP per capita growth of Deloitte. 2006. Global Mobile Tax Review 2006–2007. Report prepared up to 1.4 percentage points. The effect is more limited for the GSM Association. Available at http://www.gsma.com/ for countries that are still developing mobile data newsroom/wp-content/uploads/2012/03/taxreport1.pdf. usage, such as China, India, Mexico, and South Africa, — —. 2012. What Is the Impact of Mobile Telephony on Economic — supporting scope for further growth. Growth? Report prepared for the GSM Association. Available at http://www.gsma.com/publicpolicy/wp-content/uploads/2012/11/ gsma-deloitte-impact-mobile-telephony-economic-growth.pdf. CONCLUSION Lee, S. H., J. Levendis, and L. Gutierrez. 2009. “Telecommunications This work has shown that, as more-developed 3G and Economic Growth: An Empirical Analysis of Sub-Saharan Africa.” Serie Documentos de Trabajo no. 64. Available from SSRN technology substitutes for 2G technology, there is a at http://ssrn.com/abstract=1567703. strong incremental impact on economic growth. Qiang, C. Z.-W. and C. M. Rossotto (with K. Kimura). 2009. “Economic Although the study represents the first attempt to Impacts of Broadband.” In Information and Communications quantify the impact of advanced mobile telephony on for Development: Extending Reach and Increasing Impact. Washington, DC: World Bank. 35–50. GDP per capita growth, related studies consistently suggest that the adoption and use of successive new Shapiro, R. J. and K. A. Hassett. 2012. “The Employment Effects of Advances in Internet and Wireless Technology: Evaluating generations of mobile devices (i.e., consumers switching the Transitions from 2G to 3G and from 3G to 4G.” Report. from 2G to 3G technologies and from 3G to 4G) have Washington, DC: New Policy Institute and NDN. Available at http:// www.sonecon.com/docs/studies/Wireless_Technology_and_Jobs- generated positive impacts also on employment growth.8 Shapiro_Hassett-January_2012.pdf. This economic growth is enhanced by the usage of Waverman, L., M. Meschi, and M. Fuss, 2005. “The Impact of Telecoms mobile data services, which has boomed in developed on Economic Growth in Developing Markets.” The Vodafone markets in recent years and has a positive effect on an Policy Paper Series (2): 10–23. Available at http://www.vodafone. com/content/dam/vodafone/about/public_policy/policy_papers/ economy’s GDP per capita growth. public_policy_series_2.pdf. To achieve the benefits highlighted in this chapter, governments must focus on increasing 3G and potentially 4G penetration in markets where mobile data services are still developing by encouraging the substitution of basic mobile services with more advanced connections and by supporting a fast increase of mobile data consumption. 80 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 105. CHAPTER 1.7 Understanding the challenges to the adoption and effective use of information and communication Better Measurements technologies (ICTs) in health systems, along with their broader economic impacts, is critical to achieving their for Realizing the Full widespread penetration and to realizing the potential benefits to be had from their application. Today, ICT Potential of Health sophistication and the range of possible uses in the health sector are enormous. There is strong evidence Information Technologies that ICT implementation, when done effectively, can result in healthcare that is higher quality, safer, and more ELETTRA RONCHI, Organisation for Economic responsive to patients’ needs as well as more efficient Co-operation and Development (appropriate, available, and less wasteful). Advocates JULIA ADLER-MILSTEIN, University of Michigan point to the potential reduction in medication errors in GENNA R. COHEN, University of Michigan particular as a critical advantage. There is also growing LAURA P. WINN, Harvard School of Public Health evidence that health ICTs are essential to support the ASHISH K. JHA , Harvard School of Public Health development of new, innovative models of care delivery.1 In addition to these health-related objectives, most governments in the Organisation for Ecoomic Co-operation and Development (OECD) countries recognize that health ICTs represent new and significant opportunities for economic growth. The global market for health ICT products and services is estimated at US$96 billion and growing.2 In Europe, this sector includes a number of large European-based companies as well as an estimated 5,000 small- and medium-sized enterprises (SMEs) operating in various subsectors of e-health. E-health is considered one of the six most promising lead markets of the European Union.3 Greater adoption of health ICTs is, therefore, projected to increase the demand for developers and skilled workers to implement, support, and use these technologies. Despite their tremendous promise, incorporating ICTs into daily use in healthcare has proven difficult. More than two decades of effort across OECD countries provides a picture of significant public investments, notable successes, and also highly publicized delays and failures.4 This outcome highlights the large gap between what is possible and where we are now, with little known about how to fully leverage ICTs to improve the health and wellness of the population. Data on successful adoption and use across countries are therefore an essential learning tool for policy development in this area.5 This chapter briefly reviews OECD countries’ efforts to implement ICTs in healthcare systems and includes current perspectives on the state of implementation and benefits that can be realized. It then highlights areas where countries are finding it useful to share information and develop actionable indicators to monitor The OECD benchmarking initiative described in this chapter is co-financed by a grant provided by the Commonwealth Fund, which the authors grate- fully acknowledge. The views presented here are those of the authors and not necessarily those of OECD Member countries, the Commonwealth Fund, or its directors, officers, or staff. The Global Innovation Technology Report 2013 | 81 @ 2013 World Economic Forum
- 106. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies progress through international comparisons. The chapter and the home has also gained greater prominence as concludes with a discussion on the process the OECD the prevalence of chronic diseases (and often multiple is now following to develop new measures to facilitate chronic diseases) increases with aging populations. international comparisons in the context of their markedly Recent evidence suggests that ICTs can play a critical different healthcare systems. role in achieving this set of goals. To reap the potential gains of ICTs, however, requires careful planning, A GROWING IMPERATIVE: DOING MORE significant upfront investments, and collaboration across WITH LESS a wide range of stakeholders. Thus many countries face Policymakers in OECD countries are faced with ever- a dilemma: short-term and long-term policy priorities increasing demands to make health systems more may point in different directions. Without solid evidence responsive to the patients they serve, to improve the on which to base decisions, spending on ICTs for health quality of care, and to address disparities in health has become a matter of opinion and often a political and in access to care. There is broad consensus that gamble. Policymakers therefore seek a clearer view of today’s healthcare systems are not able to deliver the the “theory of the case”—that is, better evidence on high-quality care that patients and providers want at why they should support widespread use of ICTs in a cost that countries can afford. Therefore, there is an healthcare and how best to do this. urgent need to improve care and increase efficiency simultaneously. WHAT ICTs CAN (AND CANNOT) DO FOR Health is one of the largest areas of public HEALTHCARE SYSTEMS expenditure in OECD countries, and forecasts show A more comprehensive use of ICTs can benefit health spending continuing to climb for the foreseeable healthcare systems in numerous ways. This section future.6 From 1990 through 2010, an increasing share of examines how expanded and better use of ICTs can the gross domestic product (GDP) of OECD countries contribute to job creation; help reduce healthcare has been devoted to the provision of healthcare. On spending; improve the safety of healthcare; and make average, total healthcare spending represented about shared, intelligible data a foundation for healthcare 9.5 percent of GDP by 2010 (Figure 1)—up from just delivery innovation. over 5 percent in 1970 and around 7 percent in 1990. In Japan, the share of spending allocated to health has Promote new sources of growth and job creation increased substantially in recent years, to 9.5 percent (up The health and social sectors employ a large and from 7.6 percent in 2000), and is now equal to the OECD growing number of people in OECD countries and are average. While the rate of increase in health spending projected to be one of the largest sources of job growth has slowed in the period 2003–08, health expenditure in the coming years. Employment in these sectors grew growth has still exceeded economic growth in almost all by 2.8 percent per year in nearly all OECD countries OECD countries in the past 15 years. between 1995 and 2009—twice as fast as the total Factors exerting upward pressure on health civilian employment growth rate of 1.3 percent (Figure 2). spending—such as demographic change, chronic Across OECD countries, the recent economic crisis diseases, and new technological advancements—will has impacted the health and social sectors much less continue to drive health spending higher. According to than other parts of the economy. Employment in these OECD projections, public health spending could increase sectors continued to increase in 2008 and 2009, at a by between 50 percent and 90 percent by 2050. The time when total civilian employment remained flat or message is simple yet urgent: the sustainability and even declined as economies entered into recession. In affordability of health systems is a challenge that must Ireland, for instance, employment in the health and social be addressed. sectors grew by 3 percent from 2008 to 2009, while total Governments have a wide range of policy tools employment fell by 8 percent.8 available to control the escalation of costs. “Command- This trend is expected to continue and will probably and-control” policies can hold expenditures down accelerate in the next few years. The increased demand in the short term, but they often have unintended for workers in this area will stem largely from an aging consequences in the long term. In addition, such policies population that requires care at home, at nursing care do little or nothing to moderate the underlying pressures facilities, and in inpatient and outpatient settings. that will continue to push health spending up.7 The field of health information technology (IT) is There are other promising avenues for controlling set to contribute to this growth in several ways. First, health spending in the longer term. For example, greater adoption will stimulate demand for jobs that improving the quality of healthcare, increasing patient directly support the development of the new platforms safety, and coordinating care across healthcare settings and applications, their implementation, and their can all assist in controlling costs. Shifting care out of upkeep. It will also change the way physicians and expensive, acute care settings and into the community nurses work, potentially creating new jobs for healthcare 82 | The Global Innovation Technology Report 2013 @ 2013 World Economic Forum
- 107. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Figure 1: Health expenditure as a share of GDP, OECD countries (2010) 20 n Private 15 n Residual n Public Percent GDP 10 5 0 United Kingdom Chile United States Portugal Netherlands1 France Germany Spain (2009) Sweden OECD Japan (2009) Norway Italy Iceland Ireland Australia (2009) Finland Slovenia Slovak Republic Canada Switzerland Denmark Austria Belgium2 Greece New Zealand Luxembourg (2009) Israel (2009) 3 Hungary Czech Republic Korea Poland Estonia Mexico Turkey (2008) Source: OECD, 2012. Notes: Data are for 2010 for all countries except Spain, Japan, Australia, Luxembourg, and Israel, which are for 2009. 1. In the Netherlands, it is not possible to distinguish clearly the public and private share for the part of health expenditures related to investments. 2. Total expenditure excluding investments. 3. Information on data for Israel is available at http://dx.doi.org/10.1787/888932315602/. Figure 2. Employment growth rate in the health and social sectors compared with all sectors in the economy, 1995–2009 or nearest year 9 Health and social Average annual growth rate (%) 6 n n Total civilian 3 0 –3 Korea Ireland Japan* United Kingdom Luxembourg Spain Mexico New Zealand Australia Belgium Greece Portugal Netherlands OECD Switzerland Turkey* Norway Austria Canada Germany Italy United States* Finland Iceland France Denmark Czech Republic Sweden* Hungary Poland* Slovak Republic Source: OECD Health at a Glance, 2011. * Data are the average of 1995–2009 or nearest year, with the following exceptions: Japan (2003–09), Turkey (2000–09), the United States (2003–08), Sweden (2003–08), and Poland (2000–07). The Global Innovation Technology Report 2013 | 83 @ 2013 World Economic Forum
- 108. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Figure 3: Online health IT job postings per month in the United States, 2007–12 15,000 n Health IT clinical user jobs n Health IT implementation and support jobs 14,512 Number of health IT job postings per month 12,000 February 2009 HITECH Act 9,000 6,000 4,850 3,000 0 May 10 May 11 May 07 May 08 May 09 Mar 10 Mar 11 Mar 07 Mar 08 Mar 09 Sep 10 Nov 10 Sep 07 Sep 08 Nov 08 Sep 09 Nov 09 Sep 11 Nov 11 Nov 07 Jan 09 Jan 10 Jan 11 Jan 12 Jan 07 Jan 08 Jul 10 Jul 07 Jul 08 Jul 09 Jul 11 Source: Furukawa et al., 2012. Note: Data are based on the three-month moving average. personnel who can use newly available data to identify to a reduced utilization of unnecessary healthcare opportunities to improve performance. The movement services. More effective information sharing, such as the toward accountable care and larger, integrated delivery rapid electronic delivery of hospital discharge reports systems—a movement facilitated by a greater use of to general practitioners and the use of computerized ICTs—is spurring investment in data, analytics, and care provider order entry (CPOE) systems, can reduce the use management platforms in many OECD countries. of redundant laboratory and radiology tests—sometimes In the United States, the Healthcare Information by as much as 24 percent.13 Clinical decision support Technology for Economic and Clinical Health Act features can influence prescribing behavior and can (HITECH) provisions of the 2009 American Recovery and save money by informing physicians of the comparative Reinvestment Act (ARRA)—which promoted “meaningful effectiveness of alternative medical treatments. The use” criteria and increased investments in health ICTs— use of picture archiving and communications systems have set the conditions for employment growth in this (PACS) to acquire, store, retrieve, present, and distribute sector.9 The number of online health IT job postings per digital medical images can lead to a lower total number month in the United States has increased by 199 percent of x-rays, improved turnaround time, and some cost since the passage of HITECH, growing from 4,850 in savings. In British Columbia, where PACS have been February 2009 to 14,512 health IT jobs in February 2012 widely adopted, 87 percent of radiologists reported (Figure 3). A study of actual employment found that more improvements in their reporting and consultation than 50,000 health IT jobs have been created between efficiency, and 93.6 percent indicated it had reduced 2007 and 2011.10 According to the US Bureau of Labor the time spent locating radiological examinations for Statistics, employment of medical records and health reviews.14 information technicians is expected to increase by 21 Other positive effects are expected to derive percent from 2010 to 2020, faster than the average for all from greater efficiency in administrative processes, other occupations.11 such as billing. A 2010 OECD report highlights the substantial administrative cost savings that can be Efficiency gains and cost reduction found by introducing electronic claims processing In addition to its impact on economic growth, the through the New England Healthcare Electronic Data introduction of ICTs could improve the value created in Interchange Network (NEHEN). Claims that cost US$5.00 the health sector.12 Specifically, ICT use is expected to to submit in labor costs per paper transaction were lead to efficiency gains and cost reduction. The most processed electronically at 15 cents per transaction after frequently cited positive effects are generally attributed the introduction of NEHEN. In the Republic of Korea, all 84 | The Global Innovation Technology Report 2013 @ 2013 World Economic Forum
- 109. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Figure 4: Telehealth sessions in Canada, 2010 Improved healthcare delivery Electronic health records (EHRs) can improve the quality and responsiveness of care by enabling timely access and better transmission of patient medical information across the healthcare continuum. The effective use of EHRs can also facilitate the evaluation of healthcare interventions and their quality at the practice level, clinical research and effective public health planning, and can be used to provide the information needed for incentive programs, such as pay-for-performance programs. The potential of ICT applications to improve healthcare delivery extends, however, well beyond EHRs. Telehealth, for example, is increasingly viewed as an important tool for optimizing continuity in care and improving access to health services, particularly in rural and remote areas where healthcare resources and expertise are often scarce or even nonexistent. The introduction of telehealth in Canada has enabled assessments of patients in rural areas closer to home. n Clinical Educational A recent study commissioned by Canada Health n Administrative Infoway showed that, as of the end of the 2009–10 fiscal year, Canada had 5,710 telehealth systems in place in at least 1,175 communities.17 Many of these systems Source: Based on Canada Health Infoway et al., 2011. serviced the 21 percent of the Canadian population who live in rural or remote areas. There were nearly 260,000 instances of telehealth use in Canada in 2010, of which hospital bill requests are completed through an over 70 percent were for clinical consultations (Figure 4). electronic data interchange system implemented in Mobile health applications increasingly provide 2003.15 Each year, the Health Insurance Review and unique and unprecedented opportunities for empowering Assessment Service (HIRA) manages a flow of nearly patients and for meeting the growing needs of aging 1.2 billion cases of hospital bill requests. In 2010, the populations. Advocates of patient-centered healthcare number of claims was 1.3 billion. All the data are have long argued that individuals should be able to transferred and stored in HIRA’s medical information take responsibility for their own health. The argument system, which boasts the world’s largest capacity today applies widely to the management of chronic and can store up to 210 terabytes of information. With diseases such as diabetes and obesity, where health 1,751 staff assigned to the review process, HIRA is able systems increasingly see their roles mainly as agents to process over 40 percent of these bills electronically. of support. To the extent that individuals are the best HIRA is planning to increase electronic review in the judges of their own welfare, the chances of the success next four years to 65 percent in order to maximize of any care or prevention program will depend on efficiency and simplify the process. patient engagement and meaningful co-ownership The 2007 Commonwealth Fund report, Bending and co-production of healthy behaviors. Health ICTs to the Curve,16 put the potential of aggregate system- support self-management (such as personally controlled wide savings of promoting health IT in the United health records, mobile health applications, and social States at US$88 billion over 10 years. The authors networks) have an important (and growing) role to play estimated that the cost reductions would result from in addressing the “information asymmetry” between a lower rate of medical errors, more efficient use of healthcare providers and consumers/patients, thus diagnostic testing, more effective drug utilization, and allowing individuals to participate more actively in making decreased provider costs, among other improvements. better-informed decisions about their own healthcare. Additional savings would likely flow from better care coordination among multiple providers—and improved Reduced medical errors and improved patient safety chronic care management—that would lead to both Under the right conditions, health ICTs can reduce a decrease in provider time utilization and better medical errors.18 Medication errors, in particular, health outcomes. account for a significant number of additional hospital admissions and consultations in primary care. Three types of medical errors are common: errors caused by forgetfulness or inattention on the part of both doctor The Global Innovation Technology Report 2013 | 85 @ 2013 World Economic Forum
- 110. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Box 1: Impact of Computerized Physician Order Box 2: Chronic disease management toolkit in Entry (CPOE) on medication error prevention British Columbia, Canada The Brigham and Women’s Hospital, an academic tertiary- In 2002, the Health Department of British Columbia care hospital with approximately 700 beds in Boston, identified problems with the management of chronic conducted a study in 1999 of the impact of CPOE on diseases. A study of 20,000 patients with diabetes between medication errors. All patients admitted to three medical 1996 and 2001 showed that no more than 50 percent units were studied for seven- to ten-week periods in four of diabetes patients received all of the series of services different years. The baseline period of the first year was and tests recommended in clinical practice guidelines before implementation of CPOE, and the remaining three (for example, having their blood sugar monitored through periods occurred after the implementation of increasingly HbA1c), no matter how many times they saw their doctor. sophisticated CPOE. The study found that: British Columbia developed a chronic disease management (CDM) toolkit, a web-based information • Non-missed-dose medication error rate fell 81 percent, system for diabetes and congestive heart failure. CDM from 142 per 1,000 patient days in the baseline period incorporates clinical practice guidelines into flow sheets to 26.6 per 1,000 patient days in the final period. and includes other features that allow health professionals • Non-intercepted serious medication errors (those with to monitor care for chronic disease. Between 2002 and the potential to cause injury) fell 86 percent from the 2005—that is, within the first three years of implementation baseline to period 3, the final period. of the CDM toolkit—the proportion of people with diabetes who were receiving care that complied with the Canadian • Large differences were seen for all main types of Diabetes Association guidelines had more than doubled, medication errors: dose errors, frequency errors, route while the annual cost of diabetes care dropped over the errors, substitution errors, and allergies. same period from an average of CAD 4,400 (Canadian dollars) to CAD 3,966 per patient. Source: 1 Bates et al. 1999. Sources: Krueger 2006; OECD 2010a. and patient, errors of judgment or planning (rule-based is essential to improve clinical outcomes and also to errors), and errors resulting from a lack of knowledge. prevent unnecessary duplications. EHRs can greatly These errors can lead to adverse drug reactions, which facilitate this task. is one of the leading causes of death in the United ICTs can also play an important role in increasing States (it is estimated to be between the 4th and the 6th compliance with clinical care guidelines or protocol- highest cause).19 ICTs can prevent medication errors by based care, which is particularly valuable in the making it easier for healthcare professionals to acquire management of chronic diseases such as asthma, and share information. With electronic drug prescriptions diabetes, and heart failure. These are conditions with a (e-prescribing), an expert system can be integrated to broad evidence base for how best to manage patients; check for adverse drug reactions (ADRs). Such a system ICTs can help ensure that providers adhere to this flags possible ADRs for patients taking multiple drugs. evidence. A study conducted by the Rand Corporation It also generally contains patient-specific information on in 1998–2000 in the United States showed that patients the history of reactions—such as allergies to penicillin received only 54.9 percent of recommended care out or sulfa drugs—and provides a warning if these drugs of a set of 439 quality indicators defined for 30 acute are being prescribed. Studies have shown that ICT and chronic conditions. Quality-care indicators were systems (including e-prescribing) reduce medication based on recommendations pertaining to screening, errors and decrease adverse drug reactions.20 The diagnosis, treatment, and follow-up for each condition. Cochrane Review has shown that electronic prescribing Although more than 75 percent of the recommended improves quality (Box 1), but is equivocal on its care was provided for senile cataracts or breast cancer, cost-effectiveness.21 recommendations for care did not exceed 50 percent for 10 conditions. Only 22.8 percent of recommended care Improved management of chronic diseases was provided for hip fractures and only 10.5 percent The use of ICTs to improve the management of chronic for alcohol dependency. In many but not all cases, diseases has also gained significant attention. First, nonadherence with recommended care corresponded to ICTs can improve care coordination.22 The treatment of an underuse of healthcare services.23 complex chronic diseases requires input across many Other studies have produced similar evidence different healthcare professions and multiple healthcare of nonadherence to recommended care in medical settings, thereby creating a complex set of data that the practice. ICT systems are important for increasing the various people in the care process need to understand uptake of preventive services such as screening tests for and use. Sharing patient information across providers diabetes and cancer (Box 2). 86 | The Global Innovation Technology Report 2013 @ 2013 World Economic Forum
- 111. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Figure 5: Use of electronic medical records by physicians in seven OECD countries, 2006 and 2009 100 80 n 2006 n 2009 60 Percent 40 20 0 Netherlands New Zealand United Kingdom Australia Germany United States Canada Source: Schoen et al., 2009. Notes: Survey question for 2006: “Do you currently use electronic patient medical records in your practice?” Survey question for 2009: “Do you use electronic patient medical records in your practice (not including billing systems)?” UNEVEN ICT ADOPTION ACROSS OECD particularly when they can benefit more directly from COUNTRIES investing in biomedical technologies that will increase Making sure that ICTs are in place is only the first step their own revenue. on a long and challenging journey toward taking full This challenge can be addressed by designing advantage of these technologies. Indeed, it is fair to payment systems that encourage the uptake of ICTs. say that, although the potential gains from greater ICT This has been a central aspect of many recent programs use have been apparent for years, most countries still to encourage the use of ICTs—examples include the face major implementation challenges and adoption has Practice Incentive Programme (PIP) in Australia and the remained remarkably uneven. Quality Outcomes Framework (QOF) for primary care In 2009, the Commonwealth Fund reported that in the United Kingdom. It is important to note that the only 46 percent of US doctors used electronic medical investments in ICTs are often part of a wider strategy records, compared with over 90 percent of doctors in to improve primary care and hospital performance and Australia and the United Kingdom (Figure 5).24 According are linked with broader incentive regimes that pay for to a recent survey of European Union countries,25 on better performance, as well as reforms—such as disease average, only 6 percent of general practitioners reported management programs to improve chronic care. Often using e-prescribing, the exceptions being Denmark (97 pay-for-performance schemes begin with paying for percent), Sweden (81 percent), and the Netherlands (71 reporting that, in turn, provides financial incentives for percent). ICT adoption and providing data on the quality of care in regular electronic form. Pay-for-reporting programs are ACCELERATING ADOPTION AND THE often a necessary prelude to a more full-scale pay-for- DEVELOPMENT OF BENEFITS FROM ICTs: performance scheme.27 OVERCOMING THE CHALLENGES A second barrier to ICT adoption and effective Effective system-wide adoption of ICTs and the use is the broader issue of governance or stewardship. exchange of medical information continues to be Too often, projects start without the systems that are logistically difficult for a variety of reasons. First, the needed to make progress—for instance, objectives need way healthcare is financed and organized can create to be set in terms of the health gains expected, and disincentives for providers (physicians, hospitals, others) appropriate workflow redesign, change management, to pursue ICTs.26 In particular, fee-for-service payment education, and training need to be introduced.28 This schemes do not create incentives to improve quality and lack of governance is also reflected in the absence reduce redundant utilization—two of the primary benefits of commonly defined and consistently implemented of health ICTs. Providers therefore have little motivation interoperability standards. Although healthcare to go through a costly and disruptive implementation, organizations have access to an ever-increasing number The Global Innovation Technology Report 2013 | 87 @ 2013 World Economic Forum
- 112. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Table 1: Overview of main data collections reported by countries Data collections Relevance Feasibility Prevalence Comparability National statistics surveys of ICT use Low Low Low High Use of administrative data Medium High Low Low Surveys of the population Medium Low Low Low Standalone surveys of healthcare providers (businesses or personnel) High Medium High Low Source: OECD, 2010a. of ICT products, their systems often cannot speak to The scope of the surveys and the methodologies each other, thus preventing the potential gains from used varied significantly and included sample surveys of sharing information. Linkages and health information medical practitioners and medical practices, inventories exchange remain a serious problem. This market failure of the use of ICTs for administrative/clinical purposes is widely recognized and governments are taking varying in hospitals, self-administered surveys, censuses or approaches to address it. large samples of service providers in public and private A third challenge relates to decisions on how sectors, and population surveys. healthcare organizations handle their digital information Table 1 presents a simplified comparative analysis of environment. This process profoundly affects the the different data sources in terms of (1) relevance—that uptake of health ICTs and the transition to an e-health is, how well the data reflected the information priorities environment. The main challenge is integrating privacy of policymakers; (2) feasibility—that is, how easily data policy, security, and technological requirements for can be gathered (cost and time to collect the data); (3) access and the exchange of healthcare information. prevalence—that is, whether the type of data collection This is an area where public perception issues must be is frequently used or not; and (4) the extent of data addressed. Keeping control over personal electronic comparability medical information and privacy assurance remain the The OECD study also reviewed how countries two top concerns for consumers. In particular, there is define ICTs in their surveys. With the exception of the concern that information could have detrimental effects terms electronic health record (EHR) and electronic on employment, be used by health insurance companies medical record, there was very little or no overlap in the to deny coverage or increase premiums, and harm social lists provided by countries. Notably, none included any integration in the community. general definition for either ICTs or healthcare. Even for Appropriate privacy protection should be incorporated the term EHR, the definitions used in questionnaires into the design of new ICT systems and policies from the varied widely across countries (and often across surveys outset. However, such protection must be balanced with within the same country). the value from broad information sharing. The variety in the way countries defined and measured ICTs inevitably made it difficult to compare BETTER MEASUREMENTS TO REALIZE THE FULL data within and across countries, or to link survey data POTENTIAL OF HEALTH ICTs to other data sources. It was similarly challenging for The challenges to achieving widespread ICT adoption countries to compare practices and policies from which and meaningfully leveraging these tools to improve they could learn. care are complex. Many countries are looking to learn Prompted by the 2008 study, OECD countries from others’ successes and failures to inform their own agreed to undertake the following actions: policy development. This, however, requires a shared • establish a measurement framework for ICTs in understanding of ICT definitions as well as approach to health systems, measuring adoption and impact. In 2008, the OECD undertook a study of how • establish internationally agreed definitions of ICTs, member countries were monitoring progress in ICT and implementation under their respective national e-health • develop a model survey for the measurement of the strategies. The study showed a rising interest in availability and use of ICTs in the health sector. monitoring ICT adoption that had led to a proliferation of surveys of varying quality and utility. These surveys were sometimes conducted by official government statistical The establishment of an international measurement agencies, and more often by academic entities and framework private-sector collection agencies funded by government Metrics and indicators have to be relevant to health departments.29 Most surveys were conducted as policymakers. In the early 1990s, the OECD developed standalone surveys, on an ad hoc basis. In most cases, a conceptual framework for the diffusion of ICTs. This they focused on ICT adoption in the primary care sector. framework recognizes that measuring ICTs is a moving 88 | The Global Innovation Technology Report 2013 @ 2013 World Economic Forum
- 113. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies Figure 6: The diffusion curve of ICTs Level of activity Time Source: Adapted from Figure 1.2 in OECD, 2011b. target. Countries follow an S-shaped curve that begins international comparability of surveys that measure the with increasing interest in availability and access (Figure 6). use of ICTs in households, businesses, and government Once ICTs reach a critical stage of diffusion, policy interest indicated that developing and implementing a model shifts to the purpose and level of ICT use (intensity) and to survey composed of separate, self-contained modules its impact (and less on its access).30 There is likely to be can ensure flexibility and adaptability to a rapidly some demand for all three types of indicator, but priorities changing environment.32 will differ over time for different countries. The use of core modules (either as an add-on to Measures need, therefore, to reflect this continuum, existing country surveys or as a standalone survey) starting from ICT availability and adoption, moving next allows measurement on an internationally comparable toward effective use and the extent of health information basis. Additional modules and new indicators can be exchange, and ending with measuring outcomes and added to respond to evolving or country-specific policy impact on health and the performance of the health needs in this area. system. The framework underlying the elaboration of the model survey includes three main features that are of The establishment of internationally agreed general applicability. These features are reviewed below. definitions of ICTs 1. Linking indicators to user needs: The model To avoid confusion over concepts and definitions, the survey reflects common elements of national ICT OECD began by proposing to define ICTs with reference use that, in turn, are guided by national policy to the functions they offer. This approach was first priorities. tested in the United States in a 2008 national survey of physicians.31 An expert panel defined the key functions 2. Flexibility and adaptability: The model survey that constitute a “basic” and “fully functional” EHR, is a flexible tool composed of separate, self- and then applied these definitions to the survey data to contained modules to ensure flexibility and develop nationally comparable estimates. adaptability to a rapidly changing environment. Although the use of core modules allows Development of a model survey measurement on an internationally comparable One of the key challenges in developing international basis, additional modules and new indicators measures is finding an approach that can be applied to within existing modules can be added to respond all countries while taking into account the difference in to evolving or country-specific policy needs in this their pace of ICT deployment. Previous work to improve area. The Global Innovation Technology Report 2013 | 89 @ 2013 World Economic Forum
- 114. 1.7: Better Measurements for Realizing the Full Potential of Health Information Technologies 3. Minimized burden: The model survey is CONCLUSIONS designed to reduce respondent burden and This review has summarized evidence suggesting enhance international comparability by being that the widespread adoption and use of health short, by making use of filter questions, and using ICTs can enable an array of benefits. Among these a very limited number of quantitative questions. are reducing medical errors, improving clinical care through adherence to evidence-based guidelines, and MOVING FORWARD: THE OECD BENCHMARKING preventing duplication and inefficiency for complex care INITIATIVE pathways. These technologies hold substantial value Given the rapid pace of developments, a narrow window for the management of chronic diseases by enabling of opportunity currently exists for countries to achieve better coordination of care as well as greater patient international agreement on indicators and terminology. involvement in their care. Recent work undertaken by the OECD in collaboration Smooth, evidence-based implementation of health with Harvard School of Public Health, the World Health ICTs is, however, still a distant prospect. There is much Organization, and the European Commission indicates work still to be done to gather relevant information that a nucleus of a few indicators may represent a for improving the quality of existing measurements reasonable starting point for the development of a as well as improving the linkages between policy and common understanding about what should be included measurement. in the core module of a model survey on the adoption Understanding the barriers and incentives to ICT use and use of ICTs in the health sector. These indicators is critical to achieving more widespread penetration and are being organized into four broadly defined domains in realizing the far-reaching economic and social benefits which the measurement of availability and use represent to be reaped from their application. OECD countries today’s policy priorities for OECD countries: have much to gain by joining their efforts and sharing the burden of developing measurements and testing 1. Provider-centric electronic records systems: indicators in this sector. Risk, delay, and cost can be These systems are used by healthcare minimized by learning from good international practices, professionals to store and manage patient health but this will be possible only if we have a common set information and data, and include functionalities of indicators that are collected on a comparable basis. that support the care delivery process. Examples The OECD work to develop internationally comparable include electronic medical records, EHRs, and measures about ICT use in healthcare and the wide- electronic patient records. based support it has received is a reflection of the critical 2. Patient-centric electronic records systems: need for such data today in both OECD and non-OECD These systems are typically used by patients countries. and their families to access and manage their health information and organize their healthcare. NOTES Examples are personal health records, patient 1 OECD 2010a, 2010b. portals, and other patient-centric electronic 2 Boston Consulting Group 2008. records. 3 Lead markets are defined by the European Commission as markets with high growth potential in which EU industry can 3. Health information exchange: This area entails develop a global competitive advantage if it gets support from the the process of electronically transferring (or public sector; http://www.euractiv.com/innovation-enterprise/lead- markets-gateway-growth-linksdossier-188437. See Commission of aggregating and enabling access to) patient the European Communities 2007. health information and data across provider 4 OECD 2010a. organizations. Examples include the e-transfer of 5 OECD 2010a. patient data between ambulatory care providers 6 OECD 2012. or the transmission of prescriptions from the provider to a pharmacy. 7 OECD 2010a. 8 OECD 2011a. 4. Telehealth: This program encompasses the 9 Executive Office of the President, Council of Economic Advisers broad set of technologies that support care 2009. between patients and providers, or among 10 Furukawa 2012. providers, who are not co-located. Examples 11 US Bureau of Labor Statistics 2012. include video-mediated consultations between physicians and patients, remote home monitoring 12 OECD 2010b. of patients, and teleradiology. 13 Chaudry et al. 2006. 14 OECD 2010. 15 HIRA 2010. 90 | The Global Innovation Technology Report 2013 @ 2013 World Economic Forum
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- 117. CHAPTER 1.8 The liberalization of telecommunication markets that started in Europe in the 1990s allowed competitors into Re-Establishing the Europe’s markets and brought European consumers better service, lower prices, and a wealth of innovative European Union’s services. It also enabled economic growth and established Europe as one of the world’s leaders in Competitiveness with the the production of telecommunication equipment and services. Liberalization unlocked a wave of investment Next Wave of Investment in that served to increase the capacity of fixed and Telecommunications mobile networks. This modernization added digital communications capabilities to the existing copper network infrastructure, but did not replace the “last mile SCOTT BEARDSLEY to the home.” LUIS ENRIQUEZ Today, telecommunication networks worldwide face WIM TORFS growing pressure to increase their capacity, driven by FERRY GRIJPINK an explosion in consumer demand for newly available STAGG NEWMAN Internet services such as online or over-the-top video. SERGIO SANDOVAL To meet this demand, telecommunication players in MALIN STRANDELL-JANSSON the United States and Asia have already made massive McKinsey & Company investments to upgrade network technologies, focusing particularly on replacing the last mile of copper with fiber networks, which are much better for carrying big data. This has not happened in Europe, where the last mile still needs to be upgraded. At the same time, revenue and profitability growth in the European industry are falling. Europe’s telecommunication industry now lags the rest of the developed world in many measures, and the region may soon fall behind the many developing countries that are rapidly leapfrogging older technologies. Low investment in telecommunications puts at risk not only future consumer benefits but also the region’s overall competitiveness. This chapter suggests that restoring both benefits and competitiveness will depend primarily on revising the European Union (EU) regulatory framework to allow revenues, profits, and thus rates of investment to recover. Although some Member States and the European Union as a whole have taken some encouraging policy steps, only bolder regulatory reform can release the scale of modernizing investment in telecommunications that Europe needs today if it is to re- establish its competiveness and enable future economic growth and consumer benefits. EARLY COMPETITION: BENEFITS FOR EU TELECOMMUNICATION MARKETS AND CONSUMERS In 1998, the European Union introduced a regulatory framework giving competing telecommunication operators the right to access existing copper and mobile networks at regulated wholesale rates. This policy innovation launched 15 years of intensified competition, producing substantial benefits for consumers: • Lower prices. The price of a 10-minute fixed-to- fixed national call fell from €2.11 in 1998 to €0.72 in 2010—a reduction of 66 percent in 12 years. The Global Information Technology Report 2013 | 93 @ 2013 World Economic Forum
- 118. 1.8: Re-Establishing the European Union’s Competitiveness Similarly, the price of a medium-usage basket of without more region-wide investment, Europe risks falling mobile telecommunication services fell from €42.05 behind other regions. in 2002 to €19.99 in 2010, a decrease of 52 percent in 8 years. Much lower prices mean that consumers New consumer demand requires major infrastructure are enjoying many more minutes of voice services: investment in the United Kingdom, the volume of outgoing voice Fixed infrastructure investment in the early days of traffic grew by more than 900 percent between market liberalization focused largely on upgrading 1998 and 2009. existing networks by adding fiber to the core, high- speed Internet-based switching, and digital electronics • Higher service levels. Competition forced (DSL modems)—all of which allowed faster data providers to try harder to retain their customers communications. But the “last mile” connections by providing higher levels of service. Before 1998, between the modern core and the home remained consumers had to wait several weeks to get a fixed copper based, ultimately limiting transmission speeds line installed at home, but they can now get one in a and volumes. Meanwhile, mobile investments focused matter of days. On the mobile service side, network primarily on introducing digital cellular technology to coverage has greatly improved, the percentage of improve voice services. This technology could carry dropped calls has fallen, and customers can port data at low speeds, as long as traffic grew modestly. their number in one day for free instead of having to These “old” network configurations will not be enough wait several weeks and pay for the privilege. to support the next wave of services that customers are demanding. • Innovative services. Competition also spurred Worldwide, growing numbers of consumers want operators to develop innovative consumer services. constant, high-quality wireless Internet access, along For example, mobile virtual network operators with higher traffic allowances and higher connection in Europe have tailored services to the particular speeds, so they can enjoy newly available Internet needs of specific segments of the population. These services—such as over-the-top video—wherever they customized services include cheaper international are. Greater technical and service expectations from calls for migrant workers and web communities, ring customers have created an explosion in fixed and tones, icons, applications, and discounts specially mobile Internet data traffic. As Figure 1 shows, the designed for youth markets. Alternative fixed global volume of demand for fixed and mobile traffic operators have similarly introduced innovations, is expected to grow by 34 percent and 84 percent, including cheap Internet protocol (IP) telephony respectively, each year to 2015. In the United States, representing 24 percent of all outgoing fixed voice which leads the world in deploying 4G long-term minutes in the European Union in 2010, fiber Internet evolution (LTE) mobile, today operators are experiencing access, and bundled offers. year-on-year growth in demand of more than 100 percent. INVESTMENT RELEASE: THE NEED FOR A NEW The telecommunication industry everywhere REVENUE MODEL needs to make huge investments in fixed and mobile The consumer benefits resulting from liberalization have infrastructure to cope with this new situation. But been delivered by an infrastructure reaching the limits Europe’s investment need is particularly large. According of its capability in terms of both its overall capacity and to our estimates, upgrading the fixed telecommunication the performance provided to the end-user. Increased infrastructure in the EU15 countries to achieve fiber- investment in both fixed and mobile will be required to-the-home (FTTH) household coverage of around to re-establish Europe’s competitiveness, thus both 50 percent and vector-based very high bit-rate digital satisfying consumer and business demand and reaping subscriber line (VDSL) for all other households will the economic and productivity benefits that high-speed require €200 to €250 billion.1 Similarly, revamping broadband technologies can deliver. Europe’s mobile infrastructure to create a mobile network However, the old funding model for financing using LTE technology and covering 95 percent of the infrastructure will no longer work. In today’s world, EU15 population will take another €50 to €70 billion. competition has reduced margins and operators are afraid to invest because they cannot be sure of making Europe’s competitiveness lags in high-speed a return until the industry rules change. Stakeholders networks across the European telecommunication industry Other regions are getting ahead in deploying are debating the best way to reinvent the industry’s next-generation high-speed fixed and mobile revenue model to release the next wave of infrastructure telecommunication infrastructures. For instance, more investment that Europe needs. Speed is critical because, than 90 percent of homes in the United States are already passed by cable operators using hybrid fiber 94 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 119. 1.8: Re-Establishing the European Union’s Competitiveness Figure 1: Over-the-top video: A driver of massive increase in Internet data traffic 1a: Fixed traffic 800 n Total worldwide n European Union 582.1 600 34% Exabytes/month 400 167.0 200 244.8 178.7 50.3 70.5 0 2011 2012 2015 1b: Mobile traffic 10 8 84% Exabytes/month 6 6.9 4 2 2.1 0.6 1.3 0.2 0.4 0 2011 2012 2015 Sources: Cisco 2009–11 Visual Networking Index; McKinsey team analysis. Notes: CAGR = Compound annual growth rate. (1a) Fixed traffic excludes traffic from managed IP telephony and business consumers. (1b) The trajectory line assumes that CAGR slows from its current rate of more than 100 percent. coaxial technologies. These can easily be upgraded to and thus creating “loop unbundling.” This encouraged offer 100 Mb/s downlink and 50 Mb/s uplink speeds operators to invest in fiber links. For instance, Verizon at much lower capital expenditure per subscriber than has now deployed FTTH to most of its subscribers. the kind of vector-based VDSL or fiber infrastructure Developed economies in Asia (Korea, Japan, Hong Kong currently under discussion in Europe. The United States SAR, and Taiwan) have achieved, on average, more gained this advantage partly by giving operators a fixed- than 40 percent FTTH coverage, partly because the term holiday from regulations obliging them to allow large number of people living in high-rise apartments other operators to share their fiber links over the last mile in densely populated Asian cities makes households The Global Information Technology Report 2013 | 95 @ 2013 World Economic Forum
- 120. 1.8: Re-Establishing the European Union’s Competitiveness Figure 2: Trends in the telecommunication sector, 1992–2010 Telecommunication sector revenues Nominal GDP 500 +2% p.a. Total telecommunication revenues to GDP, 400 +4% p.a. +9% p.a. EU countries (100 = 1992) 300 +4% p.a. 200 100 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: OECD, 2011. easier to connect, but also because government support protocol (IP) traffic of 4,818 petabytes (PB) per month, lowers the cost of deploying FTTH to network owners. Europe lags the top traffic-generating regions of North Both regions are also rapidly strengthening their America and Asia, which produce 7,091 PB/month and mobile networks. In Q1 2012, around 64 percent of the 6,906 PB/month, respectively. worldwide 4G LTE subscriptions were in North America, 33 percent were in Asia Pacific, and only 3 percent were The telecommunication sector’s impact on the in Europe. economy at large The low impact of Europe’s telecommunication sector Technology leadership requires investment is evidenced by the fact that, for the first time since the Without further investments, Europe will continue to lose 1990s, the industry in Europe is growing at a slower technology leadership across the telecommunication pace than the region’s gross domestic product (GDP) value chain to other regions. In the network infrastructure (Figure 2). This development is mirrored in the numbers and equipment industry, European-based companies reported by the European Union on the value-added lost 21 percent of the total industry profit pool between by the entire ICT sector. In the United States, the value- 2006 and 2011 to companies from other regions. In added at current prices increased by 8 percent between the handset market, European manufacturers lost 22 2007 and 2010, whereas it decreased in the European percent of their worldwide market share to Asian and Union by 5 percent. In real terms, the value-added North American companies between 2007 and the first increased by 18 percent in the United States and by half of 2012. 7 percent in the European Union. The decrease in the Today’s industry leaders on the services and European Union is the result of the price pressure on applications side are mostly from outside the European both retail and wholesale levels. Union. Most of the leading Internet companies—including This decline in value-added has taken a toll in Google, Facebook, eBay, Yahoo, Baidu, and Tencent— the number of full-time employees working in the are based in either the United States or Asia; none of the industry, which—for a sample of 10 European markets 10 most visited Internet sites hails from Europe. Europe (Austria, Belgium, Denmark, Germany, Greece, Ireland, also has a low level of innovation. Five times more Luxembourg, Portugal, Spain, and Sweden)—has telecommunications-related patent applications are filed dropped from 497,000 in 2000 to 357,000 in 2009. in the United States than in Europe. Not surprisingly, Europe’s growing infrastructure and Internet service and application disadvantage is showing up in comparative Internet usage. With an Internet 96 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 121. 1.8: Re-Establishing the European Union’s Competitiveness Figure 3: Operator revenue per subscriber, Europe vs. United States 3a: Fixed operators 3b: Mobile operators –3% p.a. –8% p.a. 51 47 46 45 US$/month per subscriber 37 US$/month per line 31 29 29 2008 2009 2010 2011 2008 2009 2010 2011 +3% p.a. –2% p.a. 52 52 50 49 49 49 48 48 US$/month per subscriber US$/month per line 2008 2009 2010 2011 2008 2009 2010 2011 n European Union n United States Sources: Pyramid Research, 2011a, 2011b. EUROPE’S OPERATOR REVENUES: MEETING THE subscribers have dropped from US$51 a month per INVESTMENT CHALLENGE subscriber in 2008 to US$46 a month in 2011, a fall of Europe’s telecommunication sector needs a revitalizing 3 percent a year. This represents an annual revenue injection of investment. But relatively low growth and loss of around US$15 billion for the fixed industry since profitability are hindering the region’s operators from 2008.2 In the mobile sector, prices in Europe over the meeting this new investment challenge. same period have decreased at around 8 percent a year. Revenues for both fixed and mobile operators in In contrast, US fixed-line prices increased by 3 percent Europe are falling. Average revenues from fixed-line The Global Information Technology Report 2013 | 97 @ 2013 World Economic Forum
- 122. 1.8: Re-Establishing the European Union’s Competitiveness Figure 4: Annual capital expenditure, Western European operators (2005–09) 50 –4% p.a. 47 40 45 44 40 30 Euros, billion 20 10 0 2005 2007 2008 2009 Sources: OECD, 2007, 2009, 2011. Notes: Western Europe comprises the EU15 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom) plus Norway and Switzerland. Capital expenditure is calculated over five years; data for 2009 are the latest reported by the OECD; data for 2006 are not reported by the OECD. a year and mobile prices fell by only 2 percent a year REGULATING FOR INVESTMENT between 2008 and 2011 (Figure 3). Low investment in the telecommunication industry is Lower revenues in recent years have affected the hurting Europe’s competiveness and denying consumer European industry’s profitability. Between 2004 and benefits. Revenue growth and profitability in the 2011, the earnings before interest, taxes, depreciation, industry need to increase in order to unlock the scale and amortization (EBITDA) margins for the fixed market of investment required to restore them both. Bringing contracted by 4 percent a year, representing €5 billion to revenue growth back to 4 percent a year could generate €7 billion a year of profits foregone. €450–500 billion of additional revenue over the next 10 Declining revenues and thinning EBITDA margins years, according to McKinsey estimates. This would, in mean the telecommunication industry in Europe turn, generate an additional €150–200 billion of profit is investing less (Figure 4). From 2005 to 2009, at current EBITDA margins—enough to get started on Europe invested, on average, US$141 per head in the essential investments in fixed and mobile networks telecommunications, while the United States and outlined above. Public funds might fill the rest of the Canada, in contrast, invested US$212 and US$230 investment gap. per head, respectively, implying a telecommunications Restoring the industry’s revenues to unlock investment gap between Europe and the United States investment requires a “New Deal”—that is, an industry of around US$100 billion over those five years. Moreover, framework that will not only allow pricing flexibility and McKinsey analysis shows that up to 80 percent of the promote consolidation among operators in both the fixed telecommunication investments in Europe’s 10 largest and mobile markets, but will also give operators the telecommunication markets are made by the two or regulatory clarity needed to commit to larger, long-term three leading players in those markets. investments in the industry. Adding to their financial woes, large Several policy steps in the right direction have telecommunication operators have started to pay been taken by EU Member States and by the European dividends to their shareholders reaching up to almost Union region as a whole. For instance, to encourage the half of their cash flow in an effort to keep stock prices construction of next-generation networks, the European high despite all the indicators showing that the industry Union has allocated some funding, initiated a public is past its initial peak. This understandable reaction only consultation on how to promote investment in these further diminishes the industry’s capacity to invest and networks, and indicated in its policy statement in May recover its dynamism. 98 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 123. 1.8: Re-Establishing the European Union’s Competitiveness 2012 that a more investment-friendly wholesale pricing regime is on its way (for more details, see Box 1). Box 1: Policy moves in the right direction Some specific EU Member States and the European Union INCENTIVES FOR INVESTMENT as a whole have made some recent regulatory changes As industry stakeholders shape the region-wide policy that will help to unlock investment. These include: framework that Europe needs to underpin the rollout of • Supporting co-investment initiatives. Recently next-generation fixed and mobile networks, McKinsey several operators in countries—including the offers four additional ideas that relate specifically to Netherlands, Portugal, Spain, and Switzerland—have market structure, pricing, wholesale access regulation, started to consider co-investment initiatives in which two or more operators would join forces to deploy and spectrum. expensive fiber networks. The operators will share the network, but will not be subject to wholesale access • Allow a reduction in the number of fixed and obligations that allow other operators access to the mobile operators. As noted earlier, the fixed market new network for a given period of time, usually the first five years. in Europe is characterized by a large number of small players that compete on price; the few much • Allowing geographic differentiation. A forerunner larger players make little or no investment. Europe’s in taking regional differences into account is the Portuguese decision not to regulate wholesale access consumers might be better served by a fixed in geographic areas where competition exists. In industry with fewer, stronger players able to make rural areas, operators can get support from public larger investments but sufficiently numerous to funding, which in turn will not be offered to companies ensure competition remains vibrant. operating in competitive areas. • Providing public funding. In Sweden, government Europe’s mobile market also needs considerably support for extensive municipal high-speed networks has stimulated the construction of next-generation fewer operators. The EU15 has 56 mobile operators, fixed networks in rural areas, while mobile network while the United States has only four to cover a sharing agreements have lowered the capital required similar size territory and population. Authorities to build new long-term evolution (LTE) infrastructure. should consider allowing operators in Europe to At a regional level, the European Commission also consolidate so they can operate networks and use recently created the Connecting Europe Facility to help fund the rollout of next-generation networks and pan- resources such as spectrum in a more efficient European digital services. manner. • Maintaining the current wholesale price for access to “unbundled” copper connections. The European • Allow more pricing flexibility. Operators need Commission recently released guidelines indicating the flexibility to adjust prices to customers so they that wholesale prices for access to unbundled copper reflect the bandwidth and volume of data traffic that connections should be kept at their current levels so network operators can earn enough to fund the rollout the customers require. With that flexibility, operators of next-generation networks. could consider charging more to the customers who are raising operating costs by demanding higher • Modernizing spectrum policy. The EU commission recently launched its Radio Spectrum Policy Program, speeds, more services, and greater capacity over which sets out general principles for managing the Internet. spectrum in the European Union and defines key policy objectives. It has started to foster spectrum • Restrict wholesale access regulation to a trading among operators to make more efficient use of available spectrum. few basic services; for example, unused fiber and ducts. Combined with allowing operators “regulatory holidays” for a reasonable period on any Source: McKinsey and Company. investments in new generation networks, restricting in this way would give operators a better chance of recouping their investments. • Give operators more spectrum in which to that high-speed backhaul from cell sites is available operate. Such an increase in spectrum could by allocating appropriate frequencies for backhaul contribute to this positive investment outcome. For can all lift the investment value proposition. example, allocating the second wave of the digital dividend spectrum (700 Mz) to wireless broadband use; enabling operators to acquire enough low A combination of the ideas mentioned above, along and high frequency to give them the coverage and with the current measures implemented by the European capacity they need to meet both exploding data Commission, could open the doors for the industry to demand and the “need for speed”; and ensuring The Global Information Technology Report 2013 | 99 @ 2013 World Economic Forum
- 124. 1.8: Re-Establishing the European Union’s Competitiveness Pyramid Research. 2011a. “Fixed Communications Forecast.” Products: invest and revitalize the European economy and re- Growth Strategy Experts, September. Available at http://www. establish its competitiveness on the global scene. pyramidresearch.com. — —. 2011b. “Mobile Data Forecast.” Products: Growth Strategy — NOTES Experts, September. Available at www.pyramidresearch.com. 1 EU15 countries are Austria, Belgium, Denmark, Finland, France, Shah, N. 2012. “Vendor Share: Global Handset Market by Region: Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Q2 2012.” Strategy Analytics. Available at http://www. Portugal, Spain, Sweden, and the United Kingdom. strategyanalytics.com/default.aspx?mod=reportabstractviewer &a0=7647. 2 Incumbent operators of Austria, Belgium, France, Germany, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and Telecompaper. 2012. ”France Telecom Preparing to Cut Dividend: the United Kingdom. Report.” Telecompaper News: General, September 19. Available at http://www.telecompaper.com/news/france-telecom-preparing-to- cut-dividend-report. Teligen Strategy Analytics. 2010. Report on Telecoms Price REFERENCES Developments from 1998 to 2010. Report produced for the Cisco. 2009–11. Visual Networking Index. Available at http://www.cisco. European Commission Directorate General for Information Society. com/en/US/netsol/ns827/networking_solutions_sub_solution.html. Available at https://ec.europa.eu/digital-agenda/download- scoreboard-reports. ComScore. 2012. Media Matrix subscription service, September 21. Available at www.comscore.com. European Commission. 1998. Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee, and the Committee of the Regions. Fourth Report on the Implementation of the Telecommunications Regulatory Package. Available at http://ec.europa.eu/information_society/ policy/ecomm/doc/library/annualreports/4threport/4finalen.pdf. — —. 2011. Telecommunication Market and Regulatory Developments. — Available at http://ec.europa.eu/digital-agenda/sites/digital- agenda/files/Telecom_Horizontal_Chapter.pdf. — —. 2012a. “Connecting Europe Facility: Member States Reach an — Agreement on Building our Future Iinfrastructure.” Press Release, June 7. Available at http://europa.eu/rapid/pressReleasesAction. do?reference=IP/12/583. — —. 2012b. Digital Agenda for Europe: Scoreboard 2012. — Luxembourg: Publications Office of the European Union. Available at https://ec.europa.eu/digital-agenda/sites/digital-agenda/files/ KKAH12001ENN-PDFWEB_1.pdf. — —. 2012c. “Fast and Ultra-Fast Internet.” In Digital Agenda for — Europe: Scoreboard 2012. Luxembourg: Publications Office of the European Union. Chapter 2. Available at http://ec.europa.eu/ digital-agenda/sites/digital-agenda/files/KKAH12001ENN-chap3- PDFWEB-3.pdf. — —. 2012d. “ICT R&D, Innovation and Growth.” In Digital Agenda for — Europe: Scoreboard 2012. Luxembourg: Publications Office of the European Union. Chapter 3. Available at http://ec.europa.eu/ digital-agenda/sites/digital-agenda/files/KKAH12001ENN-chap4- PDFWEB-4_0.pdf. — —. 2012e. Neelie Kroes, Vice-President of the European Commission — responsible for the Digital Agenda. “Enhancing the Broadband Investment Environment.” Statement at Midday Briefing, Brussels, July 12. Available at http://europa.eu/rapid/pressReleasesAction. do?reference=SPEECH/12/552&format=HTML&aged=0&language =en&guiLanguage=en. European Union. 2012. Decision No. 43/2012/EU of the European Parliament and of the Council of 14 March 2012, establishing a multiannual radio spectrum policy programme Text with EEA relevance. Available at http://eur-lex.europa.eu/LexUriServ/ LexUriServ.do?uri=CELEX:32012D0243:EN:NOT. OECD (Organisation for Economic Co-operation and Development). 2007. OECD Communications Outlook 2007. Available at http:// www.oecd.org/sti/ieconomy/oecdcommunicationsoutlook2007. htm. — —. 2009. OECD Communications Outlook 2009. Available at http:// — www.oecd.org/sti/ieconomy/oecdcommunicationsoutlook2009. htm. — —. 2011. OECD Communications Outlook 2011. Paris: — OECD. Available at http://www.oecd.org/sti/broadband/ oecdcommunicationsoutlook2011.htm. 100 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 125. CHAPTER 1.9 How to use, exploit, and contextualize big data, and how to avoid its misuse, have become societal issues. These The Big Opportunity issues matter to everyone because big data will play a key role in overcoming the current economic inertia for Inclusive Growth and achieving the objective of inclusive growth—the involvement of the broadest possible spectrum of people in wealth creation. MIKAEL HAGSTRÖM Many doubt the wisdom of direct government IAN MANOCHA intervention and increased spending to create jobs. SAS Institute Inc. Huge sovereign debt makes this approach problematic in any case. Traditional policy levers to address structural unemployment—such as retraining, increased labor mobility, deregulation, and investment in research—are having a diminished impact, while fiscal consolidation and austerity measures appear to be slowing the return to economic growth. BIG DATA AS A DRIVER OF BUSINESS OPPORTUNITIES Huge untapped opportunities exist in big data, but most commercial organizations in most sectors just do not know how to handle, identify, and exploit these opportunities. The management mindset must change. This is also true of government, which can and must play a central role at the head of a broad coalition embracing business, academia, workers, and students to unlock the potential of big data. If we can recognize big data as the new asset class that it is, the economic upswing could well match that of the second industrial revolution brought about by the mass production methods of Henry Ford and the scientific management techniques of Frederick Winslow Taylor.1 What is big data? Big data is a popular term used to describe the exponential growth in the volume, variety, and velocity of data. At the same time that volumes of data are growing, the data used by organizations large and small are becoming increasingly variable, complex, and difficult to manage using established data management tools. An example is the highs and lows in data volumes created by web traffic originating in multiple sources, both external and internal to an organization. In 2011 alone, 1.8 zettabytes (or 1.8 trillion gigabytes) of data were created2—the equivalent of every person on the planet writing three tweets per minute for 1,210 years. The term big data is therefore relative. It applies— per the assessment of leading information technology (IT) analyst the Gartner Group—when extreme information management and processing issues “exceed the capability of traditional information technology along one or multiple dimensions to support the use of the information assets.”3 This problem presents a huge opportunity: Gartner estimates that, by 2015, big data will directly create 4.4 million IT jobs globally, of which The Global Information Technology Report 2013 | 101 @ 2013 World Economic Forum
- 126. 1.9: The Big Opportunity for Inclusive Growth Table 1: UK industry benefits of big data, £ million, 2011–17 Box 1: What does big data mean for the retail (2011 prices) industry? Industry 2011 2012–17 In its 2011 report, Big Data: The Next Frontier for Manufacturing 5,965 45,252 Innovation, Competition and Productivity, McKinsey Retail 3,406 32,478 estimates that retailers who successfully harness big data Other activities 3,446 27,929 could increase their operating margins by more than 60 Professional services 3,039 27,649 percent.1 Central government 2,517 20,405 Retail is one of the most time-sensitive industries. Healthcare 1,450 14,384 Scott Zucker is Vice President of Business Services at Telecommunications 1,465 13,740 Family Dollar, a grocery mega-chain with 7,100 stores in 45 Transport and logistics 1,360 12,417 states. Family Dollar relies on high-performance analytics Retail banking 708 6,408 to shrink data-processing windows from days to less than Energy and utilities 660 5,430 an hour. Investment banking 554 5,275 Insurance 517 4,595 “Big data allows us to look at product, time and UK economy (total) 25,087 215,964 location—our critical analytical levers—at a much lower level than we ever did before,” Zucker says. “We might Source: CBER, 2012. have looked at class or subclass, at total company, and then at month and sometimes at week. Now we’re looking at SKU, store and day. As we start going down to that level, the amount of information that we need to manage data could change the very nature of economic activity and analyze goes up exponentially.” itself. Our work in the field with hundreds of SAS high- Big data has helped make Family Dollar more agile. performance analytics clients indicates that big data will “High-performance analytics lets you bring to market stimulate entirely new ways of doing things. ideas, services, products and marketing plans much faster than you would ever think possible. No one ever does just To tap into this opportunity, business, government, one iteration of an analysis, right? There’s always the first and society as a whole all need to adjust the way iteration that goes to management, and then they want to they think and act. Without new thinking, the current look at it another way. We go back and forth for multiple excitement surrounding big data could easily lead to iterations. “Before high-performance analytics, that could take disillusionment. The hardware and software technology weeks or even a month. Now you can get data back in needed to solve the volume aspect of the problem is front of management the next day.”2 now in place. Today, you can buy a disk drive that can Notes store all the music in the world for just US$600.7 The 1 McKinsey Global Institute 2011, p. 2. know-how exists as well. Companies that were “born digital”—such as Amazon and Google—have built their 2 Bolen 2012a. success on big data. We now need to extend their data- driven mindsets to more traditional businesses and the public sector. If this happens, big data can get the global economy back on track. 1.9 million will be in the United States. With the multiplier Boxes 1 through 4 provide some examples of the effect, each of these additional IT jobs will create impact big data can have in the retail, utilities, healthcare, employment for three more people outside the tech and public sectors. industry in the United States, adding 6 million jobs to the economy.4 Data-driven decisions Likewise, a recent Centre for Economics and Dynamic pricing in the airlines industry is an excellent Business Research (CEBR) study has identified £216 example of the potential impact of big data on economic billion worth of potential benefits to the United Kingdom activity. Dynamic pricing, based on the analysis of alone through gains in efficiency, innovation, and creation millions of transactions to calculate the best current price driven by insights unlocked from big data (see Table 1).5 point, broadens the market and maximizes revenue. Moreover, according to research by Andrew McAfee Online shopping is another good example. Online and Erik Brynjolfsson of MIT, companies that inject big retailers not only track what customers buy, but also data and analytics into their operations show productivity what they look at and do not buy, their navigation paths rates and profitability that are 5 percent to 6 percent (clickstreams), their propensity to respond to promotions higher than those of their peers.6 and reviews, their own reviews and recommendations, This, however, could be just the tip of the iceberg. and so on. By capturing and analyzing these data, online The overall impact may be far more difficult to quantify retailers can build models and algorithms to predict because, as was the case with Fordism and Taylorism, what other products the individual customer will buy, big data could be a “game-changer” with long-term as well as the next big consumer trends. Moreover, effects that go way beyond improving the efficiency or these algorithms constantly learn from every customer creativity of how we do things today—in other words, big interaction. 102 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 127. 1.9: The Big Opportunity for Inclusive Growth ` Box 2: What does big data mean for utilities? Box 3: What does big data mean for healthcare? Most organizations never saw the era of big data coming. In its 2011 report, Big Data: The Next Frontier for But U.S. Gas & Electric, a major energy retailer in 12 US Innovation, Competition and Productivity, McKinsey states, has been watching closely. estimates that the potential value from data in US “Our industry is on the cusp of smart meters,” says healthcare could be more than US$300 billion per year.1 Greg Taffet, CIO of U.S. Gas & Electric. Taffet is referring “In healthcare, it’s a tidal wave of data. And our ability to the digital devices that will deliver a steady stream of to restructure and change our culture is almost entirely real-time demand and usage information from customer informed by these data,” says Dr Jim LaBelle, corporate homes to utility providers. Electricity providers manually vice president of quality, medical management, and read meters once a month, feed the data into complex physician co-management at Scripps Health, the San algorithms that take into account historical weather and Diego–based company that includes five hospitals. demand patterns, and make purchasing and pricing For several years, Dr LaBelle has been overseeing decisions based on the results. “There is still a lot of an effort to change the culture at Scripps, from measuring interpretation of the data involved,” says Taffet. quality almost entirely by the performance of physicians Within the next five to ten years, smart meters will to measuring quality by the performance of processes, begin streaming usage data to both U.S. Gas & Electric systems, and teams. “We are looking at monitoring and its customers, significantly affecting the company’s variation around processes and driving out waste and business model. Customers are likely to be more energy- supporting better care by developing a management conscious with usage data at their disposal. U.S. Gas system and partnership with the medical staff,” LaBelle & Electric will have an opportunity to offer new services says. and may even begin expanding into ancillary businesses, To inform its approach to these changes, Scripps such as selling high-efficiency air conditioners or offering collects and analyzes variation data. For example, insulation services. in anticipation of re-engineering its emergency room “We think this has the opportunity to benefit both our procedures, Scripps looked at masses of data on wait customers and our own business model,” says Taffet. He times (such as the door-to-doctor metric) and cross- estimates that smart meters will result in 1,000 times the referenced the information against the type of injury, tests data coming through his systems. In preparation, Taffet is that were ordered, and how long it took to discharge investing heavily in infrastructure, especially storage and the patient. “Then we did extensive simulation of our processing capacity. “It is going to be a game changer,” he processes using real-life data, modeling how new and says.1 different processes might work,” LaBelle says. Scripps found that the triage process added an Note unnecessary and wasteful step in getting patients from 1 Economist Intelligence Unit 2011, p. 22. the door to a doctor. It was adding time and cost to the system, and not adding significant value. The company eliminated it. “We were able to reduce door-to-doctor time, add capacity to our emergency rooms, and improve the quality of our service.”2 Other examples of how we have seen big data Notes analytics boosting our clients’ businesses include the 1 McKinsey Global Institute 2011, p. 2. ability to: 2 Economist Intelligence Unit 2011, p. 11. • recalculate entire risk portfolios in minutes and understand future possibilities to mitigate risk;8 • analyze millions of SKUs to determine optimal prices requirement that poses the greatest challenge and it is that maximize profit and clear inventory;9 here that government can play an active supporting role, • better understand customers to optimize product as discussed below. assortments;10 • send tailored recommendations to mobile devices GOVERNMENT BIG DATA INITIATIVES TO TACKLE at just the right time, while customers are in the right UNEMPLOYMENT location to take advantage of offers;11 Government is one of the largest users of data. It must now take the lead both as an exemplar and as an • analyze data from social media to detect new enabler of big data best practices. McKinsey estimates market trends and changes in demand;12 and that the governments of developed European Union • use data mining to detect fraudulent behavior.13 countries could save more than €100 billion (US$149 billion) in operational efficiency improvements alone by In each case, success is determined by how using big data.14 Our work with government agencies effectively the organization (1) harnesses data and uses demonstrates that far more can be saved by using big them creatively, (2) builds models that enable it to predict data to reduce fraud and tax evasion. better and to optimize outcomes, and (3) transforms itself Big data can also help government to make the so that it is more agile in acting on insight. It is this last leap from “fail and fix” to “predict to prevent.” A recent The Global Information Technology Report 2013 | 103 @ 2013 World Economic Forum
- 128. 1.9: The Big Opportunity for Inclusive Growth Figure 1: Social media and unemployment project workflow Public data: Blogs, forums, news Unemployment-related conversations United States and Ireland Sentiments Topics Official unemployment statistics Source: Global Pulse and SAS Institute Inc. 2011, p. 3. Note: Black boxes: Online job-related conversations from blogs, forums, and news were automatically retrieved. Gray boxes: Each document was assigned a quantitative mood score based on the tone or mood of the conversations—for example, happiness, depression, anxiety—it contained. The number of unemployment-related documents that also dealt with other topics, such as housing and transportation, was quantified and categorized into pre-defined lists of document topics representing potential coping mechanisms. White box: These measures—aggregated mood scores and the volume of conversations around different topics—were compared with official unemployment statistics over time in search of interesting correlations. study conducted by Global Pulse, in partnership with mechanisms also showed a significant relationship with SAS Institute, using linguistic analytics, demonstrated the unemployment rate, which may give insight into the how government agencies could harness big data reactions that can be expected from a population dealing from social media to help formulate policies to address with unemployment. For example, the conversations in unemployment.15 The primary goal of the research was the United States around the loss of housing increased to compare the qualitative information offered by social two months after unemployment spikes. media with unemployment figures. We first selected Overall, in this initial research, Global Pulse related conversations from blogs, forums, and news from underlined the potential of online conversations to the United States and Ireland between June 2009 and complement official statistics by providing a qualitative June 2011. picture demonstrating how people are feeling and coping Figure 1 illustrates the project workflow of the study. with respect to their employment status. For all documents (blog posts, tweets, etc. in the The conversations that provided insight ranged public domain), we assigned a quantitative score for from the banal, such as “my beer budget will obviously mood state,16 based on the tone of the conversations. be cut” to the heartbreaking, “a few more months and We also quantified unemployment-related documents we’ll have to seriously consider a bankruptcy” and “sorry that dealt with other topics, such as housing and water bill, this month I will have to pay the electric, next transportation, in order to gain insight into populations’ month the student loan.” Taken together, and tagged coping mechanisms. by mood score, the conversations revealed strong We analyzed these data in two primary ways. First, correlations with the unemployment rate, providing we correlated mood scores with the unemployment leading indicators that unemployment will rise or fall. rate to discover leading indicators that forecast rises Thus, the study showed how linguistic analytics and falls in the unemployment rate. For example, the could provide government with the predict-to-prevent social media conversations in Ireland categorized as capabilities needed to take action before a problem showing a confused mood preceded variations in the manifests itself. At the level of the individual, this could unemployment rate with a lead time of three months.17 mean that retraining is made available months before a Second, the volume of documents related to coping job loss is experienced, thereby reducing dependence 104 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 129. 1.9: The Big Opportunity for Inclusive Growth on benefits. The high market penetration of social media ` among young people makes this especially relevant for Box 4: The public sector can use big data to match skills to jobs youth unemployment programs. While this was a proof-of-concept project, it Singapore’s Ministry of Manpower has developed an SAS shows the potential of using social data to influence analytics solution that draws information from a variety of policy. Building larger databases over time and using departmental sources to support its operations planning, richer geographical information related to the inputs case management, and the early detection of potential workplace and employment issues. This has enabled would allow more detailed analysis and more nuanced it to put resources in place in a timely manner to give approaches at the regional level. employers greater visibility into skills availability, to identify and close skills gaps, and to offer a more targeted service PROPOSALS FOR LABOR MARKET to both employees and employers.1 Analytics can also be applied to anticipate TRANSFORMATION employment needs effectively within a public-sector In the first two sections of this chapter, we discussed organization. Recruitment has traditionally been very slow how big data can impact the economy in the private and in the US public sector (it currently takes an average of 105 public sectors, both by spurring innovation and growth days to fill a post at a federal agency).2 However, the state and by giving government deeper insight into the needs of North Carolina is using an SAS analytics application called NC WORKS that enables the state government to of citizens. For big data to influence the economy further, proactively manage and forecast talent needs. It provides we suggest several measures that are needed to create the workforce with the intelligence needed to respond to the right labor market conditions for big data–driven the changing workforce demographics, including an aging growth. and retiring staff.3 Notes Needed now: A big data skills-for-growth program 1 SAS Institute Inc. 2012b. Talent shortage is the greatest obstacle to realizing value 2 US OPM 2012. from big data. Based on current trends, by 2020 the 3 SAS Institute Inc. 2011. world will generate 50 times the amount of information and 75 times the number of “information containers” it uses now, while IT staff to manage it will grow less than 1.5 times.18 Today’s youth is digitally literate to a degree older Big data to match people to jobs more effectively generations could never have imagined, yet the world Despite high levels of unemployment, companies is not producing anywhere near enough data scientists. continue to experience significant skills shortages. Investigating big data to answer a business question In a recent survey of European decision makers, 43 typically involves a “mashup” of several analytical efforts, percent reported that they are currently facing at least a and this requires a new breed of professional.19 We moderate shortage of required skills.20 Often, the skills need data scientists who are also domain specialists and location of unemployed workers do not correspond in all sectors, from chief digital officer down to entry- to the skills and location of positions available. Big data level workers. Our current educational institutions are can help predict these gaps and mismatches before behind the curve. There are few university programs that they become critical, and can put plans and programs in address big data analytics, let alone that provide degrees place to address those gaps. in data science, and there are virtually no schemes to Government requires better analytics to profile retrain people in big data skills. We need more—far its data about the unemployed to identify specific more—workers who are trained in using information to characteristics, plan appropriate interventions, and then identify and execute business opportunities. track the impact of measures taken over time. Better Putting the tools and methods of analytics into analytics can simplify job searches, automatically provide the hands of the workforce would industrialize the jobseekers with options, identify the capabilities they information-based service economy, much as Frederick lack to qualify for certain jobs, and direct them to the Winslow Taylor’s and Henry Ford’s innovations necessary programs for retraining. industrialized factory management. In Singapore, the If “industrialized,” such an approach can enable Infocomm Development Agency (IDA) has established unemployment agencies to be more proactive in a High-Performance Analytics Centre of Innovation, the matching people to jobs and jobs to people. From a big first of its kind in Asia. Its role is to train professionals data perspective, the process is not that different from in data management and analytics, and to generate what many large companies are already doing to identify intellectual property through co-development with trends and match future supply and demand. institutes of higher learning. The Global Information Technology Report 2013 | 105 @ 2013 World Economic Forum
- 130. 1.9: The Big Opportunity for Inclusive Growth Information and communication technologies to that do not want to move such knowledge in-house, match jobs to people more effectively enabling these organizations to focus on core- The old Catch 22 is at work: workers cannot acquire competency areas that generate business growth. For skills and experience because employers only want example, KPOs might enable an electronics company workers with skills and experience. Deskilling has been to focus more on its core competence—developing a feature of employment booms and may provide part innovative electronic circuitry—instead of employing of the answer.21 The second industrial revolution was people who file patents or run internal IT systems. possible because companies such as Ford introduced production techniques that overcame the shortage of CONCLUSION skilled engineers—opening up employment opportunities As we have shown here, forward-thinking governments for unskilled and semiskilled workers. More recently, the in economies from Singapore to Ireland are already media industry—once dependent on skilled typesetters, taking positive steps toward inclusive growth through graphic artists, and other craft workers—has entered the creative use of big data and analytics. Others must a new age largely as a result of deskilling, facilitated by follow. digital technology. The opportunity is very easy to grasp. Big data can The public sector can take the lead here. deliver insight. With the application of high-performance Policymakers should ask how they can redesign analytics to big data, public and private organizations workplaces to reduce reliance on scarce managerial can get the intelligence they need to support decisions talent. Deskilling in public-sector organizations is likely in hours or even minutes instead of days and weeks. In to mean less top-heavy bureaucracy, flatter hierarchies, simple terms, this will enable businesses to move away and greater workplace democracy, supported by big from the traditional intuitive management approach, data to provide objective insight. which we would characterize as “fail and fix” or “fail fast” There is no reason why such an approach could not to one we would characterize as “predict to prevent” and succeed in the private-sector corporate environment as “predict to perfect.” well. In fact, this approach is highly likely to result in more Fail and fix, though always wasteful, can work agile and competitive enterprises as decisions are made in boom years when there is margin for error. It does more swiftly, but based on scientific analytics rather than not work in the “new normal” of economic inertia. The executive fiat or company politics. fear of failure is too great. The crisis of 2008 should have spelled the end of the fail-and-fix approach. Restructure labor markets to optimize skills creation SAS High-Performance Analytics, which uses parallel In the era of big data, how do we optimize the labor processing and advanced statistical techniques, can value creation and delivery chain for a world where reveal previously unseen patterns and relationships business must adapt and transform itself more and more in big data. It can enable governments and financial rapidly? We must question our very perception of what institutions and regulators to avoid the meltdowns that constitutes a “job” and what constitutes a “profession.” have characterized the financial landscape in recent In an information-led economy, knowledge process years—and it can support business creation, business outsourcing organizations (KPOs) will assume a more efficiency, and business innovation. For that to happen, prominent position in the employment landscape. KPOs mindsets must change to put more trust in analytics and provide sources of technical talent, with the knowledge the people who can interpret data. workers often located remotely from the customer. Although the KPO model has been most closely NOTES associated with information and communication 1 Henry Ford (1863–1947) was the American industrialist and sponsor of the development of the assembly line technique of technology companies, it can be extended to other mass production. Fordism is a concept used in various social areas such as legal processes and research, intellectual theories and management studies about mass production and related socioeconomic phenomena. The term was introduced by property and patent-related services, engineering Antonio Gramsci in 1934 in his essay “Americanism and Fordism,” services, web development applications, CAD/CAM in his Prison Notebooks. Frederick Winslow Taylor (1856–1915) applications, clinical research, publishing, and marketing was an American mechanical engineer who sought to improve industrial efficiency. Taylorism is a theory of management that services. The advantage of KPOs is their flexibility. analyzes and synthesizes workflows. Its main objective was They do away with the traditional recruitment process, improving economic efficiency, especially labor productivity. overcome barriers to labor mobility, and are low risk for 2 Gantz and Reinsel 2011. the employer while offering high rewards and variety for 3 Gartner Group IT Glossary. “Big Data” definition: http://www. the employee. The fast-changing nature of the digital gartner.com/it-glossary/big-data/. economy means there will be increasing demand for 4 Thibodeau 2012. people who want new challenges rather than routine. 5 CEBR 2012. KPOs provide domain knowledge (such as expertise 6 McAfee and Brynjolfsson 2012. in IT, legal, marketing, or accountancy) to organizations 106 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 131. 1.9: The Big Opportunity for Inclusive Growth 7 McKinsey Global Institute 2011, p. 2. Gramsci, A. 1934 (2011). “Americanism and Fordism.” Notebook 22, Antonia Gramsci’s Prison Notebooks 1920–1935. New York: 8 SAS 2010. Columbia University Press. 9 Bolen 2012a. McAfee, A. and E. Brynjolfsson. 2012. “Big Data: The Management 10 Bolen 2012b. Revolution.” Harvard Business Review, October 2012. Available at http://hbr.org/2012/10/big-data-the-management-revolution/ar/1. 11 Bolen 2012c. McKinsey Global Institute. 2011. Big Data: The Next Frontier for 12 Stodder 2012. Innovation, Competition and Productivity, May. Available at http:// www.mckinsey.com/insights/mgi/research/technology_and_ 13 SAS Institute Inc. 2012a. innovation/big_data_the_next_frontier_for_innovation. 14 McKinsey Global Institute 2011, p. 2 SAS Institute Inc. 2010. “Positive Creativity Solves Complex Risk Puzzle: 15 Global Pulse and SAS Institute Inc. 2011. United Overseas Bank CRO Discusses Interplay between Risk Classes and Developing Better Risk Controls for Banking in Near- 16 Mood State is a method by which SAS measures the overall mood Real Time.” Available at http://www.sas.com/success/uob_risk. and specific moods of a data corpus. Unlike sentiment analysis, html. which is a simple positive/negative/neutral decision, mood state analysis offers a more refined measure by which to judge social — —. 2011. “NC Office of State Personnel Uses SAS to Support — media. Documents are scored to provide mood scores for Anxiety, Workforce Planning.” SAS Institute. Available at http://www.sas. Confidence, Hostility, Confusion, Energy, and Happiness. com/success/ncosp.html. 17 Global Pulse and SAS Institute Inc. 2011, p. 11. — —. 2012a. Intelligence Quarterly: Fraud Prevention. Third quarter — 2012. This publication cites many examples of how organizations 18 Gantz and Reinsel 2011. are using data to detect and prevent fraud. Available at http:// www.sas.com/news/intelligence_quarterly/q312.pdf. 19 Davenport and Patil 2012. — —. 2012b. “SAS helps Singapore Ministry of Manpower Improve Its — 20 Accenture 2012, p. 12. Planning and Operations.” Customer Success. Available at http:// 21 Deskilling is the process by which skilled labor is eliminated www.sas.com/success/mom.html. within an industry or economy by the introduction of technologies Stodder, D. 2012. “Customer Analytics in the Age of Social Media.” operated by semiskilled or unskilled workers. This lowers the The Knowledge Exchange, October 3. Available at http://www. barriers to entry into the labor market. sas.com/knowledge-exchange/customer-intelligence/featured/ customer-analytics-in-the-age-of-social-media/index.html. Thibodeau, P. 2012. “Big Data to Create 1.9M IT Jobs in U.S. by 2015, REFERENCES says Gartner.” Computerworld, October 22. Available at http:// Accenture. 2012. Turning the Tide: How Europe Can Rebuild Skills and www.computerworld.com/s/article/9232721/Big_data_to_ Generate Growth. Accenture, with the Federation of Enterprises create_1.9M_IT_jobs_in_U.S._by_2015_says_Gartner. in Belgium. April. Available at http://www.accenture.com/us-en/ US OPM (United States Office of Personnel Management). 2012. United Pages/insight-turning-tide-how-europe-rebuild-skills-generate- States Office of Personnel Management Annual Performance growth.aspx. Report, Fiscal Year 2011. February. Available at http://www.opm. Bolen, A. 2012a. “Will Big Data and High-Performance Analytics gov/gpra/opmgpra/performance_report2011.pdf. Flatten the World?” SAS Voices, April 11. Available at http://blogs. sas.com/content/sascom/2012/04/11/will-big-data-and-high- performance-analytics-flatten-the-world/. — —. 2012b. “Optimizing Assortments with Big Data and High- — Performance Analytics.” SAS Voices, March 16. Available at http://blogs.sas.com/content/sascom/2012/03/16/optimizing- assortments-with-big-data-and-high-performance-analytics/. — —. 2012c. “High-Performance Analytics for Big Customer Data.” — SAS Voices, February 22. Available at http://blogs.sas.com/ content/sascom/2012/02/22/high-performance-analytics-for-big- customer-data/. CEBR (Centre for Economics and Business Research). 2012. Data Equity: Unlocking the Value of Big Data. London: Centre for Economics and Business Research. Available at http://www.sas. com/offices/europe/uk/downloads/data-equity-cebr.pdf. Davenport, T. H. and D. J. Patil. 2012. “Data Scientist: The Sexiest Job of the 21st Century.” Harvard Business Review, October 2012. Available at http://hbr.org/2012/10/data-scientist-the-sexiest-job- of-the-21st-century/ar/1. Economist Intelligence Unit. 2011. 2011. “Big Data: Harnessing a Game- Changing Asset.” September. Available at http://www.sas.com/ resources/asset/105404_0911.pdf. Gantz, J. and D. Reinsel. 2011. “Extracting Value from Chaos.” IDC IVIEW, June. Available at http://www.emc.com/collateral/analyst- reports/idc-extracting-value-from-chaos-ar.pdf. Gartner Group. IT Glossary. “Big Data” definition. Available at http:// www.gartner.com/it-glossary/big-data. Global Pulse and SAS Institute Inc. 2011.“Using Social Media and Online Conversations to Add Depth to Unemployment Statistics.” Methodological White Paper, December 8. Available at http:// www.unglobalpulse.org/projects/can-social-media-mining-add- depth-unemployment-statistics. The Global Information Technology Report 2013 | 107 @ 2013 World Economic Forum
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- 133. Part 2 Case Studies of Leveraging ICTs for Competitiveness and Well-Being @ 2013 World Economic Forum
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- 135. CHAPTER 2.1 In recent years, the information and communication technologies (ICT) sector has come to play a vital role Colombia’s Digital Agenda: and has gained in significance in the area of public policy in Colombia. The Colombian government considers the Successes and the ICT sector to be a priority, acknowledging its importance and its potential impact on the national economy. It Challenges Ahead has taken critical steps toward increasing the country’s interconnectedness and fully developing a national digital DIEGO MOLANO VEGA ecosystem, which it recognizes as having great potential Ministry of Information and Communication for generating wealth and socioeconomic development. Technologies of Colombia International studies suggest that a direct correlation exists between Internet penetration levels, ICT adoption, the generation of employment, and the reduction of poverty.1 A growing ICT industry creates new jobs in multiple industries and sectors. These jobs—unlike jobs in the primary and secondary sectors of the economy, such as agriculture and manufacturing—are focused on new activities of the third sector of the economy: services. ICT jobs are more competitive internationally and often have better salaries than jobs in the primary sectors. Furthermore, there is evidence that each job created by the ICT industry is a catalyst for the generation of employment in other sectors. In the Latin American context, the multiplier effect of employment in the ICT sector is estimated to be 2.42—that is, each job in the ICT industry generates more than 2 new jobs in other areas of the economy.2 At the same time, the development of the ICT industry increases the competitiveness of countries by allowing them to take advantage of opportunities in a market that is increasingly interconnected and that also facilitates the generation of local and global business opportunities. A strong, more developed ICT industry makes a country more globally competitive, as demonstrated by the correlation between the Networked Readiness Index, which measures a country’s preparedness to leverage ICTs, and the Global Competitiveness Index, which measures a country’s overall capacity to boost competitiveness.3 It is clear that ICTs have great development potential, and also that those countries that are best prepared to take advantage of ICTs are those that obtain the most benefit from them. In recent years, Colombia has made important progress: it has improved its ranking in the Networked Readiness Index more quickly than the global average, and it has established itself as the leader in Latin America in terms of e-government tools. BARRIERS TO WIDESPREAD INTERNET USE IN COLOMBIA Colombia has been addressing multiple barriers to achieve widespread Internet use. Obstacles arise in all parts of the digital ecosystem: infrastructure, services, applications, and users. The Global Information Technology Report 2013 | 111 @ 2013 World Economic Forum
- 136. 2.1: Colombia’s Digital Agenda Since President Juan Manuel Santos took office democratic prosperity through the appropriation and in 2010, four main obstacles to the goal of achieving use of technology. Vive Digital is betting on making the widespread Internet use in the country have been Internet ubiquitous. As seen above, a direct correlation identified: between Internet penetration and the adoption of ICTs with employment generation and poverty reduction has 1. The Internet is not perceived as useful. Surveys been demonstrated. Vive Digital uses this correlation have revealed that one of the reasons why the to yield an impact with significant social and economic general public and micro-enterprises do not use benefits. the Internet is that they do not see it as useful or necessary.4 The lack of specialized and useful Plan Vive Digital: Strategy and objectives applications and content for the general public To achieve widespread Internet use, Plan Vive Digital has and micro-enterprises would explain this view. established three specific objectives for 2014: 2. The costs of installing the infrastructure are too 1. Triple the number of municipalities connected to high. In 2010, just 200 municipalities out of the the information highway. The aim is to extend the country’s 1,102 had access to the fiber-optic infrastructure to connect 1,053 of the country’s network. The use of communication networks has municipalities to the national fiber-optic network. been restricted by geographical features and the scattered distribution of urban areas, as well as 2. Connect 50 percent of micro-enterprises and administrative problems that hinder the use of the small- and medium-sized enterprises (known infrastructure that is already present. as MIPYMEs) and 50 percent of homes to the Internet. 3. The resources available to the state for investing in infrastructure are limited. This adds to the 3. Increase the number of Internet connections previous problem. fourfold. By 2014, we want to reach 8.8 million Internet connections.5 4. The purchasing power of Colombians is limited. The costs of hardware and subscribing to the service to get Internet access are relatively high Strengthening the digital ecosystem for the majority of the population, and many Vive Digital envisages the development of the country’s citizens simply do not have the opportunity, from digital ecosystem based on four components: an economic perspective, to use the Internet. 1. expanding the infrastructure, 2. creating services at lower prices, The lack of relevant content in local languages and 3. developing applications and digital content, and the similar lack of interfaces that are accessible to the 4. fostering ICT adoption and use. general public and that give people important information for their everyday lives and businesses largely explain why they perceive the Internet to be of limited use. The foregoing has the purpose of establishing a Penetration is low because there is little demand in light virtuous cycle, where a better infrastructure will allow of the perceived limited usefulness of the service. more and better services at lower prices, which in turn On the other hand, although it has been shown stimulates the development of content and applications, that Colombia has relative advantages in terms of and thus the growth of demand. costs, infrastructure, business environment, and risk, the sector’s development is limited by a lack of human Expanding the infrastructure resources and its industry’s lack of experience. Vive Digital has already achieved a great deal. Colombia has gone from 2.2 million Internet connections to 6.2 AN AMBITIOUS PLAN TO WIDELY EXPAND THE USE million in the last 2.5 years. In 2013, Colombia will reach OF THE INTERNET IN COLOMBIA 7.8 million Internet connections; in 2014, 8.8 million In order to grow the ICT sector in Colombia, the Plan connections. During this period, significant progress has Vive Digital—the most ambitious public policy strategy been made in infrastructure as the tender of the National ever implemented by the Colombian government for Fiber Optics project was assigned: in 2010, only 200 the ICT sector—was established. This plan, to be municipalities were connected with optical fiber, and now implemented during the presidential period 2010–14, there are 553 municipalities with optical fiber access. In aims to give the country a technological leap through 2013, Vive Digital will connect 226 municipalities more; wide dissemination of the Internet and the development and in 2014, it has the goal of connecting a total of of its national digital ecosystem (its users, infrastructure, 1,078 municipalities, reaching 96 percent of the national applications, and services). The plan responds to the territory. Currently, the project has installed more than challenge identified by the government of achieving 15,000 kilometers of optical fiber.6 112 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 137. 2.1: Colombia’s Digital Agenda One of the fundamental tools for providing a consequence, broadband connections grew by 180 nationwide Internet access is mobile Internet connection, percent in the country in 2.5 years.7 for which the fourth-generation (4G) spectrum auction is The penetration of personal computers (PCs) currently underway (although it is important to note that has also increased recently, thanks to the policy that Colombia was the first country in the region to launch eliminated the sales taxes and duties on computers. 4G mobile services). The auction process for Advanced The result is that Colombia is now the place where the Wireless Services (AWS) and 2.6 GHz bands, which has cheapest computers in the region can be found.8 been under discussion since 2012, has gone through a In addition, according to the latest study, the series of steps that result in granting participation to the penetration rate in mobile telephony is 105.3 percent.9 different interested parties and organizations. All these Household connections grew from 17 percent in assignment procedures are carried out by the Ministry 2010 up to 33.8 percent in 2012.10 By 2013, Colombia of Information and Communication Technologies (ICT expects that 43 percent of households will be Ministry) based on the technology neutrality principle connected; the target for 2014 is to connect 50 percent stated in article 2 of Law 1341 of 2009. Regarding of households. In addition, Vive Digital has given 82,000 access to spectrum, that law also establishes that computers to children and youth in more than 3,500 spectrum permits must always observe this principle educational sites through the Computadores para and be adjusted to the ministry’s policies, guaranteeing Educar (the Computers to Educate Program, or CPE). that the usage of assigned spectrum does not generate Approximately 7 million children have benefited from interference with other services, is compatible with the purchase of 577,000 computers, which are being international spectrum usage trends, does not affect delivered to more than 13,500 educational centers. This national security, and contributes to national sustained is the largest purchase of computers ever made by the growth. Colombian government. As part of the country’s infrastructure development In another instance of Colombia’s progress, on activities, content distribution network infrastructure will August 28, 2008, Colombia adopted the European digital be acquired and content companies will be encouraged terrestrial television standard, DVB-T, using MPEG4 to deploy this infrastructure. Infrastructure protocols H.264, with a channel bandwidth of 6 MHz. Following the for home telecommunications will be created that are recommendation of the Comisión Nacional de Televisión confirmed to be both feasible for the industry and (National Television Commission, or its acronym in favorable for users; the coverage of communications Spanish, CNTV) to migrate from the DVB-T standard for in the country will be expanded through the digital terrestrial television delivery to the more advanced universalization of access to public television and the DVB-T2 standard, the Colombian government officially launch of digital radio with the purpose of determining adopted DVB-T2 on December 20, 2011. Regulations its implementation feasibility at the national level. Finally, for the adoption of this more advanced standard for improvements to the Disaster Prevention and Assistance digital terrestrial television in Colombia are established Telecommunication Network are being implemented in Acuerdo CNTV 002/2012 (a regulation issued by the in order to allow for faster, more efficient, and more CNTV—Hoy en Liquidación).11 effective responses when facing emergencies and disasters in Colombia. Developing applications and digital content The expansion of applications and digital content Creating services at lower prices offerings, focused on local needs, will yield greater Services are a vital component of the development of productivity on the part of consumers as well as an digital connectivity. The infrastructure allows operators increase in development opportunities. to expand their service offerings, increasing coverage as Applications are computing tools that allow users well as technological engagement on the part of users. to communicate, execute procedures, and learn Some examples of services are Internet service, mobile and work from different types of terminals, such as phone service, and text messaging services. computers, tablets, or mobile phones. Digital content To ensure that by 2014 the country will have offerings refers to the content that can be accessed by competitive offerings of new-generation technology, the applications. Together, advances in these two areas Vive Digital envisages doubling the number of Internet are essential for a healthy digital ecosystem and are access terminals and updating regulations with the already well under way. purpose of promoting new services, the wider use of Since 2010, the ICT Ministry’s e-government ICT infrastructures, and ensuring massive citizen access program, Gobierno en Línea, has framed its activities in to IT. Colombia has implemented measures that have the National Development Plan 2010–2014 and in the allowed, through public-private actions, the widespread Plan Vive Digital, especially in the applications, content, use of the Internet; these measures include subsidies for and users components defined by the digital ecosystem Internet access aimed at lower-income inhabitants. As of Vive Digital. The Global Information Technology Report 2013 | 113 @ 2013 World Economic Forum
- 138. 2.1: Colombia’s Digital Agenda The e-government department promotes the • Promotion of mechanisms to optimize the implementation and use of the e-government strategy by technological infrastructure of the organizations: means of two initiatives: (1) encourage good government the Government Intranet Data Center has 77 through the use of ICTs, and (2) give citizens the power applications from 12 organizations that have to interact with the state through the use of ICTs. on-demand computing services, generating savings of US$3.3 million on infrastructure services. • Encourage good government through the use of ICTs. This initiative is intended to strengthen • Now 137 organizations use the state’s high-speed e-government in public administration institutions network. and to promote the implementation of the strategy in the legislative and judicial branches of the public • The launch of the Urna de Cristal (Crystal Ballot Box) power, in the autonomous public organizations, and has made the government more open to oversight in the rest of public sector. The initiative is supported and has elevated the level of accountability of by three processes in order to fulfill its objective: government officials.12 Meanwhile, hiring processes (1) design and innovate to collect and create the at both the national and regional levels are directives, products, and services of the strategy; monitored by the Electronic Hiring System.13 (2) provide technical services and solutions; and (3) appropriate e-government in the state to promote Strengthening the digital content industry is of knowledge, implementation, and use of online paramount importance to a successful digital ecosystem. government tools by public officials and employees. Colombia is currently implementing a digital content policy to address this need. One of the main goals of this • Give citizens the power to interact with the policy is that, by the end of 2014, there will be 17 digital state through the use of ICTs. This initiative is centers all across the country (called Vive Labs). These intended to strengthen the capacities of citizens and centers will provide a place in which anyone can learn businesses to relate to public organizations and to digital content skills and will empower new entrepreneurs create opportunities for collaboration, participation, with high-quality equipment and licensed software. and information for social development. This In another example, Fortalecimiento de la Industria process is called Adoption of e-Government in TI (FITI) is a program that aims to contribute to the Society. transformation of the IT industry in a world-class sector.14 In order to fulfill this aim, the program works through In 2012, the national government online website, different action lines that integrate a systemic model. Gobierno en Línea, had the following results: In addition, the MIPYME Vive Digital program seeks to boost competitiveness, productivity, and • An increase in the offerings and quality of online employment in the country by widely expanding the use procedures and services to approximately 1,024 of the Internet among micro-, small- and medium-sized partial and total online procedures and services enterprises in Colombia. Vive Digital’s objective is to throughout the country. increase Internet penetration among micro-enterprises to 50 percent. When President Santo took office, only 7 • The promotion of e-government culture through percent of micro-enterprises were connected and used electronic channels: 50 percent of citizens and 78 the Internet, mainly because they were not aware of percent of businesses interacted with the state how the Internet could be helpful to them. The initiative through electronic channels in 2012. has centered its efforts on deploying applications for micro-enterprises through medium-sized and large • A total of 19,222 public officials and contractors enterprises that can improve their business relationship were taught and made familiar with ICTs. and processes using these applications with hundreds or thousands of micro-enterprises, which are their providers • Policies and directives to promote e-government or distributors. In this way, micro-enterprises see the development: directives were implemented in real business value of the Internet and appropriate its security, usage, interoperability, data access, and use in their daily operations. The government is also zero paper. working with ICT providers (such as telecommunication operators, PC vendors, and software developers) to • Improvements in the information exchange between change and complement their products so that they public organizations: 56 public organizations include business applications specifically for micro- released information exchange services in the enterprise sectors. Internet penetration among micro- interoperability platform. enterprises had increased almost threefold by December 2012, and is now at 20 percent. 114 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 139. 2.1: Colombia’s Digital Agenda The Apps.co program seeks to have a strong digital Another initiative from the ICT Ministry, En TIC entrepreneurship ecosystem in Colombia. The results Confío is a nationwide program that seeks to promote are very impressive: more than 21,000 Colombians are confidence and security in the use of the Internet learning how to code, and more than 480 projects are and other ICTs in Colombia, as well as divulging and looking for business opportunities. All these projects appropriating content concerned with the productive, are being supported by accelerators and institutions creative, safe, respectful, and responsible use of ICTs in that have been trained by Bob Dolf and Steve Blank, order to help improve the quality of life for all Colombian two of the most successful entrepreneurs in the world. people. Currently the ICT Ministry is supporting 70 companies Through this ICT Ministry program, we seek to looking for venture capital investment. In that way, the recognize and prevent behaviors that occur every ministry aims to foster both ICT entrepreneurship and day and are present in the virtual world as sexting, private investment within the country. cyberbullying, phishing, Internet addiction, and child pornography. En TIC Confío is focused on guardians, Fostering ICT adoption and use teachers, parents, and children in the educational The model is based on the premise that it is necessary community. To date, it has reached 78,915 people to encourage the offering of and demand for digital through interactive conferences. Since 2011, it has services at the same time. The objective is to create a produced over 700 pieces of related content that aims to virtuous cycle: expanding the infrastructure promotes empower the fight against these unwanted behaviors. the offer of low-cost services, which encourage the In 2012, 1,476 URLs to sites containing child development of digital applications and content, which pornography were published by the ICT Ministry platform in turn stimulate demand for these two products on so they could be blocked by Colombian ISPs. the part of users, who will then have more incentives to By the end of 2014, it is expected that 150,000 acquire and use these services—thus increasing the size people will have been effectively reached by the of the market. conference for the responsible use of ICTs. Furthermore, The CPE program is responsible for bridging the 300 new pieces of content for the program will have social and regional gap of Colombia by bringing ICTs been generated, and outreach campaigns such as to children in rural and remote zones and by training Ciberpapaya, Cibercuidado, and Monstruos en Red will teachers to be better acquainted with technology. The allow us to achieve at least 20 million impacts in media aim is to improve the quality of education in public (print, radio, television, and the web). schools. This program also helps the environment by Another project, the Digital Citizenship Program, recycling obsolete computers. According to an impact seeks to promote access, use, dissemination, and evaluation, the CPE reduces dropout rates, raises adoption of ICTs among public servants and in the standardized test scores, and increases the probability public education sector. The initiative aims to increase that a child will enroll in higher education. levels of incorporation, adaptation, and integration of When President Santos took office in August technologies as required for achievement of sustainable 2010, there was a ratio of 20 students per computer. growth in Colombia, ensuring increased productivity and On December 2012, this ratio was reduced to 15 to 1, competitiveness while consolidating the quality of the thanks to the delivery of more than 250,000 terminals Colombian educational system. Every public servant and (including laptops, PCs, and tablets). The program teacher in Colombia is to be trained and certified under has also trained 14,000 public school teachers in the the program by 2014. use of ICTs. Aligned with environmental initiatives, the To date, there have been 300,000 people registered program has refurbished 753 tons of obsolete computers for the Digital Citizenship Program; by 2014, 700,000 (approximately 36,600 computers) in order to reduce the are expected to have completed their digital citizenship impact that ICTs have on the environment. training.15 In 2013, the CPE program plans to deliver Redvolucion is another interesting social project 266,147 terminals to 12,100 public schools, libraries, aimed at encouraging and inspiring a significantly and community centers (which includes 4,500 new heightened use of the Internet by community members establishments that had not received this benefit earlier). through stimulating education and training. It also aims It also plans to provide 150 hours of teacher training in to promote the use of ICTs to meet various everyday ICTs (at least one teacher in each establishment), and to needs, thereby creating an emotional engagement with train 180,000 parents for 12 hours in order to develop technology.16 The online portal is equipped with a variety their ICT skills. Finally, in 2013, CPE expects to set a of learning activities related to ICTs on an interactive record in terms of environmental strategy by refurbishing multimedia web platform. Training is targeted at the more than 29,800 obsolete computers (612 tons) taken lower strata of society and is carried out by high school from public schools. students. The Global Information Technology Report 2013 | 115 @ 2013 World Economic Forum
- 140. 2.1: Colombia’s Digital Agenda To date, over 110 educational institutions are the Government Leadership Award 2012 for the included in Redvolution´s project. The goal for 2014 is to Plan Vive Digital at the Global Telecommunications reach 3,000 educational institutions. Conference in Barcelona, based on “the management and strategies established by solid REGIONAL IMPACT telecommunication regulators, based on clear The goal of the ICT Ministry is to impact all 32 principles that encourage private investment and departments in Colombia through three strategies:17 healthy competition in the last twelve months.” Winning this award highlights Vive Digital as an 1. Promotion of the ICTs offered in each of the innovative telecommunication policy with a high departments of Colombia through: economic and social impact. The CPE program — promoting the creation of regional ICT of the ICT Ministry was designated as a world institutions, model for exemplary performance in access to — providing support for the integration of the technologies and knowledge at the opening of the different ICT issues into the development World Summit on the Information Society that is plans of both departments and towns, and held in Geneva, Switzerland. In addition, the CPE — representing ICTs in the regions via ICT program was chosen as a project that generates regional advisers. lessons that can be replicated elsewhere in the 2. Joint financing of regional projects through the world. For CPE, the fundamental principle is to Vive Digital Regional initiative, which would entail: reach the teachers with training in their own context, — providing technical support in the so that they get the most out of technology. That is development of projects to be presented in the added value of this social program, as well as official announcements, the care and maintenance that allows educational — developing nationwide announcements for venues in Colombia to have technical support. joint financing of regional projects, and — supporting the execution of regional projects • Colombia is the second highest ranked country in through a local supervision support scheme. Latin America and the Caribbean for e-government, according to the Survey of the Economic and Social 3. Regional research development, which would Department of the United Nations. include: — developing regional research studies as a tool • Colombia is the sixth highest ranked country for the decision-making process, and worldwide for electronic participation, according to — developing best-practices studies in the the Survey of the Economic and Social Department execution of regional agreements. of the United Nations. To date, the ICT Ministry is working in 26 of the country’s 32 regions on the joint financing of projects • Colombia is the tenth best ranked country to strengthen regional digital ecosystems. The budget worldwide on electronic services, according to the for the joint financing of ICT regional projects to support Survey of the Economic and Social Department of Colombian regions grew nearly sevenfold, from US$26 the United Nations. million (47 billion pesos) in the previous quarter to US$180 million (323.5 billion pesos) in the current one. The technological challenges that face the country Additionally, a public policy for the regionalization are significant. However, we have identified these of ICTs, which considers the equity in available challenges and we have the desire and willingness to opportunities for the regions and the elimination of do what it takes to overcome them. To that end, we boundaries, the encouragement of innovation, and good rely on a highly qualified technical team and on the governance as basic performance principles, has been support of the national government. The goals have structured. been established and we are on track. Little by little, The ICT Ministry motivated the departmental and we have witnessed how the investments we have made town governments to include ICTs as part of their in infrastructure have improved the development of the development plans, with the destination of services digital ecosystem in Colombia. resources for more than US$44 million (78 billion pesos) These investments are an indispensable stepping for the joint financing of regional projects. stone in moving forward with the adoption and ownership of IT as an important tool for decreasing GENERAL ACHIEVEMENTS unemployment and poverty, while increasing the • On February 28, 2012, Colombia won the award country’s competitiveness. The impact of the Plan Vive for the government with the most innovative telecommunication policies in the world. It won 116 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 141. 2.1: Colombia’s Digital Agenda Digital can also be seen in the latest study of digital consumption in Colombia, released in February 2013.18 NOTES 1 See http://www.mintic.gov.co/index.php/english-life-digital and studies from Raul Katz (Columbia University). For more information regarding Katz’s work, visit http://www.udesa.edu.ar/files/ UAAdministracion/CV%20profesores/RAUL%20KATZ.PDF. 2 See studies by Raul Katz, Columbia University, 2010; http://www. mintic.gov.co/index.php/english-life-digital; UNCTAD 2010. 3 World Bank 2010; World Economic Forum 2011. 4 For the attitude of the general public, see the ICT Ministry’s 2010 survey of 2,300 low-income inhabitants in 43 municipalities; Ipsos Media IT’s 2012 survey of 1,005 inhabitants in major cities of Colombia. For the attitude of small and medium-sized businesses, see the ICT Ministry’s 2010 survey of 1,500 small and medium-sized enterprises in 43 municipalities. These surveys were conducted by McKinsey & Company while assessing the ICT diagnosis for the Plan Vive Digital in October 2010. 5 The definition of Internet connections in Plan Vive Digital includes wired connections of speeds of more than 1,024 kb/s and 3G/4G wireless connections. 6 ICT Ministry data. 7 ICT Min 2013. 8 Intel, 2012 notebook price comparison study, Colombia-USA, November 22; IDC, 2012 notebook and PC price comparison study, Latin American countries. 9 ICT Ministry 2013. 10 ICT Ministry 2013. 11 CNTV 2012. Acuerdo No. 002 of 2012 is published on the Authority’s Internet site at http://www.antv.gov.co/normatividad/ acuerdos/2012/acuerdo_002.pdf. 12 More information about the Crystal Ballot Box is available at http:// www.urnadecristal.gov.co/. 13 For more information, visit http://www.colombiacompra.gov.co/. 14 For information about FITI, see http://www.fiti.gov.co/. 15 For information about the Digital Citizenship Program, see http:// web.unad.edu.co/ciudadaniadigital/. 16 Details about Redvolucion can be found at http://redvolucion.gov. co/s/inicio. 17 Colombia is divided into 32 departments. These in turn are divided into municipalities. 18 See the presentation of the survey (in Spanish) at http://www. slideshare.net/DiegoMolanoVega/encuesta-de-consumo-digital. REFERENCES CNT (Comisión Nacional de Television). 2012. Acuerdo No. 002, 6 April. Available at http://www.antv.gov.co/normatividad/acuerdos/2012/ acuerdo_002.pdf. ICT Ministry (Ministry of Information and Communication Technologies). 2013. ICT Report 4T of 2012. March. ICT Ministry. Available at http://www.mintic.gov.co/images/documentos/cifras_del_sector/ boletin_4t_banda_ancha_vive_digital_2012.pdf. UNCTAD (United Nations Conference on Trade and Development). 2010. Information Economy Report 2010: ICTs, Enterprises and Poverty Alleviation. New York and Geneva: United Nations. Available at http://unctad.org/en/docs/ier2010_embargo2010_en.pdf. World Economic Forum. 2011. The Global Information Technology Report 2010–2011: Transformations 2.0. Geneva: World Economic Forum. The Global Information Technology Report 2013 | 117 @ 2013 World Economic Forum
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- 143. CHAPTER 2.2 Rwanda’s economy has continued to grow at comparably good rates, averaging 8 percent per annum, The Metamorphosis despite the global recessionary period that started in 2008. The country’s continuing growth in the midst to a Knowledge-Based of the global downturn can be attributed to its good governance and sound fiscal discipline, as well as to the Society: Rwanda commitment from both its public and private sectors to build a more equitable country. ALEX NTALE, Rwanda ICT Chamber, Private In the World Bank’s Doing Business 2012 report,1 Sector Federation Rwanda is ranked number one in East Africa with ATSUSHI YAMANAKA , Rwanda Development respect to starting up a business, registering property, Board-ICT/Japan International Cooperation Agency protecting investors’ interests, enforcing contracts, DIDIER NKURIKIYIMFURA , Ministry of Youth and and obtaining access to credit. The 2012 Global ICT of Rwanda Competitiveness Report, published by the World Economic Forum,2 ranked Rwanda the most competitive economy among the East Africa Community countries and third in sub-Saharan Africa. Rwanda also received the top ranking in East Africa, and 7th in the continent, among countries with active mobile broadband subscriptions per 100 inhabitants in 2011 in the United Nations Broadband Commission report.3 Unlike most African nations, Rwanda has limited natural resources. This limitation presents an opportunity for Rwanda to take an approach to development that differs from that of its neighbors—an approach where information and communication technologies (ICTs) form the linchpin of its plans to fundamentally transform its economy. At the beginning of the decade, Rwanda drew up a blueprint—dubbed Vision 2020—for how to achieve this goal. Adopted in 2000, Vision 2020 outlines several initiatives, programs, and strategies for transforming Rwanda into a middle-income country and transitioning its agrarian economy into an information- rich, knowledge-based one by 2020. Over the past decade, the government and the private sector have invested massively in building the right infrastructure, skills, and institutional frameworks to provide an environment that is conducive to meeting this target: from the establishment of higher institutions of learning to the laying of fiber-optic cable nationwide, this landlocked country is overcoming all obstacles and moving forward. The fact that the country is landlocked alone poses challenges for a nation with big ambitions. But the distance from Rwanda to the coast—both from Mombasa in neighboring Kenya and from Dar es Salaam in Tanzania—was circumvented by connecting to two submarine cables (the Eastern Africa Submarine Cable System, or EASSY, through Uganda to Kenya in Mombasa and The East African Marine System, or TEAMS, submarine cable through Tanzania at the Dar es Salaam coast). This is crucial because it creates the redundancies that ensure high-quality, reliable connections with no, or minimum, interruptions even when a fiber-optic cable has been inadvertently cut by road construction or farming activities. The advantages The Global Information Technology Report 2013 | 119 @ 2013 World Economic Forum
- 144. 2.2: The Metamorphosis to a Knowledge-Based Society: Rwanda of this approach have been witnessed most recently investments have been made in developing world-class when the Mombasa submarine landing site experienced ICT infrastructure. The results are highlighted below: fiber-optic cable cuts that tampered with Internet usage in Kenya and neighboring Uganda, but Internet usage • A high-speed fiber-optic backbone network now was maintained in Rwanda because of the redundancy interconnects all districts and border points of the from the Tanzanian coast. Besides laying the national country. This network interconnects all government fiber backbone, which is underground, Rwanda has also institutions and other private enterprises located in rolled out fiber on its electricity national grid network. Kigali as part of the Kigali Metropolitan Network. In This creates extra coverage above ground and reduces addition, Rwanda acquired international capacity the risk of cut cables that tends to haunt underground equivalent to 2.5 gigabytes (GB), connecting to two cable networks. international routes through submarine fiber-optic In addition, Rwanda has differentiated itself by cables. adopting an approach that translates into putting forth a framework that goes beyond merely utilizing ICTs as • Mobile phone/data coverage for Rwanda’s enablers for socioeconomic development. The country population reached 96 percent in 2011 both through also strongly emphasizes the need to explore how to the efforts of aggressive public investment and become the ICT service provider for the region and the introduction of transparent competition among the continent at large. Naturally this requires strong, private-sector telecommunications operators. harmonious policy and regulatory frameworks to supplement the infrastructure already in place. • A state-of-the-art Tier 3 Data Center, the first of its kind in the region, offers 99.98 percent reliability and POLICY FRAMEWORKS AND ACHIEVEMENTS cloud services. In order to transform Rwanda into a knowledge-based economy, the government integrated ICTs into its • The Karisimbi ICT infrastructure project is equipped Vision 2020 to enable it to leapfrog the key stages of with a communications, navigation surveillance, industrialization. The aim was to transform the agro- and automated traffic management system to ease based economy into a service-oriented, information- the flow of air traffic and reduce the risk of flight rich, and knowledge-based one that is globally delays and cancellations in the busy airspace of the competitive. Rwanda’s unique experience is driven by Common Market for Eastern and Southern Africa/ the strong partnership among the regulatory, policy, and East African Community region. implementing bodies, which are all under the charge of the Ministry of Youth and ICT. • The establishment of a digital terrestrial television The national ICT strategy and plan—commonly (DTT) transmission system boosts television, known as the National Information Communication radio, and telecommunication coverage and the Infrastructure Plan (the NICI Plan)—was adopted by deployment of digital television transmitters have Rwanda in 2000, under the auspices of the United improved nationwide television coverage—to 95 Nations Economic Commission for Africa, as a holistic percent coverage of the nation’s physical territory— approach to using ICTs for development. Each of hence satisfying citizens’ rights to access to four five-year phases (NICI spans 20 years in total) information. characterizes this strategy and is aligned with the country’s overall development goals and vision. • Multipurpose community telecenters, public information kiosks, and ICT buses have been NICI I: The creation of an enabling environment deployed across the country to increase access The first phase, NICI I, effectively focused on creating to ICTs, provide ICT literacy training, and raise an environment conducive to using ICTs as tools for ICT awareness, among other services. The development in Rwanda by putting in place effective establishment of an innovation center provides an implementation and coordination mechanisms. These ecosystem in which startups combine innovation included, but were not limited to, the appropriate and entrepreneurship to produce homegrown institutional, legal, and regulatory frameworks that would solutions for local challenges along with globally support rapid development of Rwanda’s ICT sector, scalable knowledge. liberalize the telecommunications industry, and reduce entry barriers to the telecommunications market. Enhanced service-delivery programs Owing to the robust ICT infrastructure that has been NICI II: The development of ICT infrastructure put in place, the government has been able to improve The second phase of the plan, NICI II, concentrated on operational efficiency in the public sector. ICT initiatives establishing critical national ICT infrastructure. Huge that foster development in key economic sectors and 120 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 145. 2.2: The Metamorphosis to a Knowledge-Based Society: Rwanda that greatly improve Rwanda’s service-delivery system thereby facilitating sustainable economic competitiveness have been established. These initiatives fall into three and increasing ICTs’ contribution to GDP. In this phase, main categories: emphasis is placed on five focus areas that will accelerate service development and fuel economic growth: • In business: – business incubators and career development • Skills development: developing high-quality skills support services; and a competent knowledge base for workers; – online trade information portals; – online tax calculators; • Private-sector development: developing a vibrant, – a credit reference bureau; competitive, and innovative ICT sector and ICT- – a land administration and management enabled private sector; information system; – an electronic case management system for legal • Community development: empowering and cases; transforming communities through improved access – online business registration; to information and services; – a smart national identification system; and – improvements in online banking and the • E-government: improving government operational e-transaction regulatory system. efficiency and service delivery; and • In agriculture: • Cyber security: securing Rwanda’s cyberspace – E-Soko—a mobile market information solution that and information assets. allows farmers and consumers to access market information for agricultural products; and With the establishment of the Kigali Free Trade – the agricultural management information system. Zone, Rwanda again looks at moving forward and fast- tracking development in all sectors. The zone will be • In healthcare: home to various industries, including an ICT park. It will – Open MRS—an open-source medical records provide tax incentives for businesses situated there, system that facilitates nationwide tracking of especially those targeting the export market—these patient data; incentives include a 0 percent corporate tax value- – TRACnet—a system that allows the central added tax exemption, a 0 percent import duty, and a collection and storage of clinical health 100 percent research and development costs write-off, information; among other advantages. At the core of the technology – Mobile e-Health—a system used by community park will be Carnegie Mellon University, a world-class health workers to collect data for Open MRS and university with which the government of Rwanda has TRACnet systems; and partnered to establish a center of excellence that will – telemedicine facilities connecting hospitals in rural develop much-needed, highly skilled ICT professionals. areas to referral hospitals in urban areas. The technology park, which will be heavily oriented toward research and development, is envisioned to The impact of ICTs on foreign direct investment foster key clusters in ICTs, including business process in Rwanda outsourcing, cloud computing, ICT education and With the huge investments in ICT infrastructure, over training, e-government, cyber security, and mobile US$540 million in foreign direct investment (FDI) has solutions. been attracted to the ICT sector. This has led to an influx of foreign institutions setting up operations in Rwanda. The composition of the ICT industry Among these are VISA, Inc., the multinational financial Rwanda’s ICT private sector is classified into eight services and global payment systems giant that set up categories under the ICT Chamber in the Private Sector its Rwandan offices in late 2011; and Airtel, the fourth- Federation. Although the industry is still young, it is largest telecommunications company in the world, which growing quickly, both domestically, with new business began operations in March 2012. registrations from fresh ICT graduates, and with foreign multinationals. The composition of the industry can NICI III: Service development be categorized according to different business lines: The third phase of the plan, NICI III (also known as the software developers, telecommunication and Internet NICI-2015 Plan), is focusing on the development of service providers, broadcasters, information technology services by leveraging ICTs to improve service delivery equipment resellers, ICT capacity-building businesses, to Rwandan citizens. NICI III’s overarching goal focuses system integrators under ICT solutions providers, and, of on accelerating service development through ICTs, course, cyber café operators. These different business The Global Information Technology Report 2013 | 121 @ 2013 World Economic Forum
- 146. 2.2: The Metamorphosis to a Knowledge-Based Society: Rwanda Figure 1: Telecommunications market share, incumbent Internet service providers 1a: Market share, March 2012 1b: Market share, June 2012 n MTN Rwanda n Tigo Rwanda n Airtel Rwanda Source: ITU World Telecommunications/ICT Indicators Database 2012; Ookla Net Index 2012. lines are organized as associations, with forums to competitive. The coverage for each network is depicted share experiences and challenges that may face them in Table 1. all. Cross-cutting ICT issues within the associations are represented by the ICT Chamber; for matters that Table 1: Coverage of operators, June 2012 pertain to the general business environment and are not Geographical Population unique to ICTs, the Private Sector Federation is engaged. Operator coverage (%) coverage (%) Although the most vibrant of these business lines or MTN Rwanda 97.9 97.7 Tigo Rwanda 78.7 97.1 associations are the telecommunications and Internet Airtel Rwanda 3.0 9.0 service providers groups, the industry continues to Source: PMO, 2012. evolve. The development of the telecommunication industry Trend of fixed and mobile subscribers The telecommunication industry is dominated by three In a clear indicator of the success of the adoption of mobile phone operators: MTN Rwanda, Tigo Rwanda, ICTs, the mobile phone penetration rate of Rwanda and Airtel, with a combined mobile phone penetration rose meteorically between 2002 and 2012. Figure 2 rate of 47.5 percent as of August 2012, and over 10 shows the trend in the numbers of both fixed line and licensed Internet service providers. mobile subscribers from the year 2002 to June 2012, Total investment in the telecommunications sector in and illustrates how phone penetration took off in 2007. 2011 was over US$46 million; it exceeded US$36 million Between June 2012 and October 2012 alone, mobile for the first six months of 2012. teledensity has risen from 44.4 percent to 47.5 percent. Telecommunication market share Internet penetration rate MTN Rwanda is leading in terms of mobile subscribers, From 2008 to 2010, there was an exponential increase with 63.7 percent of the market share, followed by Tigo, of Internet penetration, made possible by the increase which has 33.9 percent. Airtel Rwanda, which began of competition in the telecommunication sector. In 2011, operating in March 2012, has the lowest market share— we observed a slight decrease in Internet penetration 2.4 percent, as illustrated in Figure 1. because of the revocation of the mobile license of one of the operators, Rwandatel. Network performance and coverage All three operators are making the investments necessary to upgrade their respective networks and be 122 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 147. 2.2: The Metamorphosis to a Knowledge-Based Society: Rwanda Figure 2: Trends of fixed and mobile subscribers, 2002–12 6 5 No. of subscribers, millions 4 3 2 1 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Rwanda Utilities Regulatory Authority (RURA). HUMAN CAPACITY BUILDING The One Laptop per Child initiative is aimed at In line with Vision 2020, the government of Rwanda is familiarizing Rwandan schoolchildren with computers committed to investing in human capital. This translates and preparing them to gain quality skills through ICT- into nurturing a strong skills base and fostering an based innovative education content. This ongoing environment that promotes knowledge and skills transfer program has already distributed more than 110,000 between academia and industry. laptops in primary schools across the country. At tertiary-level institutions, the National Electronic Carnegie Mellon University-Rwanda Distance Education and Training Programme One of the approaches to knowledge creation and complements campus-based education by deploying transfer can be seen in the induction of Carnegie Mellon electronic message technologies, in addition to the tele- University (CMU) in Rwanda as a means to transform education program at the Kigali Institute of Education graduate education. With a history of excellence in higher and African Virtual University at KIST. education, and as a global thought leader in technology innovation, Carnegie Mellon is the first US research ICT innovation center: The Knowledge Lab (kLab) institution offering degrees in Africa with an in-country In tandem with Rwanda’s journey to becoming a presence and resident faculty—transporting first-class knowledge-based economy, the government—in education to the Rwandan education scene. CMU’s partnership with the private sector and the Japan presence will dramatically transform the knowledge base International Cooperation Agency—have put in place in the country and incorporate capacity building. kLab, an ICT innovation center with the mission of promoting and supporting the development of innovative ICTs in education ICT solutions by nurturing a community of entrepreneurs The government of Rwanda has implemented numerous facilitated by experienced mentors. ICT initiatives in education that are transforming the field. KLab brings like-minded innovators together and These initiatives include training in ICTs for primary and provides the resources needed to explore and exchange secondary school teachers; scholarships in science their ideas—resulting in innovative solutions to local and technology; the ICT Training & Research Institute problems. KLab hosts coding competitions, seminars, at Kigali Institute of Science and Technology (KIST); the classes, and other community-led events. Similar Educational Management Information System, and the initiatives across the world have shown that the synergy Rwanda Development Gateway—an information portal created through such an environment is a critical aspect that includes education information. in the growth of a healthy ICT sector. The Global Information Technology Report 2013 | 123 @ 2013 World Economic Forum
- 148. 2.2: The Metamorphosis to a Knowledge-Based Society: Rwanda CHALLENGES AND THE WAY FORWARD country is essential to its development. Rwanda’s Despite the tremendous progress that has been made, telecommunications market is still dominated by the ICT sector continues to encounter challenges that voice-centric mobile services. hinder its development. Among these challenges are: With nationwide fiber-optic coverage, the country is embarking on ensuring that last-mile • The limited availability and high costs of energy: access is provided to fully maximize the opportunity The nation is known as the “land of a thousand at hand. A study has been commissioned with hills.” This geographical configuration has posed the aim of mapping out Rwanda’s broadband challenges to the penetration of the national grid needs across the entire country in order to bridge network and has led to limited electricity availability the digital divide through last mile broadband in those places that are not easily accessible. connectivity. The plan is to install fiber to some The high costs of electricity have stemmed from premises and wireless broadband for the rest. its limited generation, which has—in the past— depended on hydro generation. Coupled with high • Limited access to finance: There is still a void in transmission costs and legacy power management Rwanda’s technology sector with regard to funding, systems, these factors have led to the high costs of especially for early-stage companies that need angel energy in Rwanda. and venture capital. The ecosystem that attracts The challenge has been understood and FDI flow is nonexistent at the moment. Coupled measures are being taken to address it, beginning with high lending rates, the lack of finance makes it with a huge campaign for alternative energy sources difficult for would-be entrepreneurs to see ICTs as such as solar and biomass fuels, among others. an avenue for establishing business. Unlike other The potential of employing new mechanisms of sectors—such as financial services and real estate, transmission and distribution management through which have seen a boom in venture capital flow— a SMART electricity grid and energy market design technology has not yet benefitted from its potential. are also being considered. The lending regime in Rwanda is also such that loans are given against collateral; in most cases, • A shortage of highly skilled ICT personnel: The this is the company’s assets. This model does not shortage of highly skilled ICT personnel has resulted fit well with ICT companies, since the assets are in key investment opportunities being missed. usually in software, which banks consider to be As early 1997, three years after the country’s highly risky and do not fit well in their risk analysis devastating genocide, Rwanda recognized the models. need for technology as a driver of growth. The Working with local banks, initiatives are being government thus established KIST with the sole launched to help financial institutions develop risk purpose of producing highly skilled engineers to analysis models that can address the industry’s serve the nation’s development goals. However, the needs—particularly those that are into software demand kept growing, with the result that more and development. Campaigns are also being carried out more universities have been introducing ICT-focused to attract venture capital firms from the region and courses. But even with all these efforts, there is beyond to look at the opportunities in Rwanda. One still a skills gap. This gap has been identified as a such initiative—the Rwanda Innovation Endowment consequence of the late adoption of ICTs by the Fund—seeks to facilitate startup companies in three students. major areas: ICTs, agriculture, and manufacturing. This obstacle is now being solved by early ICT The initiative, which will provide funding up to adoption. ICT courses are now introduced at very US$50,000 to qualifying projects, aims at promoting early stages through initiatives such as One Laptop the most promising innovations with seed capital. per Child. It was also in response to this challenge that Rwanda invited CMU to set up a campus in CONCLUSION Rwanda to provide training in highly specialized ICT Rwanda is making the remarkable journey from an courses. agrarian economy to a knowledge-based economy with a strong focus on providing services and information. • Low broadband Internet penetration: Although The Rwandan experience can serve as an illustration of Rwanda ranks above many African countries in how a nation with limited natural resources can invest Internet penetration, the penetration rates by which in human capital and make use of ICTs to transcend it leads are still very low by its own standards; it is economic shortcomings and emerge as a leader in its actively working to address this situation. In the end, region. Rwanda considers that providing affordable and The aligned vision of all stakeholders in the ICT stable broadband access throughout all parts of the sector, along with the partnerships with all other sectors 124 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 149. 2.2: The Metamorphosis to a Knowledge-Based Society: Rwanda at the national level, will translate into ICTs acting to enable all tiers of socioeconomic development in Rwanda. The unified efforts of all sectors to adopt ICTs in their operations have made all the difference. The country’s experience has not been without challenges: bridging the knowledge and skills gap to create an information-rich, skilled society base and bridging the digital divide are two focal points of interest addressed in the ICT and education policies of Rwanda. The induction of CMU in Rwanda, along with the concerted efforts made at the tertiary level to produce quality technopreneurs, will pay off by creating a strong, highly skilled workforce. In addition, by laying a backbone of optical fiber around the country and at all border points, Rwanda has invested heavily in laying the groundwork to make sure every Rwandan has access to communication technologies. This intricate groundwork will also serve to attract more FDI to Rwanda as a means to further stimulate ICT growth in the region. Rwanda’s ambitions permeate its borders: it intends to capitalize on its central location in Africa and act as a hub for banking and financial services, as well as business process outsourcing services, leveraging on the strength of its ICT sector. With seven years to meet Vision 2020 and counting, Rwanda is already emerging as a regional ICT leader. The country confidently looks to heralding ICT growth not only in the region, but also on the continent as a whole. NOTES 1 World Bank 2011. 2 World Economic Forum 2012. 3 United Nations Broadband Commission 2012. REFERENCES PMO (Prime Minister’s Office). 2012. Brief Report on Telecom Operations. Rwanda Utilities Regulatory Authority, December. United Nations Broadband Commission. 2012. The State of Broadband 2012: Achieving Digital Inclusion for All. 2012. Geneva: ITU and UNESCO. Available at http://www.broadbandcommission.org/ Documents/bb-annualreport2012.pdf. World Bank. 2011. Doing Business 2012. Washington, DC: World Bank. World Economic Forum. 2012. The Global Competitiveness Report 2012–2013. Geneva: World Economic Forum. The Global Information Technology Report 2013 | 125 @ 2013 World Economic Forum
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- 151. CHAPTER 2.3 Most Latin American countries entered the 21st century with a gloomy economic outlook. Although the 1990s E-Government in Latin did not acquire the “lost decade” stamp of the 1980s, Latin American economies were not able to leap forward America: A Review of the and catch up to the level of socioeconomic development of the most advanced nations. The dawn of the 1990s Success in Colombia, witnessed shock to the financial markets with the real currency crisis in Brazil; the 2000s began with the Uruguay, and Panama financial crisis in Argentina, with its decision—made in 2001—to suspend payments to international creditors on MIGUEL A. PORRÚA its sovereign debt. The consequences of this decision Organization of American States are still fishtailing around the tables of international courts, as can be seen clearly in a report issued by the Congressional Research Service in February 2013 under the title Argentina´s Defaulted Sovereign Debt: Dealing with the “Holdouts.”1 The first decade of the new century ended up presenting a remarkable socioeconomic advancement in the majority of Latin American countries. Part of that general progress runs parallel to a conscious and valued effort to bring the countries of the region into the knowledge-based society. This conscious effort is emphasized in the cases of Colombia, Uruguay, and Panama, which will be analyzed in this chapter. THE ARRIVAL OF E-GOVERNMENT IN LATIN AMERICA In the crisis context described above, governments in the region live under constant pressure to meet the needs of their citizens with the fewest resources possible. This call for efficient management of public finances has been answered in most countries by state modernization programs that are in their second or third generation and are thereby becoming a stable institutional framework for any public administration transformation. Most of these programs rely on significant financial and technical support from the American Development Bank and, to a lesser extent, the World Bank. While maintaining a primary focus on the efficiency and effectiveness of public administration, these state modernization programs are actually a widespread call for transparency in the public sector. The Latinobarómetro annual report continues to express concern about the future sustainability of some democracies in the region for two main reasons.2 First, a large proportion of citizens wait eternally for the economic benefits of democracy to arrive. Second, high levels of corruption permanently call into question the credibility of public institutions and those in command of them. At the beginning of the century, information and communication technologies (ICTs) began to make a serious breakthrough in all areas of Latin American society. That magical combination of telecommunications and computing, manifested in the Internet, began to demonstrate its huge potential—not only by enriching The Global Information Technology Report 2013 | 127 @ 2013 World Economic Forum
- 152. 2.3: E-Government in Latin America the more creative entrepreneurs but also by touching on same year, the Agenda for Connectivity released the every area of daily life, transforming it forever. Colombian State Portal, funded by the Presidential Al Gore, the former vice president of the United Anti-Corruption Program. The Agenda for Connectivity States, deserves credit for making a big push to subsequently guided the progress of e-government in introduce ICTs in the US government, showing countries the Andean country until it was renamed “Government throughout the world how this can be done. Online” and revised under President Alvaro Uribe. In the 1990s, when the Washington Consensus Equally visionary in the use of new technologies preached trade liberalization, financial market openness, in the public sector was the government of Fernando market-driven currency exchange rates, tax reforms, Henrique Cardoso (1995–2003) in Brazil. The SOCINFO and other well-known economic policy prescriptions to (Society + Information) program, launched in 1999, Latin America, ideas about the new public management not only laid the foundation for development of the (NPM) methods also appeared in the region. Although ICT industry in Brazil over the next decade, but also the countries that followed the NPM creed were left with was the starting point for regional pioneering projects a network of autonomous institutions responsible for of e-government such as Receitanet (which allows certain government services and some successful public citizens to file and pay taxes online) and Comprasnet service outsourcing processes, the public management (which manages government procurement through the system in the region remained largely over-regulated and Internet). The use of ICTs in electoral processes in Brazil process-focused. As a consequence, the importance of would merit its own paper, since Brazil’s experience in results and efficiency never were recognized. Several of this area is recognized as one of the most advanced the government-controlled autonomous institutions that in the world—the country allows all votes to be cast provide water, electricity, or telephony services still in electronically through over 400,000 electronic voting operation in the region illustrate this trend of the 1990s. machines.5 The described context in Latin American countries The pioneering steps taken by Chile, Colombia, presents a scenario in which one of the theories and Brazil were soon followed by Argentina, Mexico, developed by Douglas Holmes on the “Internet effect” Peru, Uruguay, Panama, and others that began by using in the public sector is particularly relevant.3 According to the Internet as a means of interacting with their citizens this theory, the Internet comes to public administration in areas related to tax collection, public procurement, as a tool that invites people to re-think and, above all, or customs. This is not surprising because, for those one that creates excitement in a sector characterized by looking for public investment in ICTs, the easy-to-sell conservatism and boredom. speech included concepts such as “more revenue Quite soon the term e-government, popularized collection,” “lower expenses,” or, ideally, a combination by the Clinton administration in the mid-1990s, found of both. In addition, the adoption of the Inter-American its Spanish version as e-gobierno in Latin America. Convention against Corruption in 1996 pushed The term and what it represents was widely adopted transparency to a central place in the political agenda and began to impact the functioning of government. of the region, thereby increasing interest in any tool that However, adopting is far from embracing. During the could support a more transparent management of public second half of the 1990s, we see mere flirtations with resources. e-government in Latin America through isolated actions, Throughout the first decade of the 21st century, but no evidence of generalized use. every Latin American country made some effort to Analyzing these early forays into e-government by advance e-government. However, many of these efforts Latin American countries with the privileged lens granted are characterized by their secondary place in the political by time passed, we can classify these early attempts agenda and the lack of fulfillment they showed toward as reasonably successful and essential to the further some of their promised impact, particularly in terms of development of e-government in the region. In Chile, usage of online services. Today, although many countries during the administration of President Eduardo Frei have established appropriate institutional structures and (1994–2000), the first strategic documents on the use have set out their respective visions in comprehensive of ICTs to improve the competitiveness of the country plans, others remain working on their first plans and are in general and the functioning of the Chilean public still seeking the appropriate institutional solution. administration in particular were developed. In 1999, A quick glance at the website of the Network Chile’s Internal Revenue System was one of the first on Electronic Government of Latin America and public institutions in Latin America to have an interactive the Caribbean (RED GEALC; www.redgealc.net), in presence on the Internet, and 5 percent of its tax returns particular the different editions of the e-government were filed online that year.4 awards excelGOV,6 lets us conclude that the majority Around the same time, in 2000, under President of American countries have successfully implemented Andres Pastrana (1998–2002), Colombia launched numerous e-government solutions in all areas of public its national Agenda for Connectivity. In August of the administration. There is, therefore, a wealth of experience 128 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 153. 2.3: E-Government in Latin America from which to learn and a foundation on which to build a became one of the first strategic documents related to plan for the next steps to accelerate progress. the knowledge-based society in the region, emphasizing Although the efforts made so far are commendable, the purpose of the Agenda and saying in part: and those who have led from either the political or the managerial sphere deserve the highest recognition from The National Government has designed the their citizens, we live in a global world where frequently Agenda for Connectivity as a state policy, one needs to run in order to remain in the same place. which seeks to expand the use of information Indexes, global studies, and rankings related to the technology in Colombia and thereby increase use of ICTs in the public sector indicate that, although the competitiveness of the productive sector, most of Latin America trotted toward a knowledge- modernize public institutions and socialize based society, some countries in Asia and Europe were access to information [author’s translation]. galloping. In the second half of the first decade of this During President Pastrana’s administration, the century, a group of Latin American countries followed Presidential Program for ICT Development and the in the footsteps of those pioneers of e-government to Colombian Government Portal were also launched. emerge as leaders and show the region that, although In the early years of President Alvaro Uribe’s in the discipline of e-government there is no recipe administration (2002–10), the focus was on bringing that guarantees positive results, there are some good some institutional order to the management of practices that seem to lead to success. We consider knowledge-based society initiatives and providing human three of these countries in the sections that follow: and financial resources for the Agenda for Connectivity. Colombia, Uruguay, and Panama. By this time, the Agenda had become state policy. The government under President Uribe maintained THE PATH TAKEN BY COLOMBIA the Agenda and strengthened its link to the National Colombia had been one of the close followers of the Development Plan 2003–2006, which validated and pioneers, but it lost traction during the transition from reaffirmed it, making it a driving force for fundamental President Pastrana to President Uribe. It is now regaining elements of socioeconomic progress such as education, that traction under the leadership of President Santos. health, safety, and local development. Colombia took its first steps in e-government in an In addition, President Uribe showed his commitment encouraging fashion. First, the country undertook an to the advancement of ICTs in the country with the exercise of reflection and strategizing at a high political signing of two decrees: Decree 3816 of 2003 established level that resulted in the document CONPES 3072 the Intersectoral Council for Policies and Management (National Council for Economic and Social Policy),7 of Information for Public Administration. This decree which—as early as 1999—included an introduction with became a key element for the approval of resources for the following paragraph, remarkable for its time because the Agenda for Connectivity as well as for the adoption of its vision of the far-reaching nature of ICTs: of interoperability standards within the Colombian government. Decree 1151, issued in 2008, launched Information Technologies are tools that an updated view of e-government in Colombia—the enable the development of a new economy Government Online Strategy—along with a set of goals [E-conomía], the construction of a more to be achieved by all branches of government, as well as modern and efficient National State, universal a timetable and a mechanism for monitoring them. access to information, and the acquisition and The arrival of President Juan Manuel Santos gave effective use of knowledge—all these building a definite boost to Colombia in its progress in the use blocks to the development of a modern society of ICTs in the country as a whole and in the government [author’s translation]. in particular. Building on the accumulated experience and giving continuity to the team that had been working The Internet had not yet exploded, smart phones in the Colombian Government Online Strategy for had not even been imagined, and the founder of years, the Ministry of Information and Communication Facebook was still in high school when the government Technologies launched the Vive Digital (Live Digital) of Colombia talked about the e-economy, the connection strategy.8 In just two years, Vive Digital achieved of ICTs, the construction of a modern state, and the remarkable results,9 making Colombia the winner of the acquisition and use of knowledge. Fourteen years ago, well-known Global System for Mobile Communications this was quite a vision for policymakers in Latin America. Association (GSMA) Government Leadership Award This strategic document, which incorporates the given during the Mobile World Congress in Barcelona in first Colombian Agenda for Connectivity as an annex, February 2012. was followed a few months later by Presidential Directive In this environment, Colombia’s rise in the most 02, signed by President Andres Pastrana. This directive widely used e-government rankings—such as the The Global Information Technology Report 2013 | 129 @ 2013 World Economic Forum
- 154. 2.3: E-Government in Latin America Figure 1: Colombia’s position in the UNDESA E-Government rankings, 2003–12 60 50 E-Government rank 40 30 20 2003 2004 2005 2008 2010 2012 Source: UNDESA E-Government Survey, available at http://www.unpan.org/egovkb/global_reports/08report.htm. Networked Readiness Index (NRI) published by the sector, modernize public institutions, and socialize World Economic Forum and the E-Government access to information. Survey published by the United Nations Department 3. Financial resources must be sufficient. Since for Economic and Social Affairs (UNDESA)—is not its launching in 1999, the Agenda for Connectivity surprising. As shown in Figure 1, during the period has had the financial resources needed to carry 2005–11 Colombia experienced an upward trend that out its planned initiatives. Initially, the Agenda positions it as one of the leaders in the region in the depended heavily on international financial use of ICTs the modernization of public administration. cooperation, as evidenced by the fact that it was The country moves from 57th position in 2003 to 43rd created under a United Nations Development position in 2012, going as high as 31st place in 2010. Programme Transparency project, but gradually Colombia’s experience provides some important gained its place in the general state budget. lessons for other countries that are still defining their Under the leadership of the Minister of Information approach to e-government: and Communication Technologies, Diego Molano 1. Political support must be strong. In Colombia, Vega, the government of Colombia announced the introduction of ICTs in the society in general ICT investments of US$750 million per year (5.5 and the public sector in particular has always billion Colombian pesos for four years),10 thanks in counted on strong political support at the highest part to partnerships with the private sector, which level, from the first directive signed by President will contribute 40 percent of the total amount. Pastrana in 1999 to the launching of Vive Digital 4. E-government must reflect and respond to the by President Santos in 2010. concerns of citizens. Colombia soon discovered 2. The use of ICTs must be state policy. The that it was essential to focus on the citizen to continuity of plans, initiatives, and teams succeed in e-government. The country became a throughout the last few years underscores the pioneer of the concept of apropiación—a Spanish importance of the principle stated in the first ICT comprehensive concept that refers to access, strategic document released in 1999, which set adoption, usage, and sense of ownership—and up the Agenda for Connectivity as a state policy created an office dedicated to this matter within that seeks to expand the use of ICTs in Colombia the Government Online program. This citizen to increase the competitiveness of the productive adoption-ownership vision is understood as the 130 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 155. 2.3: E-Government in Latin America need to listen to citizens; to communicate with Uruguay’s recent rapid progress in e-government.12 them before, during, and after the implementation AGESIC is physically near the Office of the President, of e-government solutions; to seek and attract and it became the institutional space for careful strategic them to e-government through modern thinking focused on the digital agenda of the country, marketing tools; and to ensure a minimum level of as reflected in the Uruguay Digital Agenda 2008–10 connectivity and a basic knowledge of how to use (Agenda Digital Uruguay is now in its second, 2011–15, the tools. version).13 This document is a comprehensive exercise 5. Cooperation across nations enhances that focuses on the building blocks of e-government, progress. According to Roberto López, the establishing elements such as a public key infrastructure, general manager of the regional e-government an interoperability platform, a computer emergency network RED GEALC, during the past 10 years, readiness team (CERT), and a mechanism for online Colombia has been the most active participant payments. It also sets up operational initiatives of all countries in Latin America in the network’s that introduced Uruguay to the knowledge-based activities. Colombia has requested the most international arena. Among these initiatives is the Plan information, participated in more expert Ceibal14—which was awarded the highly regarded exchanges, presented the most candidates for excelGOV Prize 2009 by the RED GEALC. the excelGOV awards, and been involved in more These early achievements of AGESIC soon acquired working groups and research activities than international visibility, and were probably one reason any other country in the network. Throughout that Uruguay became home to the first meeting of this decade, Colombia has learned from Ministers and High Authorities of Electronic Government other countries’ experiences in order to move in Latin America and the Caribbean.15 This meeting faster and more successfully along the path of was organized by the OAS in collaboration with the e-government. The website of the RED GEALC, International Development Bank and the International in the horizontal cooperation area,11 illustrates this Development Research Center as well as AGESIC itself. idea with specific activities. Colombia, as noted earlier, is the most internationally oriented of the RED GEALC network countries, and 6. Institutional and workforce capacity must Uruguay certainly comes second on the list of those be excellent. The Colombian government has looking for international experiences; the country is conducted one of the most important efforts in always ready to learn and share knowledge beyond its Latin America in building institutional capacity own borders. through the training of its human resources. President José “Pepe” Mujica not only underscored Through agreements with the OAS, CINTEL, the importance of ICTs for Uruguay’s development, but SENA, universities, and other institutions, also enhanced support for AGESIC. President Mujica the government program has trained nearly himself participated in the international e-government 200,000 civil servants in different areas related to event “Towards an Integrated State” in May 2011, giving e-government. a speech where he publicly reiterated his presidency’s support of the e-government initiatives led by AGESIC THE ROUTE TAKEN BY URUGUAY and defended the principle of putting ICTs at the service The Oriental Republic of Uruguay has demonstrated of citizens and humanizing the current technology- that it is not necessary to be one of the economic oriented society. powerhouses of a region to take big steps toward Along with this support, AGESIC counted on two integrating the country, particularly the government, into additional elements that help to explain Uruguay’s a knowledge-based society. recent success in the field of e-government. First, Uruguay took its first steps toward e-government political support was reflected in the program’s financial early, with the creation of the National Committee for resources. Since its inception, AGESIC’s budget allowed Information Society. In 2000, the issuance of Decree it to expand from 30 employees in 2007 to 160 in 225, signed by President Jorge Batlle (2000–05), late 2011, and to lead numerous initiatives—such as launched the Uruguay in Network initiative. But the e-Government Interoperability Platform and the e-government really took off in the Southern Cone REDUY communications infrastructure initiative16—with country during the administration of President Tabaré its own financial resources. Moreover, the Uruguayan Vázquez (2005–10). government entrusted the leadership of AGESIC to Although the country’s e-government portal was an executive director who offers a deep knowledge of launched and efforts to bring connectivity to schools public administration and a business profile linked to the began in the early 2000s, it was the creation of the field of technology. This combination of qualifications in Agency for Electronic Government and Information the most senior AGESIC executive, Jose Clastornik, has Society (AGESIC) in 2007 that provided the basis for The Global Information Technology Report 2013 | 131 @ 2013 World Economic Forum
- 156. 2.3: E-Government in Latin America Table 1: The evolution of Uruguay in the Networked Readiness Index rankings, 2005–12 Year 2006–2007 2007–2008 2008–2009 2009–2010 2010–2011 2012 Rank 60 65 65 57 45 44 Source: World Economic Forum, The Global Information Technology Report, various years. proven instrumental to both the political and operational to implement elements ranging from design to success of the institution. deployment and subsequent operation. By being A remarkable aspect of the Uruguayan progress local, these qualified ICT professionals not only toward a knowledge-based society is the significant can act faster but also can understand the local role played by Uruguayan businessmen linked to ICTs. culture better, thereby increasing the chances of Among its members, the Uruguayan Chamber of success in the implementation of e-government Information Technologies (CUTI) has many small- and projects. medium-sized Uruguayan enterprises with regional presence and recognition.17 These companies have THE WAY OF PANAMA elevated Uruguayan technology exports from US$50 Although President Mireya Moscoso (1999–2004)’s million in 2000 to US$225 million in 2010.18 This mandate created the e-Panama National Commission availability of advanced knowledge and technology in October 2001, aside from the national strategic solutions within the country has undoubtedly been a document Agenda for Connectivity and some sectoral catalyst for expanding Uruguayan e-government. progress—especially in the form of the introduction Table 1 shows Uruguay’s path to success, as seen of ICTs in education—Panama made no outstanding in The Global Information Technology Report 2012 advances during this period. The e-Panama published by the World Economic Forum. The country Commission, which at the time constituted a good moves from 65th in the world in 2005 to 44th in 2012. planning exercise, never had the necessary financial Uruguay’s experience offers some lessons, listed below, resources to achieve the goals proposed. According to that can benefit other countries currently implementing media reports, the resources available to the commission or planning to implement initiatives in this area: did not exceed US$1 million in two years of operation.19 In 2004, then-new President Martin Torrijos (2004– 1. Presidential proximity is crucial. In addition to 09) provided an important push for ICTs in Panama. political support at the highest level, proximity to Even before taking office, President Torrijos showed the president is essential for managing the day- clear signs that he attached great importance to ICTs to-day activities of e-government. In this sense, as tools for state modernization. Just 30 days after the functional independence from the presidency taking office, he signed Decree 102, which created the has been instrumental to the success of AGESIC Secretariat for Government Innovation. This decree managing the operational portion of its agenda, provides the secretariat with broad powers to advance as has been AGESIC’s formal link to the Office the knowledge-based society, both in the country in of the President through the Deputy Secretary of general and in the Panamanian government in particular. the Office of the President, who is a member of In practical terms, it raised the matter to a ministerial AGESIC’s board. level, because the secretary reports directly to the 2. Excellent, well-qualified leaders are essential. president, thus endowing the Secretary for Government Overcoming difficult challenges requires leaders Innovation with a significant level of access to and with the best credentials. In the case of AGESIC, dialogue with cabinet ministers. Projects such as the having a chief executive officer with business Digital Agenda, PanamáCompra, PanamaTramita, and experience, deep ICT industry knowledge, and others that allow Panama to advance its modernization a history of working in public service has been a efforts were brought forward, setting the basis for the key factor in its success. development of the information society in Panama. The government of President Ricardo Martinelli 3. Local ICT businesses must be nurtured. (2009–present) made a smooth transition from the The availability of a well-developed local ICT former Secretariat for Government Innovation to what industry has been a cornerstone in Uruguayan became the Authority for Government Innovation (AIG) progress toward a knowledge-based society. by passing Act 65 in October 2009. Led by a general It has provided easy and immediate access to manager who reports directly to the president, the AIG knowledgeable advice and qualified professionals has enhanced international cooperation, particularly with 132 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 157. 2.3: E-Government in Latin America Table 2: The evolution of Panama in the Networked Readiness Index, 2005–12 Year 2005 2006–2007 2007–2008 2008–2009 2009–2010 2010–2011 2012 Rank 66 65 64 66 58 60 57 Source: World Economic Forum, The Global Information Technology Report, various years. the Republic of Korea, and has increased collaboration organizational chart of the government of Panama with the private sector to compensate for limited financial is near the Office of the President, it is also its resources. own legal entity. This independence provides The AIG has retained those aspects of the an important operational freedom that has been secretariat that were considered to be functioning instrumental in establishing alliances and agility in well, including some members of the team; performed project implementation. This autonomy became a strategic review; and planned to refocus its efforts very instrumental in attracting Eduardo Jaen as and provide a renewed push to lift Panama’s score in general manager. He brought not only a business the e-government rankings of the NRI and UNDESA’s view to the management of ICTs in government Survey. Under the leadership of Eduardo Jaen, the but also the valuable experience of having been AIG emphasizes two key goals on which Panama will IBM’s general manager for Central America. build its final leap to e-government. The first is to bring connectivity to every municipality in the country. The COMMON ELEMENTS: THE TRIANGLE OF second is to put the management of public resources SUCCESS across the government in order through the modern The recent experiences of Colombia, Uruguay, and solution of government resource planning (GRP). The Panama confirm the theories of those who research Paperless Panama project, the 311 Citizen Service e-government and the suspicions of those who work Center, and the municipal e-government program MuNet every day in this field. Although there is no magic formula Panama are some of the initiatives that, in little more than for success in advancing ICTs in public administration, two years, have given Panama international recognition those who do succeed share some common ingredients. as well as helped it progress in the previously mentioned The first of these common ingredients is the political e-government rankings.20 support of the highest authority in the country. In all This progress, shown in Table 2, can be attributed three cases analyzed, the support of the president has to the following reasons and might be a valuable been instrumental in mobilizing other critical elements, reference for other countries: such as legislative changes, institutional strategy, and budgetary allocation. 1. Extraordinary political support at the highest Another common ingredient in these e-government level. As discussed above, the last three success stories is the attention paid to the qualification presidents of Panama have included ICTs both in of human resources. This component has two equally their speeches and actions, passing legislation relevant sides: the leader and the team. Although they and launching initiatives. President Martinelli have not done it alone, Jose Clastornik (Uruguay), especially emphasized the importance of ICTs Eduardo Jaén (Panama), and Diego Molano Vega during his speech at the 67th United Nations (Colombia) share a common characteristic that became General Assembly in September 2012, presenting crucial for the advancement of e-government in their them as key instruments to accomplish the respective countries. All three, for different reasons, are Millennium Development Goals. able to communicate directly with the highest authority 2. A continuous and participatory planning in the government and know how to interact in their effort. The last of these efforts, the AIG Strategic country’s political sphere. At the same time, they are Plan 2010–14,21 shows a clear vision not limited each very knowledgeable about ICTs, after having had by the usual need for results in the short term. successful careers in the private sector. Long-term initiatives such as infrastructure A third factor—usually a consequence of the deployment projects and organizational culture previous two—is the availability of financial resources. In transformation are included among other actions recent years, Latin America has seen too frequently how of more immediate impact such as e-safety and sound political speeches on the subject of ICTs failed to the municipal e-government program. change the life of any citizen and never moved beyond a nice planning document adorning the bookshelf of 3. Legal independence and functioning some ministerial office or multilateral organization. On autonomy. Although AIG’s position in the many occasions, this is because of one fundamental The Global Information Technology Report 2013 | 133 @ 2013 World Economic Forum
- 158. 2.3: E-Government in Latin America Table 3: E-government Office annual budget, Uruguay (2008–12) 2008 2009 2010 2011 2012 Annual budget (US dollars) 9,231,536 7,485,041 9,966,243 15,165,654 16,988,859 Source: AGESIC, available at www.agesic.org.uy. reason: they did not “put their money where their mouth strategic approach, introduce new projects, and adapt is,” as the famous saying goes. In those countries where the priority areas to ever-changing citizens’ needs and ICTs do not have their own line in the national budget, technology opportunities. years will continue to go by without solid ground being established for future socioeconomic progress. THE CHALLENGES AHEAD The budgets of other countries, such as Uruguay, All governments in the region—those more advanced in ensure that ICTs have sufficient financial resources by providing e-government and those lagging behind—face allocating specific amounts to e-government in their a similar challenge to remain competitive in the global budgets. Table 3 shows the evolution of investment in e-government arena: connectivity. According to the e-government in Uruguay over the last five years. last NRI,23 published by the World Economic Forum in 2012, in the Latin American region, only Uruguay and OTHER FACTORS CONTRIBUTING TO SUCCESS Chile are ranked among the top 50 countries worldwide Although slightly less relevant and less evident than the for broadband Internet subscriptions. Uruguay ranked three elements discussed above, some other aspects 47th on this indicator with 10.9 percent penetration and that have accelerated the progress of e-government in Chile ranked 50th with 10.5 percent. The Netherlands, the countries studied are worth mentioning. ranked 1st in the world in the 2012 NRI for broadband One such element is the search for international Internet subscriptions, had a penetration rate almost points of reference. As pointed out earlier, the organized four times those of the Latin American top countries. In effort to study, understand, and learn from what others mobile broadband subscriptions, the panorama does not have done, along with the initiative needed to visit improve much. Uruguay (ranked 42nd) and Chile (45th) countries that are more advanced and invite them to had rates of 9.7 percent and 9.0 percent, respectively. help, have been part of the corporate and political Ecuador was in 47th place, with a rate of 8.3 percent. culture of the three countries studied. Colombia, Korea, the top country in this indicator, showed a mobile Uruguay, and Panama have made this idea a dogma. broadband subscription rate of 78 percent. They have participated in numerous instances of As Chile discovered during its early e-government international relations and cooperation and have taken efforts, merely making modern e-government solutions full advantage of the experience of others. available to the citizens does not guarantee that Another important aspect that should be considered citizens will use them. Colombia, an avid observer of is concerned with the ICT-related business capacity international experiences, quickly realized that well- installed in the country. Colombia very cleverly used its planned marketing and active promotion under the Vive Digital push to generate an emerging entrepreneurial umbrella of an “Appropriation Office” would help to sector in the field of ICTs. These entrepreneurs were reach out to those who are connected. The problem is able to grow because of the investment efforts of the that, as the above-mentioned figures show, broadband government; this, in turn, ensures that Colombia has connectivity still benefits a minority of the population. It the local knowledge needed to progress.22 Uruguay should not be a surprise, then, that the main objective has enjoyed a thriving and exporting technology sector of the latest Colombian ICT strategy, Vive Digital, is to for the past 15 years. And Panama, with its enviable multiply the number of broadband connections in the geographical location, also has a large number of ICT country by four, with strong emphasis on low-income multinationals operating within its borders. households. Finally, in all three countries a certain element of Closing the connectivity gap between Latin continuity has been maintained in both their plans and American and developed countries will require the their working teams. In some cases, the ruling party deployment of a great deal of infrastructure throughout itself changed; in other cases, the ruling party remained the region. Regardless of the method chosen (optic in power. But in all three countries, a change of party or fiber, dark fiber, satellite, whitespaces, etc., and their president did not mean a radical break in approach or multiple combinations), the necessary investments are policy. In all three, many members of the team remained challenging. If the governments in Latin America are in place and the majority of initiatives were continued, to take seriously the connectivity gap and the hurdle it and the changes provided an opportunity to review the poses for the socioeconomic progress of the region, they 134 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 159. 2.3: E-Government in Latin America will need to work with the private sector and put in place The interoperability problem becomes bigger when decisive policy actions. For these big investments to you consider cross-border situations. E-government become a reality, financial contributions from the private will be seriously limited in its ability to deliver on its sector will be critical. In addition, some minimum policy promises if applications and databases are not able commitments will have to be made and implemented. to communicate among themselves outside national At a minimum, legislation must be passed that attracts borders. Customs procedures, health services, security, investment into the sector by opening it to competition, judicial collaboration, natural disaster cooperation, establishes the necessary investment protection, creates international transportation, and many other services a framework for public-private partnerships, and makes require international interoperability if they are going to good use of all the radio spectrum available. The more provide citizens with efficient services. The RED GEALC ambitious countries, such as Colombia under the Vive network has participated in discussions and research Digital, will even set up tax breaks for the imports of on regional interoperability over the past five years, computing equipment. but this is just a tiny light in an uncertain scenario. The Even before the arrival of the Internet, the region exchanges have taken place at a technical level, but suffered a connectivity gap between those with access interoperability has not yet gained ground in the regional to phone service and those without it. In order to close political agenda. Given the difficulty of the topic and this gap, beginning in 1994, programs of universal its relevance for a region that wants to take the most access funds for telecommunications proliferated in possible advantage of e-government, political leaders Latin America. In general, these programs are funded should start paying attention to it as soon as possible. by charging a percentage (between 0 and 1 percent) of Despite these significant challenges, e-government telecommunication companies´ revenues. is an unstoppable reality. Arguably it will continue to Leaving the enormous Brazil fund aside, today close grow in Latin America because it has already shown to US$1 billion is available in the bank accounts of these positive impact in the lives of Latin American citizens. universal access funds. It is paradoxical that the region The rankings mentioned are merely an objective keeps losing the information society race partly because mechanism allowing comparison among countries and of its low broadband connectivity at the same time that analysis of their evolution. The relevance lies in what is it sits on these valuable resources, which should be behind the rankings. Behind Colombia´s position are devoted to connectivity-related initiatives. These funds, citizens who, thanks to ICTs, participate more than ever however, will not be nearly enough to close the digital before in the design of public policy. More than 50,000 divide that separates Latin America from the most Colombians participated in the design of the National advanced countries in the world, especially because Educational Plan 2006–15. Uruguay´s position in the those advanced countries continue to pour effort and rankings is the reflection of the satisfaction experienced support into initiatives that promote and expand ICTs. by the parents of the 45,000 newborns per year who For example, last year Australia launched its National can register them electronically immediately after they Broadband Network initiative.24 This country, which has are born, providing them with the right at the center of a smaller surface area than Brazil, plans on investing many human rights—identity. Behind Panama´s rankings US$35 billion (US$8 billion of which will be contributed are entrepreneurs who used to need five days to set up by the private sector) to provide access to broadband a company; now, thanks to PanamaEmprende, they can connection to all Australians by 2015. do it in 15 minutes. An additional challenge—that will grow in importance as e-government advances—is the issue of MOVING FORWARD interoperability,25 both domestic and international. No Two forces will combine to keep pushing the e-government solution can bring efficiency to public advancement of e-government in Latin America. First, administration if it is not interoperable. If a solution people who taste the flavor of the efficiency of the is designed outside an interoperability framework, it online world through the private sector often become will probably need to rely on the ability of the citizen anxious demanders for the same efficiency in their to provide data and documents, even if online, that governments. Many Latin Americans are already enjoying are already in the hands of another section of the the convenience of online purchasing or banking, and government. In most Latin American countries, want their governments to imitate that type of interaction. interoperability is left to the will of the authorities involved Second, all governments face the challenge of attending in any specific public procedure or service. Countries to the needs of a growing population with ever-increasing such as Brazil, Chile, Colombia, and México—although demands under a tight budget that rarely expands. This they have the required infrastructure in place and have situation generates an urgent plea to make the most defined the interoperability standards—are still struggling out of every dollar managed by the government—also to get the necessary commitments from all actors known as efficiency. Every plan to bring efficiency into involved. government will have ICTs as a key supporting tool. The Global Information Technology Report 2013 | 135 @ 2013 World Economic Forum
- 160. 2.3: E-Government in Latin America The Economist. 2003. “The Latinobarómetro Poll: The Stubborn Survival NOTES of Frustrated Democrats.” The Economist, October 30. Available at 1 Hornbeck 2013. http://www.latinobarometro.org/docs/The_Economist_31-10-03. pdf. 2 See www.latinobarometro.org for information about the organization Latinobarómetro and its annual report; see also The Gnius, Juan B. 2012. “Inversión y Regulación: Una Aproximación Economist 2003. Plural.” Santiago de Chile: Signals Consulting. Available at http:// signalsconsultinglatinamerica.blogspot.com/2012/03/inversion-y- 3 Holmes 2001. regulacion-una-aproximacion.html. 4 See http://home.sii.cl/. Guerra, D. 2004. “Dejan sin efecto funciones de la Comisión e-Panamá.” 5 See the Superior Electoral Court website at http://www.tse.jus.br/ La Prensa, September 30. Available at http://mensual.prensa.com/ internet/ingles/index.htm. mensual/contenido/2004/09/30/hoy/negocios/38959.html. 6 Information about these awards can be found on the RED GEALC Holmes, D. 2001. eGov: e-business Strategies for Government. London: website at http://www.redgealc.net/premios-excelgob-2009/ Nicholas Brealey Publishing. content/3711/en/. Hornbeck, J. 2013. Argentina´s Defaulted Sovereign Debt: Dealing 7 The CONPES 3072 document is available at http://www.dnp.gov. with the “Holdouts.” CRS Report for Congress, February 6. co/CONPES.aspx. Congressional Research Service. Available at http://www.fas.org/ sgp/crs/row/R41029.pdf. 8 See http://vivedigital.gov.co/. Oriental Republic of Uruguay. 2011. Uruguay XXI: Promoción de 9 See http://www.mintic.gov.co/index.php/vive-digital/logros. Inversiones y Exportadiones. Montevideo: Oriental Republic of Uruguay. Available at http://www.uruguayxxi.gub.uy/wp-content/ 10 See http://www.mintic.gov.co/index.php/vive-digital/plan/ uploads/2012/07/Outsourcing-Uruguay-XXI-Oct-2011.pdf. preguntas-frecuentes. RED GEALC. excelGOV Awards 2009 catalogue. Montevideo, 11 See RED GEALC’s “Horizontal Cooperation Fund,” available 2009. Available at http://redgealc.org/premios-excelgob-2009/ at http://www.redgealc.net/horizontal-cooperation-fund/ contenido/3711/es/. content/2024/en/. UNDESA (United Nations Department of Economic and Social Affairs). 12 See http://www.agesic.gub.uy/. Various years. e-Government Surveys, 2003–12. New York: United 13 For details of the Agenda Digital Uruguay, see http://www.agesic. Nations Public Administration Network. gub.uy/innovaportal/v/1443/1/agesic/mapa_de_ruta:_agenda_ World Economic Forum. 2006. World Economic Forum. The Global digital_uruguay_2011-2015.html. Information Technology Report 2005–2006: Leveraging ICT for 14 For further information about Plan Ceibal, see http://www.ceibal. Development. Hampshire: Palgrave Macmillan. edu.uy/Paginas/Inicio.aspx. — —. 2007. The Global Information Technology Report 2006–2007: — 15 For details about the meeting, which took place in March, Connecting to the Networked Economy. Hampshire: Palgrave 2009, see http://www.redgealc.org/montevideo-marzo-2009/ Macmillan. contenido/2673/es/. — —. 2008. The Global Information Technology Report 2007–2008: — 16 See http://www.agesic.gub.uy/innovaportal/v/518/1/agesic/ Fostering Innovation through Networked Readiness. Hampshire: plataforma_de_gobierno_electronico_del_estado_uruguayo. Palgrave Macmillan. html?menuderecho=3 for details about the e-Government — —. 2009. The Global Information Technology Report 2008–2009: — Interoperability Platform; see http://www.agesic.gub.uy/ Mobility in a Networked World. Geneva: World Economic Forum. innovaportal/v/504/1/agesic/red_uy.html?menuderecho=3 for details about the REDUY communications infrastructure initiative. — —. 2010. The Global Information Technology Report 2009–2010: ICT — for Sustainability.Geneva: World Economic Forum. 17 Information about CUTI can be found at http://www.cuti.org.uy/. — —. 2011. The Global Information Technology Report 2010–2011: — 18 Oriental Republic of Uruguay 2011. Transformations 2.0. Geneva: World Economic Forum. 19 Guerra 2004. — —. 2012. The Global Information Technology Report 2011–2012: — 20 For details about all these projects, see http://www.innovacion. Living in a Hyperconnected World. Geneva: World Economic gob.pa/proyectos. Forum. 21 See http://www.innovacion.gob.pa/descargas/AIG-PLAN- ESTRATEGICO-2010-2014.pdf. 22 See http://www.mintic.gov.co/index.php/vive-digital/iniciativas. 23 To download The Global Information Technology Report or view and interact with the data platform, see http://reports.weforum. org/global-information-technology-2012/#=. 24 For information about Australia’s Department of Broadband, Communications and the Digital Economy, see http://www.dbcde. gov.au/broadband. 25 A complex and complete definition of interoperability beyond the ICT field can be found at www.wikipedia.org. For the purposes of this chapter, we refer to interoperability as the capacity of applications to communicate and exchange data within and across borders. REFERENCES Cáceres. R. B. 2011. Uso de las Fondos de Acceso Universal de Telecomunicaciones en Países de América Latina y el Caribe. Santiago de Chile: UNECLAC. 136 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 161. Part 3 Country/Economy Profiles @ 2013 World Economic Forum
- 162. @ 2013 World Economic Forum
- 163. How to Read the Country/Economy Profiles The Country/Economy Profiles section presents a profile 3: Country/Economy Profiles for each of the 144 economies covered in The Global Albania Information Technology Report 2013. Each profile Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 83 ..3.8 7 summarizes an economy’s performance in the various 10. Social 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 68 .....3.9 impacts environment 5 A. Environment subindex..............................................84 ....3.8 4 1st pillar: Political and regulatory environment ................. 102 .....3.3 9. Economic 3. Infrastructure and 3 dimensions of the Networked Readiness Index (NRI). impacts digital content 2nd pillar: Business and innovation environment ............... 66 .....4.2 2 B. Readiness subindex .................................................72 ....4.6 1 3rd pillar: Infrastructure and digital content ........................ 79 .....3.6 4th pillar: Affordability ........................................................ 66 .....5.3 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 56 .....5.0 C. Usage subindex ........................................................85 ....3.4 6th pillar: Individual usage.................................................. 84 .....2.9 7. Business 5. Skills 7th pillar: Business usage .................................................. 79 .....3.4 usage PERFORMANCE HIGHLIGHTS 6. Individual usage 8th pillar: Government usage ............................................. 95 .....3.8 D. Impact subindex .......................................................89 ....3.3 Albania Lower-middle-income group average 9th pillar: Economic impacts.............................................. 88 .....3.0 10th pillar: Social impacts .................................................. 81 .....3.5 The first section of the profile presents the economy’s The Networked Readiness Index in detail overall performance in the NRI, along with its 1.01 INDICATOR 1st pillar: Political and regulatory environment RANK /144 Effectiveness of law-making bodies* ..................88 ......... 3.3 VALUE 6.01 INDICATOR 6th pillar: Individual usage RANK /144 Mobile phone subscriptions/100 pop. ................90 ....... 96.4 VALUE performance in the NRI’s four components and ten 1.02 Laws relating to ICTs* ........................................81 ......... 3.7 6.02 Individuals using Internet, %...............................57 ....... 49.0 1.03 Judicial independence* ....................................121 ......... 2.6 6.03 Households w/ personal computer, % ...............95 ....... 15.6 1.04 Efficiency of legal system in settling disputes* ....98 ......... 3.3 6.04 Households w/ Internet access, % ....................85 ....... 13.7 1.05 Efficiency of legal system in challenging regs* ....93 ......... 3.3 6.05 Broadband Internet subscriptions/100 pop. .......83 ......... 4.0 1.06 Intellectual property protection* ........................103 ......... 3.0 6.06 Mobile broadband subscriptions/100 pop..........78 ......... 8.8 pillars. The economy’s rank (out of 144 economies) and 1.07 1.08 1.09 Software piracy rate, % software installed ..........76 .......... 75 No. procedures to enforce a contract ................90 .......... 39 No. days to enforce a contract ..........................25 ........ 390 6.07 Use of virtual social networks* ...........................66 ......... 5.5 7th pillar: Business usage 7.01 Firm-level technology absorption* ......................80 ......... 4.6 score (on a 1-to-7 scale) are reported. 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* ...................................128 ......... 2.4 2.01 Availability of latest technologies* .....................106 ......... 4.4 7.03 PCT patents, applications/million pop. ..............88 ......... 0.2 2.02 Venture capital availability* ...............................132 ......... 1.8 7.04 Business-to-business Internet use* ...................n/a ......... n/a 2.03 Total tax rate, % profits ......................................73 ....... 38.7 7.05 Business-to-consumer Internet use* .................n/a ......... n/a 2.04 No. days to start a business ................................8 ............ 4 7.06 Extent of staff training* .......................................36 ......... 4.4 2.05 No. procedures to start a business ....................20 ............ 4 2.06 Intensity of local competition*...........................128 ......... 3.9 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........57 ....... 43.9 8.01 Importance of ICTs to gov’t vision* .....................70 ......... 4.0 8.02 Government Online Service Index, 0–1 (best).....87 ....... 0.42 On the radar chart to the right of the table, a blue 2.08 Quality of management schools* ........................61 ......... 4.3 2.09 Gov’t procurement of advanced tech* ...............46 ......... 3.9 8.03 Gov’t success in ICT promotion*.......................n/a ......... n/a 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................87 .. 1,648.4 9.01 Impact of ICTs on new services and products* ..93 ......... 4.1 line plots the economy’s score on each of the ten 3.02 Mobile network coverage, % pop ......................51 ....... 99.0 9.02 ICT PCT patents, applications/million pop. .......95 ......... 0.0 3.03 Int’l Internet bandwidth, kb/s per user................65 ....... 19.0 9.03 Impact of ICTss on new organizational models* .90 ......... 3.9 3.04 Secure Internet servers/million pop ....................87 ....... 13.7 9.04 Knowledge-intensive jobs, % workforce............n/a ......... n/a 3.05 Accessibility of digital content* .........................108 ......... 4.2 pillars. The black line represents the average score of all 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ....106 ......... 3.7 4.01 Mobile cellular tariffs, PPP $/min. .....................100 ....... 0.39 10.02 Internet access in schools* ................................54 ......... 4.5 4.02 Fixed broadband Internet tariffs, PPP $/month ..43 ..... 26.37 10.03 ICT use & gov’t efficiency* .................................65 ......... 4.3 10.04 E-Participation Index, 0–1 (best).........................91 ....... 0.11 economies in the income group to which the economy 4.03 Internet & telephony competition, 0–2 (best) ......88 ....... 1.69 5th pillar: Skills 5.01 Quality of educational system* ...........................52 ......... 4.0 5.02 Quality of math & science education* .................40 ......... 4.5 under review belongs. The country classification by Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..63 ....... 90.9 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ..........................................58 ....... 95.9 Country/Economy Profiles” on page 139. income group is defined by the World Bank and reflects 142 | The Global Information Technology Report 2013 the situation as of November 2012. Note that the two high-income groups in this classification, High income: OECD and High income: non-OECD, were merged into a single group for the purpose of the analysis. details on each indicator, including its definition, method of computation, and sources. THE NETWORKED READINESS INDEX IN DETAIL Note that for the sake of readability, the years This section presents an economy’s performance in were omitted. However, the year of each data point is each of the 54 indicators composing the NRI. The indicated in the corresponding data table. For more indicators are organized by pillar. The numbering of information on the framework and computation of the the variables matches that of the data tables in the NRI, refer to Chapter 1.1. next section of the Report, which provide descriptions, rankings, and scores for all the indicators. The indicators ONLINE DATA PORTAL derived from the 2011 and 2012 editions of the World In complement to the analysis presented in this Economic Forum’s Executive Opinion Survey are Report, an online data portal can be accessed via identified by an asterisk (*). These indicators are always www.weforum.org/gitr. The platform offers a number measured on a 1-to-7 scale (where 1 and 7 correspond of analytical tools and visualizations, including sortable to the worst and best possible outcomes, respectively). rankings, scatter plots, bar charts, and maps, as well as For more information on the Executive Opinion Survey the possibility of downloading portions of the NRI dataset. and a detailed explanation of how scores are computed, please refer to Chapter 1.3 of The Global Competitiveness Report 2012–2013, available for free on the World Economic Forum website at www.weforum.org/gcr. For those indicators not derived from the World Economic Forum’s Executive Opinion Survey, the scale is reported next to the title. The section “Technical Notes and Sources” at the end of this Report provides further The Global Information Technology Report 2013 | 139 @ 2013 World Economic Forum
- 164. @ 2013 World Economic Forum
- 165. Index of Country/Economy Profiles Country/Economy Page Country/Economy Page Country/Economy Page Country/Economy Page Albania 142 Egypt 178 Lesotho 214 Romania 250 Algeria 143 El Salvador 179 Liberia 215 Russian Federation 251 Argentina 144 Estonia 180 Libya 216 Rwanda 252 Armenia 145 Ethiopia 181 Lithuania 217 Saudi Arabia 253 Australia 146 Finland 182 Luxembourg 218 Senegal 254 Austria 147 France 183 Macedonia, FYR 219 Serbia 255 Azerbaijan 148 Gabon 184 Madagascar 220 Seychelles 256 Bahrain 149 Gambia, The 185 Malawi 221 Sierra Leone 257 Bangladesh 150 Georgia 186 Malaysia 222 Singapore 258 Barbados 151 Germany 187 Mali 223 Slovak Republic 259 Belgium 152 Ghana 188 Malta 224 Slovenia 260 Benin 153 Greece 189 Mauritania 225 South Africa 261 Bolivia 154 Guatemala 190 Mauritius 226 Spain 262 Bosnia and Herzegovina 155 Guinea 191 Mexico 227 Sri Lanka 263 Botswana 156 Guyana 192 Moldova 228 Suriname 264 Brazil 157 Haiti 193 Mongolia 229 Swaziland 265 Brunei Darussalam 158 Honduras 194 Montenegro 230 Sweden 266 Bulgaria 159 Hong Kong SAR 195 Morocco 231 Switzerland 267 Burkina Faso 160 Hungary 196 Mozambique 232 Taiwan, China 268 Burundi 161 Iceland 197 Namibia 233 Tajikistan 269 Cambodia 162 India 198 Nepal 234 Tanzania 270 Cameroon 163 Indonesia 199 Netherlands 235 Thailand 271 Canada 164 Iran, Islamic Rep. 200 New Zealand 236 Timor-Leste 272 Cape Verde 165 Ireland 201 Nicaragua 237 Trinidad and Tobago 273 Chad 166 Israel 202 Nigeria 238 Turkey 274 Chile 167 Italy 203 Norway 239 Uganda 275 China 168 Jamaica 204 Oman 240 Ukraine 276 Colombia 169 Japan 205 Pakistan 241 United Arab Emirates 277 Costa Rica 170 Jordan 206 Panama 242 United Kingdom 278 Côte d’Ivoire 171 Kazakhstan 207 Paraguay 243 United States 279 Croatia 172 Kenya 208 Peru 244 Uruguay 280 Cyprus 173 Korea, Rep. 209 Philippines 245 Venezuela 281 Czech Republic 174 Kuwait 210 Poland 246 Vietnam 282 Denmark 175 Kyrgyz Republic 211 Portugal 247 Yemen 283 Dominican Republic 176 Latvia 212 Puerto Rico 248 Zambia 284 Ecuador 177 Lebanon 213 Qatar 249 Zimbabwe 285 @ 2013 World Economic Forum
- 166. 3: Country/Economy Profiles Albania Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 83 ..3.8 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 68 .....3.9 impacts environment 5 A. Environment subindex..............................................84 ....3.8 4 1st pillar: Political and regulatory environment ................. 102 .....3.3 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............... 66 .....4.2 2 B. Readiness subindex .................................................72 ....4.6 1 3rd pillar: Infrastructure and digital content ........................ 79 .....3.6 4th pillar: Affordability ........................................................ 66 .....5.3 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 56 .....5.0 C. Usage subindex ........................................................85 ....3.4 6th pillar: Individual usage.................................................. 84 .....2.9 7. Business 5. Skills 7th pillar: Business usage .................................................. 79 .....3.4 usage 6. Individual usage 8th pillar: Government usage ............................................. 95 .....3.8 D. Impact subindex .......................................................89 ....3.3 Albania Lower-middle-income group average 9th pillar: Economic impacts.............................................. 88 .....3.0 10th pillar: Social impacts .................................................. 81 .....3.5 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ..................88 ......... 3.3 6.01 Mobile phone subscriptions/100 pop. ................90 ....... 96.4 1.02 Laws relating to ICTs* ........................................81 ......... 3.7 6.02 Individuals using Internet, %...............................57 ....... 49.0 1.03 Judicial independence* ....................................121 ......... 2.6 6.03 Households w/ personal computer, % ...............95 ....... 15.6 1.04 Efficiency of legal system in settling disputes* ....98 ......... 3.3 6.04 Households w/ Internet access, % ....................85 ....... 13.7 1.05 Efficiency of legal system in challenging regs* ....93 ......... 3.3 6.05 Broadband Internet subscriptions/100 pop. .......83 ......... 4.0 1.06 Intellectual property protection* ........................103 ......... 3.0 6.06 Mobile broadband subscriptions/100 pop..........78 ......... 8.8 1.07 Software piracy rate, % software installed ..........76 .......... 75 6.07 Use of virtual social networks* ...........................66 ......... 5.5 1.08 No. procedures to enforce a contract ................90 .......... 39 1.09 No. days to enforce a contract ..........................25 ........ 390 7th pillar: Business usage 7.01 Firm-level technology absorption* ......................80 ......... 4.6 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* ...................................128 ......... 2.4 2.01 Availability of latest technologies* .....................106 ......... 4.4 7.03 PCT patents, applications/million pop. ..............88 ......... 0.2 2.02 Venture capital availability* ...............................132 ......... 1.8 7.04 Business-to-business Internet use* ...................n/a ......... n/a 2.03 Total tax rate, % profits ......................................73 ....... 38.7 7.05 Business-to-consumer Internet use* .................n/a ......... n/a 2.04 No. days to start a business ................................8 ............ 4 7.06 Extent of staff training* .......................................36 ......... 4.4 2.05 No. procedures to start a business ....................20 ............ 4 2.06 Intensity of local competition*...........................128 ......... 3.9 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........57 ....... 43.9 8.01 Importance of ICTs to gov’t vision* .....................70 ......... 4.0 2.08 Quality of management schools* ........................61 ......... 4.3 8.02 Government Online Service Index, 0–1 (best).....87 ....... 0.42 2.09 Gov’t procurement of advanced tech* ...............46 ......... 3.9 8.03 Gov’t success in ICT promotion*.......................n/a ......... n/a 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................87 .. 1,648.4 9.01 Impact of ICTs on new services and products* ..93 ......... 4.1 3.02 Mobile network coverage, % pop ......................51 ....... 99.0 9.02 ICT PCT patents, applications/million pop. .......95 ......... 0.0 3.03 Int’l Internet bandwidth, kb/s per user................65 ....... 19.0 9.03 Impact of ICTs on new organizational models* ...90 ......... 3.9 3.04 Secure Internet servers/million pop ....................87 ....... 13.7 9.04 Knowledge-intensive jobs, % workforce............n/a ......... n/a 3.05 Accessibility of digital content* .........................108 ......... 4.2 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ....106 ......... 3.7 4.01 Mobile cellular tariffs, PPP $/min. .....................100 ....... 0.39 10.02 Internet access in schools* ................................54 ......... 4.5 4.02 Fixed broadband Internet tariffs, PPP $/month ..43 ..... 26.37 10.03 ICT use & gov’t efficiency* .................................65 ......... 4.3 4.03 Internet & telephony competition, 0–2 (best) ......88 ....... 1.69 10.04 E-Participation Index, 0–1 (best).........................91 ....... 0.11 5th pillar: Skills 5.01 Quality of educational system* ...........................52 ......... 4.0 5.02 Quality of math & science education* .................40 ......... 4.5 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..63 ....... 90.9 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ..........................................58 ....... 95.9 Country/Economy Profiles” on page 139. 142 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 167. 3: Country/Economy Profiles Algeria Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 ............131 ..2.8 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) .................... 118 .....3.0 impacts environment 5 A. Environment subindex............................................143 ....2.6 4 1st pillar: Political and regulatory environment ................. 141 .....2.5 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............. 143 .....2.7 2 B. Readiness subindex .................................................96 ....4.0 1 3rd pillar: Infrastructure and digital content ...................... 119 .....2.6 4th pillar: Affordability ........................................................ 64 .....5.3 8. Government 4. Affordability usage 5th pillar: Skills................................................................. 101 .....4.0 C. Usage subindex ......................................................140 ....2.4 6th pillar: Individual usage................................................ 100 .....2.5 7. Business 5. Skills 7th pillar: Business usage ................................................ 144 .....2.1 usage 6. Individual usage 8th pillar: Government usage ........................................... 139 .....2.7 D. Impact subindex .....................................................142 ....2.1 Algeria Upper-middle-income group average 9th pillar: Economic impacts............................................ 143 .....2.1 10th pillar: Social impacts ................................................ 141 .....2.1 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ................130 ......... 2.4 6.01 Mobile phone subscriptions/100 pop. ................86 ....... 99.0 1.02 Laws relating to ICTs* ......................................140 ......... 2.3 6.02 Individuals using Internet, %.............................110 ....... 14.0 1.03 Judicial independence* ....................................123 ......... 2.5 6.03 Households w/ personal computer, % ...............87 ....... 20.0 1.04 Efficiency of legal system in settling disputes* ..132 ......... 2.6 6.04 Households w/ Internet access, % ....................92 ....... 10.0 1.05 Efficiency of legal system in challenging regs* ..137 ......... 2.5 6.05 Broadband Internet subscriptions/100 pop. .......88 ......... 2.8 1.06 Intellectual property protection* ........................142 ......... 1.8 6.06 Mobile broadband subscriptions/100 pop........126 ......... 0.0 1.07 Software piracy rate, % software installed ..........94 .......... 84 6.07 Use of virtual social networks* ...........................88 ......... 5.2 1.08 No. procedures to enforce a contract ..............129 .......... 45 1.09 No. days to enforce a contract ..........................98 ........ 630 7th pillar: Business usage 7.01 Firm-level technology absorption* ....................144 ......... 3.2 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* ...................................143 ......... 1.9 2.01 Availability of latest technologies* .....................142 ......... 3.4 7.03 PCT patents, applications/million pop. ..............98 ......... 0.1 2.02 Venture capital availability* ...............................138 ......... 1.8 7.04 Business-to-business Internet use* ..................139 ......... 2.7 2.03 Total tax rate, % profits ....................................137 ....... 72.0 7.05 Business-to-consumer Internet use* ................139 ......... 2.4 2.04 No. days to start a business ..............................97 .......... 25 7.06 Extent of staff training* .....................................142 ......... 2.6 2.05 No. procedures to start a business ..................137 .......... 14 2.06 Intensity of local competition*...........................144 ......... 3.1 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........76 ....... 32.1 8.01 Importance of ICTs to gov’t vision* ...................140 ......... 2.6 2.08 Quality of management schools* ......................131 ......... 3.0 8.02 Government Online Service Index, 0–1 (best)...120 ....... 0.25 2.09 Gov’t procurement of advanced tech* .............142 ......... 2.2 8.03 Gov’t success in ICT promotion*......................137 ......... 2.8 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................92 .. 1,223.7 9.01 Impact of ICTs on new services and products* 144 ......... 2.4 3.02 Mobile network coverage, % pop ....................116 ....... 81.5 9.02 ICT PCT patents, applications/million pop. .......82 ......... 0.0 3.03 Int’l Internet bandwidth, kb/s per user................88 ......... 8.9 9.03 Impact of ICTs on new organizational models* .144 ......... 2.1 3.04 Secure Internet servers/million pop ..................128 ......... 0.9 9.04 Knowledge-intensive jobs, % workforce.............76 ....... 19.1 3.05 Accessibility of digital content* .........................137 ......... 3.3 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ....142 ......... 2.6 4.01 Mobile cellular tariffs, PPP $/min. .......................49 ....... 0.20 10.02 Internet access in schools* ..............................132 ......... 2.4 4.02 Fixed broadband Internet tariffs, PPP $/month ..61 ..... 30.23 10.03 ICT use & gov’t efficiency* ...............................144 ......... 2.3 4.03 Internet & telephony competition, 0–2 (best) ....107 ....... 1.31 10.04 E-Participation Index, 0–1 (best).......................106 ....... 0.05 5th pillar: Skills 5.01 Quality of educational system* .........................131 ......... 2.5 5.02 Quality of math & science education* ...............129 ......... 2.7 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..54 ....... 94.9 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ........................................112 ....... 72.6 Country/Economy Profiles” on page 139. The Global Information Technology Report 2013 | 143 @ 2013 World Economic Forum
- 168. 3: Country/Economy Profiles Argentina Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 99 ..3.5 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 92 .....3.5 impacts environment 5 A. Environment subindex............................................126 ....3.2 4 1st pillar: Political and regulatory environment ................. 131 .....2.8 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............. 110 .....3.7 2 B. Readiness subindex .................................................97 ....4.0 1 3rd pillar: Infrastructure and digital content ........................ 70 .....4.0 4th pillar: Affordability ...................................................... 114 .....3.3 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 80 .....4.7 C. Usage subindex ........................................................74 ....3.5 6th pillar: Individual usage.................................................. 60 .....3.9 7. Business 5. Skills 7th pillar: Business usage .................................................. 90 .....3.3 usage 6. Individual usage 8th pillar: Government usage ........................................... 117 .....3.3 D. Impact subindex .......................................................94 ....3.1 Argentina Upper-middle-income group average 9th pillar: Economic impacts.............................................. 91 .....3.0 10th pillar: Social impacts .................................................. 96 .....3.3 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ................141 ......... 2.0 6.01 Mobile phone subscriptions/100 pop. ................26 ..... 134.9 1.02 Laws relating to ICTs* ......................................117 ......... 3.2 6.02 Individuals using Internet, %...............................60 ....... 47.7 1.03 Judicial independence* ....................................133 ......... 2.3 6.03 Households w/ personal computer, % ...............59 ....... 47.0 1.04 Efficiency of legal system in settling disputes* ..129 ......... 2.7 6.04 Households w/ Internet access, % ....................66 ....... 34.0 1.05 Efficiency of legal system in challenging regs* ..142 ......... 2.1 6.05 Broadband Internet subscriptions/100 pop. .......54 ....... 10.5 1.06 Intellectual property protection* ........................134 ......... 2.4 6.06 Mobile broadband subscriptions/100 pop..........72 ....... 11.7 1.07 Software piracy rate, % software installed ..........69 .......... 69 6.07 Use of virtual social networks* ...........................48 ......... 5.8 1.08 No. procedures to enforce a contract ................56 .......... 36 1.09 No. days to enforce a contract ..........................87 ........ 590 7th pillar: Business usage 7.01 Firm-level technology absorption* ....................106 ......... 4.3 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* .....................................95 ......... 2.9 2.01 Availability of latest technologies* .....................109 ......... 4.3 7.03 PCT patents, applications/million pop. ..............66 ......... 1.2 2.02 Venture capital availability* ...............................135 ......... 1.8 7.04 Business-to-business Internet use* ....................84 ......... 4.8 2.03 Total tax rate, % profits ....................................142 ..... 108.3 7.05 Business-to-consumer Internet use* ..................65 ......... 4.6 2.04 No. days to start a business ..............................99 .......... 26 7.06 Extent of staff training* .......................................78 ......... 3.8 2.05 No. procedures to start a business ..................137 .......... 14 2.06 Intensity of local competition*...........................117 ......... 4.1 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........21 ....... 71.2 8.01 Importance of ICTs to gov’t vision* ...................139 ......... 2.6 2.08 Quality of management schools* ........................34 ......... 4.9 8.02 Government Online Service Index, 0–1 (best).....59 ....... 0.53 2.09 Gov’t procurement of advanced tech* .............131 ......... 2.6 8.03 Gov’t success in ICT promotion*......................128 ......... 3.2 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................64 .. 3,041.8 9.01 Impact of ICTs on new services and products* ..94 ......... 4.1 3.02 Mobile network coverage, % pop ......................96 ....... 94.1 9.02 ICT PCT patents, applications/million pop. .......61 ......... 0.3 3.03 Int’l Internet bandwidth, kb/s per user................52 ....... 25.7 9.03 Impact of ICTs on new organizational models* ...78 ......... 4.1 3.04 Secure Internet servers/million pop ....................64 ....... 33.6 9.04 Knowledge-intensive jobs, % workforce.............82 ....... 17.7 3.05 Accessibility of digital content* ...........................86 ......... 4.8 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ....111 ......... 3.6 4.01 Mobile cellular tariffs, PPP $/min. .....................137 ....... 0.86 10.02 Internet access in schools* ................................87 ......... 3.7 4.02 Fixed broadband Internet tariffs, PPP $/month ..87 ..... 37.30 10.03 ICT use & gov’t efficiency* ...............................126 ......... 3.2 4.03 Internet & telephony competition, 0–2 (best) ........1 ....... 2.00 10.04 E-Participation Index, 0–1 (best).........................51 ....... 0.29 5th pillar: Skills 5.01 Quality of educational system* ...........................89 ......... 3.4 5.02 Quality of math & science education* ...............115 ......... 3.1 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..76 ....... 88.5 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ..........................................50 ....... 97.8 Country/Economy Profiles” on page 139. 144 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 169. 3: Country/Economy Profiles Armenia Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 82 ..3.8 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 94 .....3.5 impacts environment 5 A. Environment subindex..............................................90 ....3.7 4 1st pillar: Political and regulatory environment ................. 104 .....3.3 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............... 72 .....4.1 2 B. Readiness subindex .................................................73 ....4.6 1 3rd pillar: Infrastructure and digital content ........................ 72 .....3.9 4th pillar: Affordability ........................................................ 77 .....5.0 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 59 .....4.9 C. Usage subindex ........................................................79 ....3.4 6th pillar: Individual usage.................................................. 77 .....3.1 7. Business 5. Skills 7th pillar: Business usage .................................................. 89 .....3.3 usage 6. Individual usage 8th pillar: Government usage ............................................. 78 .....3.9 D. Impact subindex .......................................................83 ....3.3 Armenia Lower-middle-income group average 9th pillar: Economic impacts.............................................. 69 .....3.3 10th pillar: Social impacts .................................................. 90 .....3.4 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ..................79 ......... 3.4 6.01 Mobile phone subscriptions/100 pop. ................78 ..... 103.6 1.02 Laws relating to ICTs* ........................................50 ......... 4.3 6.02 Individuals using Internet, %...............................83 ....... 32.0 1.03 Judicial independence* ....................................110 ......... 2.8 6.03 Households w/ personal computer, % ...............87 ....... 20.0 1.04 Efficiency of legal system in settling disputes* ....75 ......... 3.6 6.04 Households w/ Internet access, % ....................86 ....... 13.6 1.05 Efficiency of legal system in challenging regs* ....79 ......... 3.5 6.05 Broadband Internet subscriptions/100 pop. .......76 ......... 5.0 1.06 Intellectual property protection* ..........................80 ......... 3.4 6.06 Mobile broadband subscriptions/100 pop..........45 ....... 25.9 1.07 Software piracy rate, % software installed ........100 .......... 88 6.07 Use of virtual social networks* ...........................68 ......... 5.4 1.08 No. procedures to enforce a contract ..............137 .......... 49 1.09 No. days to enforce a contract ..........................49 ........ 440 7th pillar: Business usage 7.01 Firm-level technology absorption* ......................96 ......... 4.4 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* .....................................62 ......... 3.2 2.01 Availability of latest technologies* .....................101 ......... 4.5 7.03 PCT patents, applications/million pop. ..............57 ......... 1.7 2.02 Venture capital availability* .................................89 ......... 2.4 7.04 Business-to-business Internet use* ....................54 ......... 5.2 2.03 Total tax rate, % profits ......................................75 ....... 38.8 7.05 Business-to-consumer Internet use* ..................82 ......... 4.4 2.04 No. days to start a business ..............................34 ............ 8 7.06 Extent of staff training* .......................................98 ......... 3.6 2.05 No. procedures to start a business ....................10 ............ 3 2.06 Intensity of local competition*...........................130 ......... 3.8 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........52 ....... 48.9 8.01 Importance of ICTs to gov’t vision* .....................56 ......... 4.2 2.08 Quality of management schools* ......................127 ......... 3.2 8.02 Government Online Service Index, 0–1 (best)...106 ....... 0.33 2.09 Gov’t procurement of advanced tech* .............108 ......... 3.1 8.03 Gov’t success in ICT promotion*........................52 ......... 4.7 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................85 .. 1,838.3 9.01 Impact of ICTs on new services and products* ..70 ......... 4.4 3.02 Mobile network coverage, % pop ......................72 ....... 98.9 9.02 ICT PCT patents, applications/million pop. .......51 ......... 0.4 3.03 Int’l Internet bandwidth, kb/s per user................58 ....... 22.2 9.03 Impact of ICTs on new organizational models* ...66 ......... 4.2 3.04 Secure Internet servers/million pop ....................67 ....... 27.7 9.04 Knowledge-intensive jobs, % workforce.............56 ....... 24.1 3.05 Accessibility of digital content* ...........................75 ......... 4.9 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ......77 ......... 4.1 4.01 Mobile cellular tariffs, PPP $/min. .......................35 ....... 0.17 10.02 Internet access in schools* ................................78 ......... 3.9 4.02 Fixed broadband Internet tariffs, PPP $/month ..85 ..... 36.93 10.03 ICT use & gov’t efficiency* .................................49 ......... 4.5 4.03 Internet & telephony competition, 0–2 (best) ....115 ....... 1.21 10.04 E-Participation Index, 0–1 (best).......................124 ....... 0.00 5th pillar: Skills 5.01 Quality of educational system* ...........................79 ......... 3.5 5.02 Quality of math & science education* .................71 ......... 4.0 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..74 ....... 88.7 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ..........................................11 ....... 99.6 Country/Economy Profiles” on page 139. The Global Information Technology Report 2013 | 145 @ 2013 World Economic Forum
- 170. 3: Country/Economy Profiles Australia Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 18 ..5.3 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 17 .....5.3 impacts environment 5 A. Environment subindex..............................................11 ....5.3 4 1st pillar: Political and regulatory environment ................... 10 .....5.4 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............... 21 .....5.2 2 B. Readiness subindex .................................................25 ....5.5 1 3rd pillar: Infrastructure and digital content .......................... 6 .....6.8 4th pillar: Affordability ........................................................ 97 .....4.1 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 17 .....5.6 C. Usage subindex ........................................................18 ....5.2 6th pillar: Individual usage.................................................. 15 .....5.9 7. Business 5. Skills 7th pillar: Business usage .................................................. 25 .....4.5 usage 6. Individual usage 8th pillar: Government usage ............................................. 19 .....5.3 D. Impact subindex .......................................................18 ....5.0 Australia High-income group average 9th pillar: Economic impacts.............................................. 20 .....4.6 10th pillar: Social impacts .................................................. 15 .....5.4 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ..................18 ......... 4.9 6.01 Mobile phone subscriptions/100 pop. ................67 ..... 108.3 1.02 Laws relating to ICTs* ........................................17 ......... 5.3 6.02 Individuals using Internet, %...............................18 ....... 79.0 1.03 Judicial independence* ......................................14 ......... 6.0 6.03 Households w/ personal computer, % ...............18 ....... 82.6 1.04 Efficiency of legal system in settling disputes* ....18 ......... 5.0 6.04 Households w/ Internet access, % ....................17 ....... 78.9 1.05 Efficiency of legal system in challenging regs* ....19 ......... 4.7 6.05 Broadband Internet subscriptions/100 pop. .......25 ....... 24.3 1.06 Intellectual property protection* ..........................19 ......... 5.3 6.06 Mobile broadband subscriptions/100 pop..........10 ....... 73.0 1.07 Software piracy rate, % software installed ............5 .......... 23 6.07 Use of virtual social networks* ...........................17 ......... 6.2 1.08 No. procedures to enforce a contract ................12 .......... 28 1.09 No. days to enforce a contract ..........................29 ........ 395 7th pillar: Business usage 7.01 Firm-level technology absorption* ......................15 ......... 5.9 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* .....................................32 ......... 3.9 2.01 Availability of latest technologies* .......................19 ......... 6.2 7.03 PCT patents, applications/million pop. ..............20 ....... 77.5 2.02 Venture capital availability* .................................28 ......... 3.3 7.04 Business-to-business Internet use* ....................31 ......... 5.6 2.03 Total tax rate, % profits ....................................107 ....... 47.5 7.05 Business-to-consumer Internet use* ....................9 ......... 5.8 2.04 No. days to start a business ................................2 ............ 2 7.06 Extent of staff training* .......................................28 ......... 4.6 2.05 No. procedures to start a business ......................3 ............ 2 2.06 Intensity of local competition*...............................6 ......... 5.9 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........10 ....... 79.9 8.01 Importance of ICTs to gov’t vision* .....................26 ......... 4.7 2.08 Quality of management schools* ........................16 ......... 5.3 8.02 Government Online Service Index, 0–1 (best).......9 ....... 0.86 2.09 Gov’t procurement of advanced tech* ...............58 ......... 3.7 8.03 Gov’t success in ICT promotion*........................39 ......... 4.8 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................10 11,488.7 9.01 Impact of ICTs on new services and products* ..28 ......... 5.1 3.02 Mobile network coverage, % pop ......................51 ....... 99.0 9.02 ICT PCT patents, applications/million pop. .......19 ....... 20.7 3.03 Int’l Internet bandwidth, kb/s per user................32 ....... 50.4 9.03 Impact of ICTs on new organizational models* ...28 ......... 4.9 3.04 Secure Internet servers/million pop ......................6 .. 2,002.6 9.04 Knowledge-intensive jobs, % workforce.............12 ....... 42.9 3.05 Accessibility of digital content* ...........................20 ......... 6.1 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ......23 ......... 5.4 4.01 Mobile cellular tariffs, PPP $/min. .....................121 ....... 0.54 10.02 Internet access in schools* ................................12 ......... 6.1 4.02 Fixed broadband Internet tariffs, PPP $/month ..94 ..... 40.24 10.03 ICT use & gov’t efficiency* .................................46 ......... 4.6 4.03 Internet & telephony competition, 0–2 (best) ......63 ....... 1.91 10.04 E-Participation Index, 0–1 (best)...........................8 ....... 0.76 5th pillar: Skills 5.01 Quality of educational system* ...........................15 ......... 5.0 5.02 Quality of math & science education* .................24 ......... 4.9 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ....1 ..... 131.3 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ..........................................15 ....... 99.0 Country/Economy Profiles” on page 139. 146 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 171. 3: Country/Economy Profiles Austria Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 19 ..5.2 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 19 .....5.3 impacts environment 5 A. Environment subindex..............................................22 ....5.0 4 1st pillar: Political and regulatory environment ................... 17 .....5.2 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............... 31 .....4.8 2 B. Readiness subindex ...................................................9 ....6.0 1 3rd pillar: Infrastructure and digital content .......................... 9 .....6.6 4th pillar: Affordability ........................................................ 37 .....5.9 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 24 .....5.6 C. Usage subindex ........................................................17 ....5.2 6th pillar: Individual usage.................................................. 19 .....5.7 7. Business 5. Skills 7th pillar: Business usage .................................................... 9 .....5.4 usage 6. Individual usage 8th pillar: Government usage ............................................. 35 .....4.6 D. Impact subindex .......................................................24 ....4.8 Austria High-income group average 9th pillar: Economic impacts.............................................. 22 .....4.6 10th pillar: Social impacts .................................................. 29 .....5.0 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ..................37 ......... 4.2 6.01 Mobile phone subscriptions/100 pop. ................13 ..... 154.8 1.02 Laws relating to ICTs* ........................................21 ......... 5.2 6.02 Individuals using Internet, %...............................15 ....... 79.8 1.03 Judicial independence* ......................................30 ......... 5.2 6.03 Households w/ personal computer, % ...............25 ....... 78.1 1.04 Efficiency of legal system in settling disputes* ....25 ......... 4.8 6.04 Households w/ Internet access, % ....................24 ....... 75.4 1.05 Efficiency of legal system in challenging regs* ....22 ......... 4.6 6.05 Broadband Internet subscriptions/100 pop. .......21 ....... 25.4 1.06 Intellectual property protection* ..........................16 ......... 5.5 6.06 Mobile broadband subscriptions/100 pop..........23 ....... 42.6 1.07 Software piracy rate, % software installed ............5 .......... 23 6.07 Use of virtual social networks* ...........................20 ......... 6.2 1.08 No. procedures to enforce a contract ..................4 .......... 25 1.09 No. days to enforce a contract ..........................31 ........ 397 7th pillar: Business usage 7.01 Firm-level technology absorption* ......................13 ......... 5.9 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* .......................................9 ......... 5.0 2.01 Availability of latest technologies* .......................13 ......... 6.3 7.03 PCT patents, applications/million pop. ..............10 ..... 154.7 2.02 Venture capital availability* .................................39 ......... 3.0 7.04 Business-to-business Internet use* ......................3 ......... 6.2 2.03 Total tax rate, % profits ....................................120 ....... 53.1 7.05 Business-to-consumer Internet use* ..................16 ......... 5.6 2.04 No. days to start a business ..............................97 .......... 25 7.06 Extent of staff training* .......................................12 ......... 5.0 2.05 No. procedures to start a business ....................88 ............ 8 2.06 Intensity of local competition*...............................7 ......... 5.8 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........23 ....... 68.2 8.01 Importance of ICTs to gov’t vision* .....................77 ......... 3.9 2.08 Quality of management schools* ........................37 ......... 4.8 8.02 Government Online Service Index, 0–1 (best).....26 ....... 0.75 2.09 Gov’t procurement of advanced tech* ...............50 ......... 3.8 8.03 Gov’t success in ICT promotion*........................58 ......... 4.6 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................25 .. 7,987.8 9.01 Impact of ICTs on new services and products* ..33 ......... 5.0 3.02 Mobile network coverage, % pop ......................51 ....... 99.0 9.02 ICT PCT patents, applications/million pop. .......14 ....... 30.3 3.03 Int’l Internet bandwidth, kb/s per user................19 ....... 81.9 9.03 Impact of ICTs on new organizational models* ...49 ......... 4.5 3.04 Secure Internet servers/million pop ....................20 ..... 993.2 9.04 Knowledge-intensive jobs, % workforce.............27 ....... 36.7 3.05 Accessibility of digital content* .............................9 ......... 6.3 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ......18 ......... 5.6 4.01 Mobile cellular tariffs, PPP $/min. .......................15 ....... 0.08 10.02 Internet access in schools* ................................25 ......... 5.7 4.02 Fixed broadband Internet tariffs, PPP $/month ..78 ..... 35.33 10.03 ICT use & gov’t efficiency* .................................14 ......... 5.3 4.03 Internet & telephony competition, 0–2 (best) ........1 ....... 2.00 10.04 E-Participation Index, 0–1 (best).........................41 ....... 0.37 5th pillar: Skills 5.01 Quality of educational system* ...........................26 ......... 4.7 5.02 Quality of math & science education* .................43 ......... 4.4 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..40 ....... 98.9 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ..........................................15 ....... 99.0 Country/Economy Profiles” on page 139. The Global Information Technology Report 2013 | 147 @ 2013 World Economic Forum
- 172. 3: Country/Economy Profiles Azerbaijan Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 56 ..4.1 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 61 .....3.9 impacts environment 5 A. Environment subindex..............................................77 ....3.8 4 1st pillar: Political and regulatory environment ................... 66 .....3.7 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............... 86 .....4.0 2 B. Readiness subindex .................................................51 ....5.0 1 3rd pillar: Infrastructure and digital content ........................ 75 .....3.8 4th pillar: Affordability ........................................................ 20 .....6.2 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 57 .....5.0 C. Usage subindex ........................................................52 ....4.0 6th pillar: Individual usage.................................................. 64 .....3.7 7. Business 5. Skills 7th pillar: Business usage .................................................. 58 .....3.6 usage 6. Individual usage 8th pillar: Government usage ............................................. 34 .....4.7 D. Impact subindex .......................................................59 ....3.6 Azerbaijan Upper-middle-income group average 9th pillar: Economic impacts.............................................. 59 .....3.4 10th pillar: Social impacts .................................................. 57 .....3.9 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ..................59 ......... 3.8 6.01 Mobile phone subscriptions/100 pop. ................64 ..... 108.7 1.02 Laws relating to ICTs* ........................................46 ......... 4.4 6.02 Individuals using Internet, %...............................56 ....... 50.0 1.03 Judicial independence* ......................................86 ......... 3.4 6.03 Households w/ personal computer, % ...............86 ....... 21.5 1.04 Efficiency of legal system in settling disputes* ....76 ......... 3.6 6.04 Households w/ Internet access, % ....................62 ....... 35.3 1.05 Efficiency of legal system in challenging regs* ....58 ......... 3.9 6.05 Broadband Internet subscriptions/100 pop. .......53 ....... 10.7 1.06 Intellectual property protection* ..........................53 ......... 3.9 6.06 Mobile broadband subscriptions/100 pop..........50 ....... 21.5 1.07 Software piracy rate, % software installed ..........99 .......... 87 6.07 Use of virtual social networks* ...........................41 ......... 5.9 1.08 No. procedures to enforce a contract ................90 .......... 39 1.09 No. days to enforce a contract ............................5 ........ 237 7th pillar: Business usage 7.01 Firm-level technology absorption* ......................73 ......... 4.7 2nd pillar: Business and innovation environment 7.02 Capacity for innovation* .....................................39 ......... 3.5 2.01 Availability of latest technologies* .......................81 ......... 4.8 7.03 PCT patents, applications/million pop. ..............77 ......... 0.4 2.02 Venture capital availability* .................................59 ......... 2.8 7.04 Business-to-business Internet use* ....................78 ......... 4.8 2.03 Total tax rate, % profits ......................................77 ....... 40.0 7.05 Business-to-consumer Internet use* ..................77 ......... 4.4 2.04 No. days to start a business ..............................34 ............ 8 7.06 Extent of staff training* .......................................56 ......... 4.1 2.05 No. procedures to start a business ....................48 ............ 6 2.06 Intensity of local competition*...........................131 ......... 3.8 8th pillar: Government usage 2.07 Tertiary education gross enrollment rate, %........92 ....... 19.3 8.01 Importance of ICTs to gov’t vision* .......................9 ......... 5.4 2.08 Quality of management schools* ......................123 ......... 3.3 8.02 Government Online Service Index, 0–1 (best).....97 ....... 0.37 2.09 Gov’t procurement of advanced tech* ...............19 ......... 4.4 8.03 Gov’t success in ICT promotion*..........................8 ......... 5.6 3rd pillar: Infrastructure and digital content 9th pillar: Economic impacts 3.01 Electricity production, kWh/capita ......................79 .. 2,108.9 9.01 Impact of ICTs on new services and products* ..41 ......... 4.9 3.02 Mobile network coverage, % pop ........................1 ..... 100.0 9.02 ICT PCT patents, applications/million pop. .......95 ......... 0.0 3.03 Int’l Internet bandwidth, kb/s per user................64 ....... 19.1 9.03 Impact of ICTs on new organizational models* ...39 ......... 4.6 3.04 Secure Internet servers/million pop ..................100 ......... 4.7 9.04 Knowledge-intensive jobs, % workforce.............69 ....... 20.3 3.05 Accessibility of digital content* ...........................71 ......... 5.0 10th pillar: Social impacts 4th pillar: Affordability 10.01 Impact of ICTs on access to basic services* ......37 ......... 4.9 4.01 Mobile cellular tariffs, PPP $/min. .......................28 ....... 0.15 10.02 Internet access in schools* ................................79 ......... 3.9 4.02 Fixed broadband Internet tariffs, PPP $/month ..16 ..... 18.55 10.03 ICT use & gov’t efficiency* .................................19 ......... 5.2 4.03 Internet & telephony competition, 0–2 (best) ....104 ....... 1.35 10.04 E-Participation Index, 0–1 (best).........................81 ....... 0.13 5th pillar: Skills 5.01 Quality of educational system* .........................109 ......... 3.1 5.02 Quality of math & science education* .................99 ......... 3.5 Note: Indicators followed by an asterisk (*) are measured on a 1-to-7 (best) scale. For 5.03 Secondary education gross enrollment rate, % ..48 ....... 96.9 further details and explanation, please refer to the section “How to Read the 5.04 Adult literacy rate, % ............................................3 ....... 99.8 Country/Economy Profiles” on page 139. 148 | The Global Information Technology Report 2013 @ 2013 World Economic Forum
- 173. 3: Country/Economy Profiles Bahrain Rank Score (out of 144) (1–7) 1. Political and regulatory environment Networked Readiness Index 2013 .............. 29 ..4.8 10. Social 7 2. Business and innovation 6 Networked Readiness Index 2012 (out of 142) ...................... 27 .....4.9 impacts environment 5 A. Environment subindex..............................................28 ....4.8 4 1st pillar: Political and regulatory environment ................... 40 .....4.4 9. Economic 3. Infrastructure and 3 impacts digital content 2nd pillar: Business and innovation environment ............... 14 .....5.3 2 B. Readiness subindex .................................................35 ....5.3 1 3rd pillar: Infrastructure and digital content ........................ 39 .....5.0 4th pillar: Affordability ........................................................ 46 .....5.6 8. Government 4. Affordability usage 5th pillar: Skills................................................................... 44 .....5.2 C. Usage subindex ........................................................30 ....4.8 6th pillar: Individual usage.................................................. 30 .....5.1 7. Business 5. Skills 7th pillar: Business usage .................................................. 56 .....3.6 usage 6. Individual usage 8th pillar: Government usage ............................................... 4 .....5.8 D. Impact subindex .......................................................32 ....4.4 Bahrain High-income group average 9th pillar: Economic impacts.............................................. 52 .....3.4 10th pillar: Social impacts .................................................. 16 .....5.4 The Networked Readiness Index in detail INDICATOR RANK /144 VALUE INDICATOR RANK /144 VALUE 1st pillar: Political and regulatory environment 6th pillar: Individual usage 1.01 Effectiveness of law-making bodies* ..................47 ......... 4.0 6.01 Mobile phone subscriptions/100 pop. ................34 ..... 128.0 1.02 Laws relating to ICTs* ..............