The World’s Most and Least Digital Countries

31st Jul 2017

Last week, we wrote a post titled Digital Transformation: Leaders and Laggards – discussing which industries have completely embraced digital transformation and which ones are yet to realize its full potential. Continuing the trend, in this post, we will discuss the countries which are leading the digital transformation journey and the countries which are trailing behind.

Countries

The Most Digital Countries

Anyone who has visited the tiny country will not be surprised that Singapore, with its unique blend of competitive capitalism and involved government, tops the networking rankings. Its highly skilled population and large financial sector certainly played a role, but governmental commitment to the development of the internet was arguably the most significant factor that led to its current state of connectivity. This includes a strong drive to make government services accessible digitally; an aspect of e-commerce that is often downplayed.

The three next most connected countries happen to be neighbors: Finland, Sweden and Norway. All of these Scandinavian countries have a somewhat socialist outlook on the role of government in society and business, coupled with a tradition of innovation, excellent education and a high level of financial sophistication. The United States, unsurprisingly, places well in fifth place, boasting a very favorable business environment, a willingness to invest in new ideas and an enormous technology sector.

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The rest of the countries making the top ten are, as expected, those with high GDP per capita figures, a strong interest in international trade and well-developed financial systems. These are, in order, the Netherlands, Switzerland, the United Kingdom, Luxembourg and Japan.

Of course, it is important to consider not only where various countries are in terms of digitization, but also where they’re going. Various non-First World countries are increasing connectivity at an impressive rate, Malaysia, Russia, China and the United Arab Emirates being good examples. By contrast, many countries that already enjoy the benefits of a digital economy, such as South Korea, Denmark, Ireland and Canada, don’t seem to be poised for further development in the near future.

A few countries that are somewhat late to the party, on the other hand, have both a currently inadequate level of connectivity and the willingness to make up the difference. Online companies looking for untapped markets as well as investors in the ICT environment would do well to look closely at places such as Mexico, the Philippines, Bolivia and Kenya.

What the Future Holds

Will the future of digital connectivity be a case of the rich getting richer and the poor falling behind? Although such broad predictions are essentially impossible, the short answer seems to be “no”. The force multiplier effect of better connectivity on economic activity at every level is certainly now recognized by every government, as is the market potential by telecoms companies with their eye on foreign expansion.

Developing countries that realize the value of a new technology are often able to skip an entire generation of infrastructure investment, lowering the total cost of joining the digital economy. As an example, many African countries not only did not have to overhaul their cell phone networks from an analog architecture to 2G and later protocols, but often saw widespread market adoption of mobile technologies even before landline networks had been well developed. It is to be hoped that these countries can somehow play catch-up in the years to come and take advantage of opportunities such as better procurement, increased employment and more efficient service delivery made possible by the internet.

However, the most digitally developed countries are likely to hold onto their lead to some extent. Technology rarely stands still, and as emerging fields like robotics, location-based technologies that tie the digital and physical worlds together, artificial intelligence and big data start coming into their own over the next few years, it is to be expected that those countries with the most supportive government frameworks, the most innovative companies and the most sophisticated investment practices are likely to benefit disproportionately.