India Ranks High In Digital Evolution In 2020

By Lee Kah Whye

Rapidly digitalising India was ranked highly among “Break Out Economies” in the third edition of the Digital Evolution Scorecard developed by Tufts University’s Fletcher School in partnership with Mastercard.

Third rank Indonesia, and India, which ranks number four in momentum, have displayed increasing digital momentum suggesting the potential to rapidly digitalise for both post-COVID economic recovery and longer-term transformation.

China which leads the countries in the “Break Out Economies” group is more evolved digitally due mainly to its combination of rapidly growing demand and innovation.

“Break Out Economies” are those that are digitalising very quickly and yet have a lot of room to grow before matching those in the developed economies, such as those in Europe and in more developed Asian countries like Singapore, South Korea, and Hong Kong.

Successful “Break Out Economies” are those that have prioritised improving mobile internet access, affordability, and quality to foster more widespread adoption. The governments of these economies have also taken steps to strengthen institutional environments and developed digital regulations. Furthermore, importance is placed in generating investments in digital enterprises, funding digital R&D, training digital talent, and leveraging digital applications to create jobs. Steps have also been taken to reduce inequities in access to digital tools across gender, class, ethnicity, and geographic boundaries.

For “Break Out Economies”, mobile Internet access has been a strong driver of momentum, and also the fastest way for getting the third of the global population that doesn’t yet have internet connectivity online. India which doubled its internet connectivity in the last four years being the best example. The country is on track to add 350 million smartphones by 2023.

However, the report suggested that mobile phones are merely the first step in unlocking the benefits of digitalisation. The current health crisis is highlighting how both top-notch access and proper tools are important parts of economic resilience in a time of heavy reliance on digital technologies. “For example, when the pandemic shut down in-person schooling in India, many children had to resort to WhatsApp to communicate with their teachers. Although the messaging app was certainly better than nothing, the limited growth of India’s digital ecosystem beyond mobile phones created major inequalities in access to essential education,” the report continued.

While investing in mobile is a great first step for economies with limited existing digital infrastructure, the authors of the study suggested that policymakers should endeavour to expand their gaze beyond simply increasing the number of mobile devices, recognising that longer-term growth will depend on the quality of internet access, the devices, and the overall consumer experience.

Published in the Harvard Business Review in December last year, the study was conducted during the ongoing COVID-19 outbreak which caused global economic growth to shrink by 4.4 percent in 2020. Due to lockdowns and safe distancing measures, the pandemic has accelerated the digitalisation trend around the world. With repeated lockdowns in many countries, shuttered offices, school closures and the restrictions imposed on retail and dining outlets, digital capabilities have come to the fore. With people forced to work from home, school remotely and shop online, the pandemic has highlighted the importance of digital capabilities in ensuring a country’s growth and economic resilience.

The objective of the study was to help governments, businesses and investors understand what they need to emerge ahead of the competition. To do this, the researchers analysed 90 economies based on a combination of 160 indicators across four supply key drivers: Supply Conditions, Demand Conditions, Institutional Environment, and Innovation and Change. A combination of proprietary and public data from more than 45 different databases, as well as analyses conducted by the Fletcher School’s Digital Planet team was used to explore key questions across the core subject areas.

South Korea, Singapore and Hong Kong emerged as the leading”Stand Out Economies”, the top performing group, in the study. Characteristics that made these economies the benchmark are both a high degree of digital evolution as well as strong momentum in continuing to advance their digital capabilities. Other consistently top performers in the index in this group include Estonia, Taiwan, and the United Arab Emirates. These economies have all displayed both adaptability and institutional-led support for innovation. Interestingly, the US also shows remarkable momentum for an economy of its size and complexity, scoring second in digital evolution after Singapore.

Successful “Stand Out Economies” prioritised among other things expanding adoption of digital consumer tools (for example, e-commerce, digital payments, entertainment), attracting, training, and retaining digital talent, fostering digital entrepreneurial ventures, and providing fast, universal, terrestrial (for example, fibre optics) and mobile broadband internet access. They are also specialists in the export of digital goods, services, or media. In addition, innovation is coordinated between universities, businesses, and digital authorities.

The remaining two categories of economies are the “Stall Out Economies” and the “Watch Out Economies”.

“Stall Out Economies” consists of mostly EU economies with matured digital landscapes which are exhibiting less momentum for continued advancement. This may be because of the natural slowing of growth that accompanies maturity and deliberate slowing to ensure they grow responsibly and inclusively.

“Watch Out Economies” are those that are behind in both digital capabilities as well as momentum for future development. Economies in this category include those in Africa, Latin America, Southern Europe, and some parts of Asia.

In conclusion, the authors of the study cautioned that “there is no one-size-fits-all solutions to digital evolution. Every country is unique, and the factors that enable one economy to succeed are far from certain to work in another.”

“But despite these limitations, the 2020 Digital Evolution Scorecard can still offer clarity around the current state of both digital development and digital momentum around the world — as well as the impact of that digital evolution on countries’ responses to the pandemic. Insight into how the nations of the world have fared (and what policy choices helped them get where they are) is the first step for anyone interested in fostering digital growth and economic resilience — in their own community and around the globe.” (ANI)

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