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Global IT Report 2012

Global IT Report 2012

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Insight Report

The Global Information
Technology Report 2012

Living in a Hyperconnected World

Soumitra Dutta and Beñat Bilbao-Osorio, editors

© 2012 World Economic Forum

© 2012 World Economic Forum

© 2012 World Economic Forum

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© 2012 World Economic Forum

The Networked
Readiness Index
Rankings

© 2012 World Economic Forum

© 2012 World Economic Forum

The Global Information Technology Report 2012 | xxiii

The Networked Readiness Index Rankings

The Networked Readiness Index 2012

Rank

Country/Economy

Score

1

Sweden

5.94

2

Singapore

5.86

3

Finland

5.81

4

Denmark

5.70

5

Switzerland

5.61

6

Netherlands

5.60

7

Norway

5.59

8

United States

5.56

9

Canada

5.51

10

United Kingdom

5.50

11

Taiwan, China

5.48

12

Korea, Rep.

5.47

13

Hong Kong SAR

5.46

14

New Zealand

5.36

15

Iceland

5.33

16

Germany

5.32

17

Australia

5.29

18

Japan

5.25

19

Austria

5.25

20

Israel

5.24

21

Luxembourg

5.22

22

Belgium

5.13

23

France

5.12

24

Estonia

5.09

25

Ireland

5.02

26

Malta

4.91

27

Bahrain

4.90

28

Qatar

4.81

29

Malaysia

4.80

30

United Arab Emirates

4.77

31

Lithuania

4.66

32

Cyprus

4.66

33

Portugal

4.63

34

Saudi Arabia

4.62

35

Barbados

4.61

36

Puerto Rico

4.59

37

Slovenia

4.58

38

Spain

4.54

39

Chile

4.44

40

Oman

4.35

41

Latvia

4.35

42

Czech Republic

4.33

43

Hungary

4.30

44

Uruguay

4.28

45

Croatia

4.22

46

Montenegro

4.22

47

Jordan

4.17

48

Italy

4.17

49

Poland

4.16

50

Tunisia

4.12

51

China

4.11

52

Turkey

4.07

53

Mauritius

4.06

54

Brunei Darussalam

4.04

55

Kazakhstan

4.03

56

Russian Federation

4.02

57

Panama

4.01

58

Costa Rica

4.00

59

Greece

3.99

60

Trinidad and Tobago

3.98

61

Azerbaijan

3.95

62

Kuwait

3.95

63

Mongolia

3.95

64

Slovak Republic

3.94

65

Brazil

3.92

66

Macedonia, FYR

3.91

67

Romania

3.90

68

Albania

3.89

69

India

3.89

70

Bulgaria

3.89

71

Sri Lanka

3.88

Rank

Country/Economy

Score

72

South Africa

3.87

73

Colombia

3.87

74

Jamaica

3.86

75

Ukraine

3.85

76

Mexico

3.82

77

Thailand

3.78

78

Moldova

3.78

79

Egypt

3.77

80

Indonesia

3.75

81

Cape Verde

3.71

82

Rwanda

3.70

83

Vietnam

3.70

84

Bosnia and Herzegovina

3.65

85

Serbia

3.64

86

Philippines

3.64

87

Dominican Republic

3.60

88

Georgia

3.60

89

Botswana

3.58

90

Guyana

3.58

91

Morocco

3.56

92

Argentina

3.52

93

Kenya

3.51

94

Armenia

3.49

95

Lebanon

3.49

96

Ecuador

3.46

97

Ghana

3.44

98

Guatemala

3.43

99

Honduras

3.43

100

Senegal

3.42

101

Gambia, The

3.41

102

Pakistan

3.39

103

El Salvador

3.38

104

Iran, Islamic Rep.

3.36

105

Namibia

3.35

106

Peru

3.34

107

Venezuela

3.32

108

Cambodia

3.32

109

Zambia

3.26

110

Uganda

3.25

111

Paraguay

3.25

112

Nigeria

3.22

113

Bangladesh

3.20

114

Tajikistan

3.19

115

Kyrgyz Republic

3.13

116

Malawi

3.05

117

Benin

3.05

118

Algeria

3.01

119

Belize

3.01

120

Mozambique

2.99

121

Suriname

2.99

122

Côte d’Ivoire

2.98

123

Tanzania

2.95

124

Zimbabwe

2.94

125

Cameroon

2.93

126

Mali

2.93

127

Bolivia

2.92

128

Nepal

2.92

129

Syria

2.85

130

Ethiopia

2.85

131

Nicaragua

2.84

132

Timor-Leste

2.84

133

Lesotho

2.78

134

Madagascar

2.73

135

Burkina Faso

2.72

136

Swaziland

2.70

137

Burundi

2.57

138

Chad

2.55

139

Mauritania

2.55

140

Angola

2.49

141

Yemen

2.41

142

Haiti

2.27

© 2012 World Economic Forum

© 2012 World Economic Forum

Part 1

The Current Networked
Readiness Describing a
Hyperconnected World

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The Global Information Technology Report 2012 | 7

1.1: The Networked Readiness Index 2012

capable of developing and absorbing new knowl-
edge; and an ICT-friendly government policy.

ELEMENTS OF THE NETWORKED READINESS INDEX

The networked readiness framework translates into the

NRI, comprising four subindexes that measure the en-

vironment for ICT; the readiness of a society to use ICT;

the actual usage of all main stakeholders; and, finally, the

impacts that ICT generates in the economy and society.

The three first subindexes can be regarded as the driv-

ers that condition the results of the fourth subindex—that

is, ICT impacts. These four subindexes are divided into

10 pillars and 53 variables according to the following

structure (see also Figure 2):

A. Environment subindex

1. Political and regulatory environment
2. Business and innovation environment

B. Readiness subindex

3. Infrastructure and digital content
4. Affordability
5. Skills

C. Usage subindex

6. Individual usage
7. Business usage
8. Government usage

D. Impact subindex

9. Economic impacts
10. Social impacts

The final NRI score is a simple average of the four

composing subindex scores, while each subindex’s

score is a simple average of those of the composing

pillars. In doing this, we assume that all Index subindexes

give a similar contribution to national networked readi-

ness. Appendix A at the end of this chapter includes

detailed information on the composition and computa-

tion of the NRI 2012.

A brief description of the different composing ele-

ments (at the subindex and pillar level) follows.

Environment subindex

The environment subindex gauges the friendliness of

a country’s market and regulatory framework in sup-

porting high levels of ICT uptake and the development

of entrepreneurship and innovation-prone conditions. A

supportive environment is necessary to maximize the

potential impacts of ICT in boosting competitiveness and

well-being. It includes a total of 18 variables distributed

into two pillars.

The political and regulatory environment pillar (nine

variables) assesses the extent to which the national legal

framework facilitates ICT penetration and the safe devel-

opment of business activities, taking into account gen-

eral features of the regulatory environment (including the

protection afforded to property rights, the independence

of the judiciary, and the efficiency of the law-making

process) as well as more ICT-specific dimensions (the

passing of laws relating ICT and software piracy rates).

The business and innovation environment pillar (nine

variables) gauges the quality of the business framework

conditions to boost entrepreneurship, taking into ac-

count dimensions related to the ease of doing business

(including the presence of red tape and excessive fis-

cal charges). This pillar also measures the presence of

conditions that allow innovation to flourish by including

variables on the overall availability of technology, the

demand conditions for innovative products (as proxied

by the development of government procurement of

advanced technology products), the availability of venture

capital for financing innovation-related projects, and the

presence of a skillful labor force.

Readiness subindex

The readiness subindex, with a total of 12 variables,

measures the degree to which a society is prepared to

make good use of an affordable ICT infrastructure and

digital content.

The infrastructure and digital content pillar (five

variables) captures the development of ICT infrastructure

(including the mobile network coverage, international

Internet bandwidth, secure Internet servers, and elec-

tricity production) as well as the accessibility of digital

content.

The affordability pillar (three variables) assesses the

cost of accessing ICT, either via mobile telephony or

fixed broadband Internet, as well as the level of competi-

tion in the Internet and telephony sectors that determine

this cost.

The skills pillar (four variables) gauges the ability of a

society to make effective use of ICT thanks to the exis-

tence of basic educational skills captured by the quality

of the educational system, the level of adult literacy, and

the rate of secondary education enrollment.

Usage subindex

The usage subindex assesses the individual efforts of

the main social agents—that is, individuals, business,

and government—to increase their capacity to use ICT,

as well as their actual use in their day-to-day activities

with other agents. It includes 15 variables.

The individual usage pillar (seven variables) mea-

sures ICT penetration and diffusion at the individual level,

using indicators such as the number of mobile phone

subscriptions, individuals using the Internet, households

with a personal computer (PC), households with Internet

access, both fixed and mobile broadband subscriptions,

and the use of social networks.

The business usage pillar (five variables) captures

the extent of business Internet use as well as the efforts

of the firms in an economy to integrate ICT into an inter-

nal, technology-savvy, innovation-conducive environment

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Command execution •

Document-based •

Transaction-based •

Data security •

People adapting •

Structured data •

Real-time video •

Consistent mobile •

Content •

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• Introduce access fees

• Bundles

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1.11: Maximizing the Impact of Digitization

The Global Information Technology Report 2012 | 129

services, while better e-government services stimulate

an increase in digitization.

Finally, digitization supports better delivery of basic

government services, such as public education. As previ-

ously noted, digitization’s impact on the human develop-

ment indexes and subindexes is more pronounced in the

case of developing countries, and a 10-point increase in

digitization results in an approximately 0.17-point increase

in the Inequality-Adjusted Education Index. However, this

trend is projected to level out in developed countries that

have access to such basic services.

Summary

Overall, our analysis indicates that digitization clearly

has a positive impact on economic advancement, so-

cial well-being, and government effectiveness, although

this impact varies according to a country’s level of digi-

tization. Digitization has an increasing impact on the

economy and quality of life as countries advance through

the stages of digitization, and more impact on access to

basic services and education in countries that are just

beginning their journey (see Table 1).

KEY POLICY IMPERATIVES

The digitization index and analysis will be an invaluable

tool for countries to understand their current level of

digitization and how to build on it.

In recent years, both developing and developed

countries have invested significantly in broadband infra-

structure, ensuring that their citizens have high-speed

access to the Internet and communications services. But

this investment is not enough. We studied the countries

that have made rapid advances through the four stages

of digitization to see what measures and policies contrib-

uted to their progress and found that policymakers can

play a pivotal role by focusing on five key imperatives.

These imperatives are critical for all countries—both

the mature economies that have reached the advanced

stage of digitization, and the developing economies that

fall primarily into the constrained, emerging, and transi-

tional stages of digitization. They are:

Elevate digitization on the national agenda:

Ensure that national policy and senior government
stewardship provide the platform for progress; cre-
ate a plan for digitization that is tracked and moni-
tored, with accountability residing at senior levels of
government.

Evolve sector governance: Segregate regula-
tory and policy roles; clarify both ownership and
accountability for ICT and digitization.

Adopt an ecosystem philosophy: Address the
convergence of telecommunications, media, and
information technology; develop a strategy that
addresses all stages of the value chain in a holistic
way; and consider the local ecosystem as well as
export opportunities.

Enable sustainable competition: Develop a com-
petitive ICT model that stimulates both innovation
and adoption, while ensuring sector sustainability
and investments.

Stimulate demand: Invest in boosting digitization
usage and service adoption; ensure that public
services are available through e-channels.

Depending on their current stage of digitization,

countries will vary in how they can implement these

imperatives.

Table 1: The impact of increased digitization

Variable

Metrics

Positive Impact of Digitization

Economic

GDP Growth

GDP per capita: Overall

0.60%*

GDP per capita: Constrained Stage

0.50%*

GDP per capita: Emerging Stage

0.51%*

GDP per capita: Transitional Stage

0.59%*

GDP per capita: Advanced Stage

0.62%*

Society

Job Creation

Unemployment rate

–0.84%*

Innovation

Global Innovation Index

6.27 points†

Quality of Life

OECD Better Life Index

1.29 points†

Access to Basic Services

UN HDI: Constrained & Emerging

0.13 points†

UN HDI: Transitional & Advanced

0.06 points†

Governance

Transparency

Corruption Perception Index

1.17 points†

E-government

E-government Development Index

0.10 points†

Education

Inequality Adjusted Education Index: Constrained & Emerging

0.17 points†

Inequality-Adjusted Education Index: Transitional & Advanced

0.07 points†

* 10 percent increase in digitization; †

10-point increase in digitization.

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