CliffNotes of The World Economics Forum’s 2016 Global Technology Report

Lou Kerner
Jul 10, 2016 · 6 min read

Earlier this week, the World Economics Forum released it’s annual Global Technology Report, which among other things, ranks 139 nations in the world on “Network Readiness”, which measures the capacity of countries to leverage technologies for increased competitiveness and well-being (spoiler alert, Singapore is #1). The 289 page report provides thoughtful insight in to macro global innovation trends as well as incredible country-by-country measurement and ranking across more then 50 technology related variables related to the use and availability by individuals, businesses, and governments of information and communications technologies (“ICTs”).

For context, the World Economic Forum is s a Swiss nonprofit foundation with a mission of “…improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas”. The Forum is best known for its annual winter meeting in Davos bringing together 2,500 top business leaders, politicians, intellectuals, and journalists for five days to discuss the most pressing issues facing the world.

The report states that “we are at the dawn of the Fourth Industrial Revolution… causing a transition to a new set of systems that bring together digital, biological, and physical technologies in new and powerful combinations. The Fourth Industrial Revolution is being built on the infrastructure of the third digital revolution — the availability of global, digital communications; low-cost processing and high-density data storage; and an increasingly connected population of active users of digital technologies. The Fourth Revolution is changing both the world around us and our very idea of what it means to be human. The changes are historic in terms of their size, speed, and scope. As these digital technologies become ubiquitous, they are fundamentally altering the way we produce, consume, communicate, move, generate energy, and interact with one another. The fundamental and global nature of this revolution also poses new threats related to the disruptions it may cause — affecting labor markets and the future of work, income inequality, and geopolitical security as well as social value systems and ethical frameworks.”

The four fundamental findings of the report are:

  1. Innovation is increasingly based on digital technologies and business models, which can drive economic and social gains from ICTs (information and communications technologies) if channelled in a smart way.
  2. The way businesses adopt ICTs is key for leveraging them for development, so encouraging businesses to fully embrace the powers of digital technologies should be a priority of governments.
  3. Both the private sector and governments need to step up efforts to invest in innovative digital solutions to drive social impact.
  4. A sustainable digital economy will depend on quickly evolving governance frameworks that allow societies to anticipate and shape the impact of emerging technologies and react quickly to changing circumstances

The Networked Readiness Index (NRI) 2016

The networked readiness framework rests on the basic principles that fully leveraging ICTs requires a society-wide effort: the government, the business sector, and the population at large each have a critical role to play; and that the higher the NRI, the better positioned the country is to leverage technology to the benefit of the economy and society.

The NRI results are a composite made up of four main categories, 10 subcategories,, and 53 individual indicators distributed across the different pillars. The main categories include an Environment subindex, a Readiness subindex , a Usage subindex and and Impact subindex. About half of the individual indicators used in the NRI are sourced from international organizations (e.g. the International Telecommunication Union, UN agencies, the World Bank..). The other half of the NRI indicators are derived from a survey of over 14,000 business executives across more than 140 countries used to measure concepts that are qualitative in nature or for which internationally comparable statistics are not available for enough countries. In other words, the data behind the NRI appears remarkably robust and comprehensive.

The NRI ranking for the Top 70 countries are below:

Among the the most interesting country specific rankings/findings (to me) are:

  1. China — At 59th, China scored far lower than other Asian including Malaysia and Taiwan (interestingly referred to as Chinese Taipei). Out of 139 countries, China ranked low in a slew of categories ranging from international internet bandwidth (119), to the number of govt. procedures needed to start a business (120th), to total tax rate as a % of profits (131st). They did rank well in terms of government procurement of advanced technology (9th)
  2. United States — In 5th place, the U.S. moved up two places from last year, which was up two places from 2014. The U.S. ranked #1 in minimizing software piracy, #2 in business-to-consumer Internet use, #2 in capacity of businesses to innovate and #2 in availability of the latest technologies. Not surprisingly, the U.S. lagged in effectiveness of law making bodies (49th) and tax rates (93rd).
  3. Israel-The country where I focus my time, ranked a surprisingly low 21st, the same ranking as last year. Israel’s ranking was hurt by low marks in the effectiveness of law making bodies (62nd), lack of internet and telephony company competition (87th), and # of days to enforce a contract (124th). Israel ranked well in the % of jobs that are knowledge-intensive (7th), business usage of the Patent Cooperation Treaty (5th), venture capital availability (4th), and businesses capacity for innovation (3rd).
  4. Italy- Moving up 10 spots to place 45th, Italy was the biggest mover in the Top 50. Over the past years, the Italian government has launched a number of policies aimed at improving the provision of online services to its citizens and creating a better environment for start-ups and innovative companies. However, key constraints remain, including the lack of venture capital and the overall political and business environment.
  5. Malaysia — Climbed one spot to 31st place. Malaysia’s government appears committed to the digital agenda and is seen to be ahead of its peers in terms of adopting the latest technologies. Approximately two-thirds of the population is online, individual usage is growing further (47th, up 10 spots); in particular, the uptake of mobile broadband has taken off and reached almost 60 percent. An agile business sector (26th for business usage) is using ICTs to its advantage, interacting with consumers online and re-optimizing business models and organizational structures, thereby contributing to the overall strong performance.

The report concludes the section on the NRI Index by stating that the analysis “”…gives reason for optimism but not for complacency…in terms of networked readiness, the overall trend is positive across all regions of the world. In particular, individual adoption is growing steadily across the globe as efforts continue to close the digital divide. Business executives are optimistic about their countries’ growing innovation capacities, yet the digital innovation impact is so far coming through much more strongly in some countries than in others — the gap between seven digital front runners and the followers is wide. The analysis identifies a high level of business adoption and usage of digital technologies as one of the key characteristics of countries in which ICTs are having a robust economic and digital innovation impact. In most countries, businesses are perceived to be moving at only a moderate pace in truly embracing all dimensions of digitization — in their relations upstream with suppliers and downstream with consumers. This process will need renewed momentum if firms are hoping to thrive in the Fourth Industrial Revolution. Although government use and promotion of ICTs has recently started to fall short of expectations across regions, a number of countries are making large strides in the Index thanks to a strong government ICT vision and engagement in the digital economy. Overall, governments can do more to drive the social impact of digital technologies — for example, by using them to make basic government services more accessible. As technologies are rapidly evolving and can be expected to have a profound impact on our economies and societies, new governance structures will also urgently need to be put in place in order to channel technological forces in ways that bring broad-based gains to societies”

Kudos to the World Economic Forum for this remarkable annual study on global innovation. I strongly recommend this dense report to anyone with an innovation .

Lou Kerner

Written by

Partner @ CryptoOracle.io which runs CryptoMondays. Believer that Crypto is the biggest thing to happen in the history of mankind.

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