Singapore scored the highest in Asia Pacific, and sixth worldwide in the Digital Evolution Index by The Fletcher School and Mastercard
Singapore, July 12, 2017 – The Fletcher School at Tufts University in partnership with Mastercard today unveiled the Digital Evolution Index 2017. This comprehensive research tracks the progress countries have made in developing their digital economies and integrating connectivity into the lives of billions.
The research identifies Singapore, the United Kingdom, New Zealand, the United Arab Emirates, Estonia, Hong Kong, Japan, and Israel as digital elites since they are both highly digitally evolved and continue to move quickly. With momentum and innovation at their side, these ‘stand out’ countries demonstrate the sweet spot of progress and future growth.
According to their overall digital evolution scores, the research identifies Norway (1st), Sweden, Switzerland, Denmark, Finland, Singapore (6th), South Korea, the United Kingdom, Hong Kong, and the United States (10th) as the top ten most advanced digital economies.
Across the Asia Pacific region, Singapore ranked first (3.69) in the Digital Evolution Index, followed by South Korea (3.68) and Hong Kong (3.66). At the other end of the spectrum, Pakistan (1.69), India (1.85) and Bangladesh (1.51) scored the lowest in the Index, indicating that much more can be done to develop their digital economies.
With nearly half of the world’s population online, the research maps the development of 60 countries, demonstrating their competitiveness and market potential for further digital economic growth. The Index measures four key drivers and 170 unique indicators to chart each country’s respective course:
- Supply (or internet access and infrastructure)
- Consumer demand for digital technologies
- Institutional environment (government policies/laws and resources)
- Innovation (investments into R&D and digital start-ups etc.)
Businesses, governments and civil society are working to bring everyone online, while also ensuring the security of the digital infrastructure. The report provides a way to assess digital “trust” as well as the state and rate of digital evolution with examples from around the world, giving countries the opportunity to learn from each other to further their advancement.
“Adoption, the quality of digital infrastructure and institutions, and innovation collectively shape a country’s digital competitiveness, but governments also play a key role. The report also found that consumers’ trust in digital technologies correlates with digital competitiveness,” said Bhaskar Chakravorti, senior associate dean of international business & finance at The Fletcher School at Tufts University, and founding executive director of Fletcher’s Institute for Business in the Global Context.
Based on overall digital evolution scores, Norway, Sweden, Switzerland, Denmark, Finland, Singapore, South Korea, the United Kingdom, Hong Kong, and the United States make the top ten list of advanced digital economies, but given the current pace of innovation and change, being an advanced digital economy today doesn’t guarantee that status tomorrow. How open and supportive they are to innovation help determine their future growth potential.
Combining the pace and state of digital advancement, the research puts markets into four distinct categories:
- Stand Out –Singapore, the United Kingdom, New Zealand, the United Arab Emirates, Estonia, Hong Kong, Japan, and Israel demonstrate high levels of digital development while continuing to lead in innovation and new growth.
- Stall Out – Many developed countries such as in Western Europe, the Nordics, Australia and South Korea have a history of strong growth, but their momentum is slowing. Without further innovation, they are at risk of falling behind.
- Break Out – Though still at relatively lower absolute levels of digital advancement, these countries demonstrate the fastest momentum, are poised for growth and are attractive to investors. China, Kenya, Russia, India, Malaysia, Philippines, Indonesia, Brazil, Colombia, Chile and Mexico exhibit this breakout potential.
- Watch Out – Countries such as South Africa, Peru, Egypt, Greece and Pakistan face significant challenges, constrained both by low levels of digital advancement and a slow pace of growth.
“We all know technology can do more to improve economies and make our lives better, but growth is only achievable if everyone has confidence in the developing ecosystem,” said Ajay Bhalla, president, global enterprise risk & security, Mastercard. “In our pursuit of a truly connected world, trust and security are critical to successful digital development.”
New This Year: The Trust Factor
Central to digital evolution is digital “trust”. However, to date, digital trust has proved difficult to understand, let alone measure, but it remains a keystone of the global digital economy. As interactions are increasingly conducted digitally and affect more and more aspects of people’s lives, digital trust continues to grow in importance. New to the 2017 report, the research team at The Fletcher School analyzed 42 of the 60 countries in the Index around four key dimensions — behavior, attitudes, environment, and experience — to understand the state of digital trust.
Some of the findings include:
- China, Switzerland, Singapore, and the Nordics score well on different metrics, but for vastly different reasons.
- Singaporeans ranked second in behavior, demonstrating patient and engaged consumer behavior while also scoring well for both experience (11th) and environment (12th) metrics, which looks at the user experience, as well as privacy and accountability respectively
- With Chinese consumers ranking first in behavior, it is notable that they are an outlier when it comes to demonstrating patient user behavior in the face of friction, such as slow internet speeds.
- South Korea is the polar opposite of China, where consumers exhibit low levels of patience despite possessing one of the most developed digital experiences and environment
- Western and Northern European states lead in digital trust experience and environment scores, which reflect investments in strong security, privacy, and accountability measures, and in minimizing friction.
- Overall the research shows that in countries where their momentum score was higher, consumers were more tolerant of friction in their daily digital interactions and transactions, suggesting that momentum may be a vital factor in understanding consumer behavior and trust.
Further, governments and businesses are considered the guarantors of trust, and are charged with facilitating trust among their citizens and consumers. The findings demonstrate that trust is critical to digital competitiveness, and that countries can only go so far without it.
Deborah Heng, country manager, Mastercard Singapore said, “Singapore’s success with digitalization is due to many factors, including a strong governmental push on this front, a focus on innovation as well as a digitally savvy population. As reflected in the Digital Evolution Index 2017, Trust plays an important role in driving a successful digital economy. In moving forward, the key is to keep the momentum going while ensuring that data protection and privacy remains a key priority at all times.”
Implications: How Countries Can Win
More details and country-specific case studies can be found in the summary insights overview including:
- Use Public Policy as Key to the Success of the Digital Economy: This has implications ranging from Brexit negotiations to how India nudges its society towards a “less cash” future to the U.S.- China competition for economic dominance.
- Identify What Drives Digital Momentum: Developed and developing economies ought to emphasize different ways to spur growth: innovation and institutions, respectively.
- Jumpstart Small Country Growth by Involving Government: They can grow quickly as early adopters by assembling the right ecosystems.
- Reinvent the Digital Stalwarts: The most digitally advanced countries can use their scale and existing connections in the world to reinvent themselves.
- Play Digital Catch-Up by Closing the Mobile Internet Gap: The least digitally advanced countries must prioritize increasing internet access via mobile phones.
- Work Harder to Earn Users’ Trust: As nations become more digitally evolved and momentum slows, technology providers and policymakers may need to prioritize building trust to continue growth.
About the Digital Evolution Index
The Digital Evolution Index 2017 builds off the successful launch of the first edition of the Index in 2014. The research behind this latest edition considers numerous new factors to better reflect rapid changes in the digital world and create a report that is accurate, robust and comprehensive.
The in-depth analysis includes a study of the pace of digital evolution across 60 countries, across four key drivers of supply, demand, institutional environment and innovation. It utilizes data over 8 years (2008 – 2015) to provide an overall digital evolution score and digital momentum score, as well as a measure for digital trust.
The Digital Evolution Index is a research product of Digital Planet — an interdisciplinary research platform, based at the Institute for Business in the Global Context at The Fletcher School at Tufts University.
About The Fletcher School
The Fletcher School at Tufts University is the oldest exclusively graduate school of international affairs in the United States. The School’s alumni represent the highest levels of leadership in the world, including hundreds of sitting ambassadors, political and military leaders, respected voices from distinguished media outlets and institutions, heads of global non-profit organizations, and executive leadership of some of the world’s largest corporations. The Fletcher School offers a collaborative, flexible and interdisciplinary approach to the study of international affairs, featuring a distinguished faculty and diverse student body representing more than half the world’s countries.
Mastercard (NYSE: MA), www.mastercard.com, is a technology company in the global payments industry. We operate the world’s fastest payments processing network, connecting consumers, financial institutions, merchants, governments and businesses in more than 210 countries and territories. Mastercard products and solutions make everyday commerce activities – such as shopping, traveling, running a business and managing finances – easier, more secure and more efficient for everyone. Follow us on Twitter @MastercardNews, join the discussion on the Beyond the Transaction Blog and subscribe for the latest news on the Engagement Bureau.
Celina Lim, Celim@webershandwick.com
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