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Digital divide between countries is now a “digital chasm”

Sri Narayanan | April 19, 2017
Study reveals digitally developed economies pulling ahead of adopters and starters in global economy.

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The gap between digitally developed economies and those further behind in their digital transformation journeys has widened considerably in a few short years. 

According to the Huawei Global Connectivity Index (GCI) 2017 study, digitally-developed economies or Frontrunners as they are identified, are making larger investments in adopting information  and communication technology (ICT).  There are clear signs their economies are accelerating ahead of emerging economies and slower adopters by investing strategically.

The fourth annual study, GCI 2017 reveals that global progress towards a digital economy is picking up pace. The world's GCI score is up four percentage points since 2015 indicating that ICT has become an engine of economic growth. 

The findings are based on a survey of the digital transformation journeys of 50 countries based on 40 unique indicators that cover five technology enablers: broadband, data centers, cloud, big data and Internet of Things. GCI 2017 categorises 16 countries as Frontrunners, 21 as Adopters, and the rest (13) as Starters. 

Frontrunners (average GDP per capita of US$50,000) achieved an increase of 4.7 GCI points from 2015 to 2017 by leveraging the capabilities of Cloud, Big Data and IoT. Adopters (average GDP per capita of US$15,000) experienced a lift of 4.5 points, while slower Starters (average GDP capita of US$3,000) fell farther behind with only a 2.4 point improvement in overall GCI scores.

Key areas where inequality between the clusters is an issue include mobile broadband subscriptions, IT workforce per capita, ICT investment per GDP, apps download per capita and IoT installed base per capita. According to the study, a one point increase in GCI score is equivalent to a 2.1% increase in competitiveness, a 2.2% increase in national innovation, and a 2.3% increase in productivity. 

According to the findings, a nation that invests an additional 10% annually from 2017 to 2025  in ICT infrastructure will benefit from a multiplier effect. “Using this economic impact model we find that every additional US$1 of ICT infrastructure investment could bring a return of US$3 in GDP at present, US$3.70 in 2020 and the potential return increases to US$5 in 2025,” the report said. 

The 50 countries assessed by the GCI 2017 account for 90 percent of global GDP and 78 percent of the world’s population.

 

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