2016 global connectivity index: Digital transformation on rise

National and economic digitization have witnessed an average improvement of 5 percent across the globe since 2015, according to Huawei’s 2016 Global Connectivity Index (GCI) released yesterday. GCI 2016, Connect where it counts, measures how nations are progressing with digital transformation based on 40 indicators that cover the supply, demand, experience, and potential of five technology enablers: broadband, data centers, cloud, big data, and IoT.

In its third year, the report notes that though the biggest improvements have been seen in broadband coverage and speed, but nations are also making headway with a cloud, big data, and Internet of Things (IoT) technologies. Twelve countries improved their positions while four experienced a drop. The top three developed economies are the United States, Singapore, and Sweden. The leading developing economies are the United Arab Emirates in 19th place, Qatar in 21st, and China in 23rd.

UK(5th), Malaysia(25th) and Indonesia(41st) are among the countries that have moved up the index from last year rankings. Malaysia and Indonesia’s gains are being credited to broadband rollout, which in turn influences data center development. These two basic technologies lay the foundation for the three advanced technology enablers: cloud, big data, and IoT.

GCI scores continue to show a positive correlation with GDP, similar to last year’s findings. However, the extent to which GCI influences GDP varies with the stage of digital transformation in each country. Investing in digital infrastructure correlates to GDP gains because it increases economic dynamism, efficiency, and productivity. The report further notes that to drive further GDP gains, countries need to move up the technology stack by investing in new technologies and ensuring they are adopted by governments, industry, and people.

GCI 2016 identifies three groups of nations: Starters, Adopters, and Frontrunners. Starters are the ones who have just begun their digital journey and score between 20 and 34. At the moment, their digital infrastructure is not developed enough to strongly influence GDP. Adopters in the middle range have a stronger digital infrastructure and score between 35 and 55. They experience the greatest GDP gains per GCI point increase. Frontrunners register the greatest digital development with scores above 55, although GDP gains per GCI point are slightly less than Adopters. However, Frontrunners show more mature cloud, big data, and IoT in readiness for more extensive economic digitization.

According to the report, nations with high GCI scores are also more competitive and innovative. “A revolutionary shift is occurring in the way the world works, with economies across the planet going digital fast. Nations that are in the early stages of economic digitization should develop long-term technology plans that include broadband and data centers to reap the benefits of enhanced growth,” said Kevin Zhang, President of Huawei Corporate Marketing. “Developed economies wanting to capitalize on their frontrunner ICT status should invest more in the cloud, big data, and IoT technologies and solutions to experience the full benefits of a digital economy.”

The 50 countries assessed by GCI 2016 account for 90 percent of global GDP and 78 percent of the world’s population.