|Home | Press | Analysis of 142 Economies Worldwide Demonstrates a Marked Influence from Levels of ICT and Digitization on the Economy and Society|
New York, NY April 4, 2012 — The recently-published Network Readiness Index 2012 (NRI) by the World Economic Forum (WEF) and the INSEAD Business School assesses the framework conditions and skills base for making the information communication technology (ICT) and internet infrastructure available to and usable by the general population and business in the country concerned – across all areas, affordably, rapidly and reliably. The study looked at 142 states worldwide. The top positions in the rankings were taken by Sweden (5.94), ahead of Singapore (5.86) and Finland (5.81).
10% higher level of digitization results in 0.8% lower unemployment rate
International strategy consultants Booz & Company examined the impact that ICT and internet infrastructures are having on a country’s economy, society and prosperity as part of the study “The Global Information Technology Report 2012: Living in a Hyperconnected World.” Dr. Roman Friedrich, partner and telecommunications expert at Booz & Company, comments that “digital factors in relation to a location, such as comprehensive availability of the ICT and broadband infrastructure or of e-Government offerings, are as decisive today for the growth and prosperity of an economy as a country's energy supplies or wealth in raw materials.” Friedrich’s assessment is that “unlike these others factors, however, state bodies are very well-placed to exert a positive influence over the framework conditions for rolling out modern ICT infrastructure, and thus ultimately of establishing the conditions for economic advancement, improved quality of life and prosperity.”
The strategic consultants at Booz & Company calculated that a 10% higher level of digitization in a country results on average in a per-capita GDP figure that is 0.6% higher, an unemployment rate that is 0.8% lower, and a trend towards innovation that is 6.4% higher. Some states in the Arabian Peninsula and Asia are exhibiting astonishing speed of digitization. “Emerging economic nations such as Brazil, Latvia or Bahrain have established good conditions for digitization through having an active industrial policy and a suitable regulatory framework. They are now benefiting considerably from the resulting economic and social opportunities,” says Karim Sabbagh, Senior Partner and Global Head of Communication, Media and Technology Practice at Booz & Company.
State-level framework conditions critical for ICT infrastructure
In this study, Booz & Company specifically examined the influencing measures open to the state, through establishing supportive regulatory, fiscal and industrial policy environments, in order to affect the degree of digitization in the respective country. For instance, the international strategy consultants identify the lack of investment security, unclear regulatory specifications (e.g. over the access price for the telecommunications infrastructure), or threats of more extensive regulation of termination charges or even of end-customer tariffs (e.g. in the case of the roaming tariffs), as serious obstacles to digitization, given that these unsettle private investors. Conversely, positive influence is identified for tax breaks at national level for infrastructure investment, incentives encouraging use of e-Government applications, or clear statutory arrangements regarding access obligations, including for non-active grid elements such as empty pipes. “The political environment has a decisive influence over whether a country achieves an advanced stage of digitization. But the reverse conclusion also means that decisions reducing, say, security of investment for public and private ICT infrastructure can have dire economic and social consequences,” says Friedrich.
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Booz & Company (booz.com) is a leading global management consulting firm focused on serving and shaping the senior agenda of the world’s leading institutions. Drawing on the talents and insights of more than 3,000 people in 58 offices around the world, we help our clients achieve essential advantage by working with them to identify and build the differentiating capabilities they need to outperform.
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