Since 2000, the Economist Intelligence Unit has assessed the world’s largest economies on their ability to absorb information and communications technology (ICT) and use it for economic and social benefit.
The digital economy rankings model consists of over 100 separate quantitative and qualitative criteria, all but one of which are scored by the Economist Intelligence Unit’s regional analysts and editors, and are organised into six primary categories. The 39 indicators and 82 sub-indicators are, in turn, weighted according to their assumed importance as influencing factors.
Major data sources include the Economist Intelligence Unit, Pyramid Research, the World Bank, the United Nations and the World Intellectual Property Organisation, among others.
The six categories and individual criteria, and their weights in the model, are described below
1. Connectivity and technology infrastructure
Connectivity measures the extent to which individuals and businesses can access the Internet and mobile networks, and do so affordably with an assurance of quality, reliability and security.
Category criteria and weights: Broadband penetration (15%); broadband quality (10%);
broadband affordability (10%); mobile-phone penetration (15%); mobile quality (10%); Internet
user penetration (15%); international Internet bandwidth (10%); Internet security (15%).
2. Business environment
In evaluating the general business climate, the Economist Intelligence Unit screens 74 sub-indicators to provide a comprehensive and forward view of each country’s attractiveness as a trading economy and as a destination for business investment from 2009 to 2013.
Category criteria and weights: Overall political environment; macroeconomic environment; market opportunities; policy towards private enterprise; foreign investment policy; foreign trade and exchange regimes; tax regime; financing; the labour market. (All nine criteria are weighted equally.)
3. Social and cultural environment
Education is a precondition to being able to utilise Internet services, but this category also considers a population’s web-literacy—its experience using the Internet and its receptivity to it—and the technical skills of the workforce.
Category criteria and weights: Educational level (measured by school life expectancy, gross enrolment in education and enrolment in tertiary education); Internet literacy; degree of entrepreneurship; technical skills of workforce; degree of innovation (measured by the generation of patents and trademarks, as well as R&D spending). (All five criteria are weighted equally.)
4. Legal environment
E-business development depends on both a country’s overall legal framework and specific laws governing Internet use.
Category criteria and weights: Effectiveness of traditional legal framework (30%); laws covering the Internet (25%); level of censorship (10%); ease of registering a new business (25%); electronic ID (10%).
5. Government policy and vision
E-ready governments supply their constituents—citizens and organisations— with a clear roadmap for the adoption of technology, and they lead by example in their use of technology to create efficiencies.
Category criteria and weights: Government spend on ICT as a proportion of GDP (5%); digital development strategy (25%); e-government strategy (20%); online procurement (5%); availability of online public services for citizens (15%) and businesses (15%); e-participation (15%, based on the UN e-participation index).
6. Consumer and business adoption
If connectivity, societal adoption, and legal and policy environments are necessary enabling platforms for a digital economy, then the actual utilisation of digital channels by people and companies is a measure of successful implementation.
Category criteria and weights: Consumer spending on ICT per head (15%); level of e-business development (10%); use of Internet by consumers (25%, assessing both the range of Internet features used by individuals and their online purchasing activity); use of online public services by citizens (25%) and businesses (25%).
Digital economy rankings and scores, 2010
Accelerating growth in the use of e-government channels by citizens remains a difficult challenge even in the most digitally developed countries.
The strenuous efforts of some governments to control citizens’ access to Internet content impedes progress toward a digital economy.
Category scores of Economist Intelligence Unit digital economy rankings, 2010
A fundamental human right?
The goal of achieving uniform access to the Internet across country’s population continues to elude policymakers. Many governments continue to invest heavily in network infrastructure with this objective in mind.
Australia, with its $40bn National Broadband Network initiative, is a noteworthy example. Successful implementation of this initiative would put the minority of Australians (usually remote or rural residents) currently beyond the reach of high-speed Internet on a digital par with their compatriots. A few countries, such as Finland (4th), have gone so far as to enshrine in law Internet access as a basic human right; a recent BBC poll of Internet users found that 87% of people across 27 countries believe this should indeed be the case.
Source: Economist Intelligent Unit