Benchmarking the Future of the Network Economy
Nearly two years after the onset of COVID-19, one conclusion is clear—digital transformation has changed from a needed priority into a global imperative for all. Businesses, governments, education institutions, and individuals all rapidly shifted their processes online in the wake of lockdown measures. The overnight shift towards virtual living and working heightened our reliance on digital technologies and increased the demand for network infrastructure, reliable connectivity, and digital literacy.
The need for data and actionable insights towards network readiness and digital innovation offered the precise reason for the first Network Readiness Index (NRI) 20 years ago, and it is the very reason why the index is more relevant now than ever.
The NRI 2021 is the third edition of the updated model that addresses trust, governance, inclusivity, and the potential impact on Sustainable Development Goals (SDGs). We have introduced additional indicators for two reasons: first, to better capture the reach and impact of digital transformation, and second, to offer a holistic view of how technology use can enhance the development and competitiveness of economies.
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The Top 10
Compared to previous years, the ranking of the top 10 performers in the NRI 2021 experienced some significant shifts in its composition. While the countries within the top 10 remain the same, specific countries made notable movements within the upper group. In particular, the Netherlands climbed three spots to take the top position from Sweden, which has held the number one position since 2019. The United States also shifted, increasing four rankings to earn a place among the top five for the first time in the 2019-2021 period. With Singapore falling out of the top five, four out of the five most network-ready economies in 2021 are from Europe.
The top 10 performers all demonstrate solid performance metrics across the highest number of dimensions of the NRI. They all rank as the top 20 countries on each of the four primary pillars (Technology, People, Governance, Impact) and on at least two-thirds of the twelve sub-pillars. In particular, top performers rank well on the prominent indicators of Future Technologies, Economy, and Trust. All of the top 10 countries are high-income economies characterized by significant investment in emerging technologies and successful adoption of information and communications technologies (ICTs) by governments, businesses, and individuals. In terms of regional distribution, Europe leads with eight top ten countries, while Singapore and the United States represent the only economies located in Asia and the Pacific and the Americas, respectively.
|Economy||NRI Rank||NRI Score||Technology||People||Governance||Impact|
The top three countries in each region capture the performance divide that exists among different regions. Europe continues to lead with four countries in the global top five, while Africa remains the most laggard regional group. The Netherlands is the top performer in Europe as well as the top performer in the overall NRI rankings. The United Arab Emirates, Singapore, the Russian Federation, and the United States continue to lead in their respective regions. South Africa earned the top position in Africa this year.
|Africa||Arab States||Asia & Pacific||CIS||Europe||The Americas|
|1. South Africa (70)||1. United Arab Emirates (34)||1. Singapore (7)||1. Russian Federation (43)||1. Netherlands (1)||1. United States (4)|
|2. Mauritius (71)||2. Saudi Arabia (40)||2. Korea, Rep. (12)||2. Armenia (60)||2. Sweden (2)||2. Canada (11)|
|3. Kenya (84)||3. Qatar (42)||3. Australia (13)||3. Kazakhstan (61)||3. Denmark (3)||3. Chile (44)|
Note: Global ranks in parentheses. CIS = Commonwealth of Independent States.
Income Group Leaders
The top performers of each income group reflect the strong correlation between income levels and network readiness present in the NRI 2021. High-income groups dominate the top quartile and earn the top three spots in the overall index ranking. China is the only country in the upper-middle-income group economies to rank in the upper quartile. Ukraine and Vietnam are the only lower-middle-income economies that make it into the upper half of the NRI rankings.
|High Income Countries||Upper-Middle Income Countries||Lower-middle Income Countries||Low Income Countries|
|1. Netherlands (1)||1. China (29)||1. Ukraine (53)||1. Rwanda (101)|
|2. Sweden (2)||2. Malaysia (38)||2. Viet Nam (63)||2. Tajikistan (111)|
|3. Denmark (3)||3. Russian Federation (43)||3. India (67)||3. Gambia (113)|
Note: Global ranks in parentheses.
Continuing to improve the NRI model
The pace of digital transformation demands a continual reexamination of the sources that enrich the NRI model. Similar to the renewal process of 2019, the NRI team examined multiple general and technology-specific sources to identify novel indicators that can help measure and assess the dynamic landscape of digital transformation and network readiness.
Improvements to the NRI occurred through the replacement, development, or inclusion of coherent metrics, but the main concept underlying the NRI model remained constantPrimary updates to the NRI 2021 apply across five sub-pillars: Access, Future Technologies, Individuals, Businesses, Economy, and SDG Contribution. A total of 60 indicators populate all 12 sub-pillars in the NRI. Details about any improvements within the complete list of indicators are found in Appendix I: Technical Notes and Appendix II: Sources and Definitions of the report.
Technology is at the heart of the network economy. Therefore, as a primary category of the NRI, the Technology pillar seeks to assess the level of technology that is a sine qua non for a country to participate in the global economy. Three sub-pillars accomplish the Technology pillar’s purpose:
- Access: The fundamental access level to ICT in countries, including issues about communications infrastructure and affordability.
- Content: The type of digital technology produced in countries and the content/applications that can be deployed locally, including research on the subject derived from scientific and technical articles.
- Future Technologies: The extent that countries have prepared for the future of the network economy and new technology trends such as Artificial Intelligence (AI) and the Internet of Things (IoT).
The prevalence and quality of technology reflect countries' (and any organization's) skill, access, and ability to utilize technology resources in productive ways. Therefore, the People pillar measures how people apply ICT at three levels of analysis: individuals, businesses, and governments.
- Individuals: How individuals use technology and leverage their skills to participate in the network economy.
- Businesses: How businesses use ICT and participate in the network economy.
- Governments: How governments use and invest in ICT for the benefit of the general population.
Governance refers to the structures that uphold an integrated network for the safety and security of its users. Therefore, the Governance pillar concerns the establishment and accessibility of systems that promote activity within the network economy across three levels:
- Trust: The safety of individuals and firms in the context of the network economy, reflected in an environment conducive to trust and the trusting behavior of the population.
- Regulation: The extent to which a government promotes participation in the network economy through regulation, policy, and planning.
- Inclusion: The digital divides within countries where governance can address issues such as inequality based on gender, disabilities, and socioeconomic status.
Readiness in the network economy is a means to improve the growth and well-being of society and the economy in general. Therefore, the Impact pillar seeks to assess the economic, social, and human impact of participation in the network economy across three levels:
- Economy: The economic impact of participating in the network economy.
- Quality of life: The social impact of participating in the network economy.
- SDG contribution: The impact of participating in the network economy within the context of SDGs. ICT has a critical role within the network economy and receives particular focus with indicators integrated across health, education, and the environment.