Preface
Although it is too early to draw a precise picture of the Post-Covid world, it is safe to say the digital-led global recovery has been unequal, further amplifying the digital divide between different geographic and economic groups. In this complex and volatile context, the role of digital transformation is bigger than ever. It has the potential to fundamentally change how organizations, governments and individuals operate and create more value for the economy and society at large.
While digital transformation impacts all aspects of our lives, it does so in uneven ways, affecting various cultural, economic, and age groups differently. The previous edition of the Network Readiness Index (NRI) focused on digital-led recovery from the Covid-19 pandemic and its effects of closing the digital divide between different groups of society. This year the focus is on one specific group - the younger generations, or 'digital natives', and the role they play in shaping the world as we step into the new digital era.
While some of the questions related to the role of digital natives in shaping our collective future surpass the realm of direct measurability, we believe that the right metrics can help provide adequate policy interventions that steer the process in the right direction and maximize benefits not just for younger generations, but also for the economy and society at large.
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NRI 2022 Theme
Stepping into the new digital era:
How and why digital natives will shape the world.
One might initially be tempted to conclude that the accelerated digitalization of our societies is benefitting more those who understand and master them. These 'digital natives' are typically the younger generations rather than the older generations. However, it is important to consider those challenges and opportunities facing the younger generations that will be ushered in by the advent of the digital era.
The global data collected by the NRI team, and the subsequent analyses stemming from this data, reveals that much uncertainty remains about our collective international ability (and that of individual economies) to maximize the social and economic effects of this digital transformation. If the world's youth is indeed expected to play the leading roles in this global process, then emerging economies have a definite demographic advantage. Yet, simple numbers do not tell the whole story without careful consideration.
Key Results
The Top 10
In contrast to previous years, the top 10 performers in the NRI 2022 repositioned themselves in their relative level of network readiness. Specifically, the Republic of Korea makes its first appearance in the top 10. Additionally, the United States climbed three spots to displace the Netherlands in the top position, which had previously dominated the NRI rankings throughout the years. Singapore also climbed five spots to earn a place among the top five for the first time since 2020. This addition to the top 10 created a more geographically balanced distribution than in previous years. The top 10 performers all demonstrate solid performance metrics across the dimensions of the NRI. They all rank as the top 25 countries on each of the four primary pillars (Technology, People, Governance, Impact), demonstrating a comprehensive approach to maintaining digital readiness. The top 10 countries exhibit a pattern of high-income economies devoted to investing in and adopting information and communications technologies (ICTs) across governments, businesses, and individuals.
| Pillars | ||||||
|---|---|---|---|---|---|---|
| Economy | NRI Rank | NRI Score | Technology | People | Governance | Impact |
| United States | 1 | 80.30 | 1 | 2 | 7 | 20 |
| Singapore | 2 | 79.35 | 4 | 4 | 10 | 2 |
| Sweden | 3 | 78.91 | 8 | 5 | 5 | 1 |
| Netherlands | 4 | 78.82 | 3 | 14 | 4 | 4 |
| Switzerland | 5 | 78.45 | 2 | 11 | 12 | 5 |
| Denmark | 6 | 78.26 | 11 | 7 | 2 | 7 |
| Finland | 7 | 77.90 | 13 | 6 | 3 | 3 |
| Germany | 8 | 76.11 | 7 | 9 | 14 | 8 |
| Korea, Rep. | 9 | 75.95 | 14 | 1 | 22 | 13 |
| Norway | 10 | 75.68 | 12 | 12 | 1 | 14 |
Regional Leaders
The top three regional leaders reflect the performance divide that exists across the different regions of the NRI. Foremost, Europe leads by having a majority in the top 10 economies. They are followed by Asia, with Singapore and the Republic of Korea achieving spots respectively in the top 10. Africa, on the other hand, remains the region with the lowest quartile performance. The highest ranking economies in each region tend to ensure their population is digitally well equipped, as well as continuously pressing forward by readily adopting future technologies. A particular example of this trend is Sweden's position as the top performer in Europe, followed by the Netherlands' consistent positive ranking. The United Arab Emirates, Singapore, the Russian Federation, the United States, and South Africa all continue to lead in their respective regions.
| Africa | Arab States | Asia & Pacific | CIS | Europe | The Americas |
|---|---|---|---|---|---|
| 1. South Africa (68) | 1. United Arab Emirates (28) | 1. Singapore (2) | 1. Russian Federation (40) | 1. Sweden (3) | 1. United States (1) |
| 2. Mauritius (72) | 2. Saudi Arabia (35) | 2. Korea, Rep. (9) | 2. Kazakhstan (58) | 2. Netherlands (4) | 2. Canada (11) |
| 3. Kenya (77) | 3. Qatar (42) | 3. Japan (13) | 3. Armenia (64) | 3. Switzerland (5) | 3. Chile (43) |
Note: Global ranks in parentheses. CIS = Commonwealth of Independent States.
Income Group Leaders
The top performing economies for each income group reflect the positive correlation between income levels and network readiness, as demonstrated by the achievements of the United States, Singapore, and the Netherlands. Each of these countries tend to invest relatively more than the others in their group in the human capital of their workforce, and have attained more new technologies. Of those economies that performed the best overall, the high-income groups dominate the top quartile and earn the top three spots in the overall ranking. Comparatively, China represents the upper middle-income economies ranked in the upper quartile, whereas, Ukraine is the only lower middle-income economy that appears in the upper half of the NRI rankings. While higher-income countries have generally performed better in the area of network readiness, this may be the result of having invested previously in the technologies and regulatory policies that have proven to streamline digital growth.
| High Income Countries | Upper-Middle Income Countries | Lower-middle Income Countries | Low Income Countries |
|---|---|---|---|
| 1. United States (1) | 1. China (23) | 1. Ukraine (50) | 1. Rwanda (101) |
| 2. Singapore (2) | 2. Malaysia (36) | 2. Indonesia (59) | 2. Zambia (113) |
| 3. Sweden (3) | 3. Russian Federation (40) | 3. India (61) | 3. Uganda (116) |
Note: Global ranks in parentheses.
Continuing to improve the NRI model
Digital transformation demands a continual reexamination of the sources that enrich the NRI model. Each year 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. Yet, the main concept underlying the NRI model relies on the notion that our collective future will require a harmonious integration of People and Technology.
Primary updates to the NRI 2022 apply across six sub-pillars: Access, Content, Individuals, Businesses, Economy, and SDG Contribution. A total of 58 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.
Technology
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: People's 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. This includes research findings on the subject derived from scientific and technical articles, software spending, GitHub commits, and mobile app creation.
- Future Technologies: The extent that countries have prepared for the future of the network economy and new technology trends. This includes employing Artificial Intelligence (AI), the Internet of Things (IoT) and the levels of spending in emerging technologies.
People
The prevalence and quality of technology reflect the skill, access, and ability of the people and organizations within a country 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 including their spending on R&D.
- Governments: How governments use, invest in, and deploy ICT for the benefit of the general population.
Governance
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 that is 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.
Impact
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 - including the size of the local market.
- 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, gender equality, and the environment.
