Analysis

Over the past two years, the COVID-19 pandemic increased our dependence on technology and accelerated the inevitable process of digital transformation as many aspects of life moved online. The shift towards improved technological capability and integration presents an opportunity to build a better and more connected future in light of the “new normal”. However, as societies usher in the new era of accelerated digital transformation, it is important to consider whether global inequalities concerning technology access and usage will subside or continue to expand.

The swift shift towards an increased reliance on technology has caused recognizable social, economic, and political changes that will have a lasting impact.

Divides in access exist not just between regions and economies but also remain persistent between genders. The digital gender divide continues to present a significant barrier to meaningful participation in a digital society, a barrier exacerbated by the effects of the pandemic. The rapid digitalization triggered by the COVID-19 pandemic uncovered gender gaps in Internet access, digital skills, participation in STEM fields, and innovation leadership (Brookings Institution, 2021).

Equal access to digital technologies and skills is a step towards gender equality within the context of the Sustainable Development Goals. Greater inclusion of women and girls in these spaces can have far-reaching effects as it will encourage further participation in educational, economic, and entrepreneurial opportunities.

As a growing number of large economies adopt massive stimulus and fiscal packages, anticipating the shape that the global recovery will form becomes easier. Four primary areas emerge as likely to receive the bulk of such recovery efforts:

1. Health: Since the effects of the pandemic are still highly visible and sensitive, funding for vaccines and other treatments, in addition to the re-hauling of national health systems, will be in order.
2. Greening of the economy: National economy's willingness and capabilities to fight climate change will likely increase.
3. Infrastructure: Labor-intensive employment in infrastructure could help combine nation priorities to fight unemployment and 'rebuild better'.
4. Digital transformation (of organizations and societies): Out of all four recovery aspects, digital transformation cuts across and impacts each of the first three.

If local and global inequalities start to grow again, it could diminish the long-term impact and sustainability of such stimulus packages. Fully leveraging technology and international cooperation should be top priorities for national economies as equalizing factors in the post-COVID recovery process (turning a K-shaped recovery to a global V-shaped one).

The leading countries in network readiness have balanced, dynamic economies that excel in multiple areas and demonstrate strong performances across all pillar dimensions of the NRI. Similar to previous years, seven of the top 10 overall ranking economies also rank in the top 10 in at least three of the four primary NRI pillars. Performance trends demonstrate the importance of adopting a holistic approach towards advancing network readiness, as the four primary pillar areas are interdependent and reinforce each other.

For example, as new technologies emerge during this era of digital transformation, factors such as governance and regulation (as well as mechanisms for disseminating these technologies among individuals, businesses, and governments) must keep pace. As the new digital economy becomes more established, the ability to integrate people and technology within the proper governance structures is key to fostering resilience and sustainability.

Although economies in higher-income region clusters remain the most network-ready, some of the most noteworthy efforts in overall performance identified this year are among the African countries of the middle and lower-income groups. Economies like South Africa ( 70th), Rwanda (101st), Nigeria (103rd), Mali (118th), and Madagascar (120th) display performances in certain NRI dimensions that are at par or even above some economies in the more developed regions of Asia and the Pacific, the Arab States, and Europe.

In particular, economies that outperformed expectations showed higher prowess in governance, people, and technology. Still, this trend is less clear regarding impact, evidencing some of the pressing issues often endemic to emerging economies.

China (29th), Ukraine (53rd), Vietnam (63rd), India (67th), and Rwanda (101st) are a few of the economies that continue to close the performance gap between income groups. China is the only upper-middle-income group economy that approached the cluster of high-income group economies featured in the top 25. In particular, China’s output in areas of digital technology associated with people and impact is above the high-income group median performance.

Similarly, Ukraine (a lower-middle-income group economy) stands out with a performance above the mean of the upper-middle-income group in all four primary pillars of network readiness (Technology, People, Governance, and Impact). Lower-middle-income group peers Vietnam and India display similar results in technology and impact, while Rwanda (a low-income group economy) closes the gap with the lower-middle-income economies when it comes to governance.

Even among regions that have achieved Internet connectivity, barriers such as the speed of connection, availability, affordability of connected devices, and fragmented regulatory environments persist, barring individuals from leveraging the power of digital technologies to create economic and social value. While connectivity is critical, it is also important to go beyond and focus on additional aspects such as education (to improve skills and support content creation) and policies that support technological investments and innovation in businesses, both small and large.

Lastly, it is crucial that economy’s tackle the digital divide to ensure Internet access contributes to equal opportunity, rather than becoming a means that increases social and economic inequality.