By Peter OBIORA InvestAdvocate
Lagos (INVESTADVOCATE)-Nigeria has ranked the least digital economy followed by Kenya according to the Digital Evolution Index developed by global payment system providers, MasterCard and The Fletcher School.
The list shows that Singapore, Sweden and Hong Kong occupy the first three (3) positions on the list of countries prime to welcome the next billion internet users.
The United Kingdom (UK) and Switzerland round out the top five (5), while the United States is in the sixth position among the 50 countries measured.
Ann Cairns, president, international market, MasterCards said while developed markets dominate the top spots, a different picture emerges when measuring the pace of digital adoption, the study analysed each market’s evolution from 2008 to 2013 to understand country benchmarks, track progress and identify areas for improvement. “From this perspective, China, Malaysia and Thailand ranked as the top three fastest moving digital economies,” Cairns said.
“The way people engage digitally is changing fast and we have to listen and watch to truly understand the opportunities and make them matter to people where they are. It is clear that innovation moves at different speeds around the world but the unifying opportunity ahead of us is how we harness engagement in the online and offline worlds, and build trust between the user, the service and the payment mechanism,” she affirmed.
The Digital Evolution Index shows there are currently 2.9 billion internet users in the world. “While a staggering number, businesses and governments have an opportunity to expand their reach by bringing the remaining 60 percent of the global population online. Successfully supporting those consumers will depend on knowing which countries are leading digital growth,” the Index said.
The study identified four (4) interdependent drivers – supply, demand, institutions and innovation – that define each country’s digital evolution and can serve as strategic evaluation points for future growth.
Bhaskar Chakravorti, Seniour Associate Dean of International Business and Finance at the Fletcher School said there is very little about the digital past and present of the West that instructs about the digital present and future of the rest.
“The momentum and direction of countries over time result from the interplay of these systemic elements. In the experience of the West the four drivers are more tightly connected. In the case in emerging markets – where the next billion e-consumers are – some of these drivers move much faster than others; the trajectory is non-linear and you could end up with surprises such as Alibaba in China or Flipkart in India or M-Pesa in Kenya. Specifically, understanding the institutions and innovations in these parts of the world is essential to knowing where the world’s digital evolution will pop next,” Chakravorti said.
According to him, while developed markets dominate the top spots, a different picture emerges when measuring the pace of digital adoption. The study analyzed each market’s evolution from 2008 to 2013 to understand country benchmarks, track progress and identify areas for improvement.
He further affirmed that countries were grouped into four (4) trajectory zones these include the break out which comprises of countries currently having low readiness scores, but are rapidly evolving. India, China, Brazil, Vietnam, and the Philippines are examples. “If their evolution rates sustain, these countries will emerge as strong digital economies, but the Index shows that the next phase of growth may be harder to achieve,” Chakravorti said.
Another trajectory zones is the stall out, in this zone, while possessing a history of strong growth, these countries (most of Western and Northern Europe, Australia and Japan) have matured. “Innovation and seeking markets beyond domestic borders will be critical to continuing growth,” The Seniour Associate Dean of International Business and Finance at the Fletcher School said.
The third is the stand out, the Digital Evolution Index said countries, such as Singapore, Hong Kong, and the United States, have and continue to maintain high levels of digital transactions, supported by cutting edge infrastructure and sophisticated domestic consumers. It said to remain stand out markets, these countries must continue to fast-track innovation.
While the watch out trajectory zone is where the countries face challenges, but with a combined population of 2.5 billion people, they represent significant opportunities for investment. Indonesia, Russia, Nigeria, Egypt, and Kenya are examples.
