Few can question Asia’s commitment to digital transformation. East Asia’s leading technology nations, including Japan, South Korea, and China, have consistently produced great technology companies. The Korean company Samsung continues to lead the world in mobile technology, and the Japanese company Sony has emerged as a global leader in gaming. China has produced a host of leaders in the digital economy including Tencent, Xiaomi and Alibaba to name a few. More recently, India has emerged as a digitalisation leader on the back of India Stack – a unique national public digital infrastructure that facilitates the democratization of digitalization through an open model of private partnerships. Prime Minister Modi highlighted the ‘India Stack’ project during the recently concluded G20 summit in New Delhi as a unique contribution of the country to the world.
However, despite the widespread commitment by many economies in the East to a more digitally intensive future, they are falling short of their Western counterparts.
Our latest Network readiness indicator This is confirmed by the report, which assesses 134 economies based on a wide range of factors related to their readiness to harness the benefits of a networked digital economy. The United States finds itself in first place for the second year in a row, and European countries include seven of the top 10 countries, and 16 countries among the top 25 countries in the rankings.
In comparison, Singapore and the Republic of Korea are the only economies in Asia included in the top 10 – with only two of five from the Asia-Pacific region ranked among the top 25 economies. For the second year in a row, Singapore ranked second globally, and the Republic of Korea rose two places from last year, from ninth to seventh place. Meanwhile, China continues to march forward, this year earning a place among the top 20 countries (ranked 20th) due to its sheer technological prowess.
India, which ranks sixtieth in the world, is progressing steadily, and China has outperformed what many would expect from an economy with its income levels. However, this year’s National Research Institute findings underscore a worrying fact: that Western countries continue to lead the way in a world that is becoming more digitally dense every day.
So, what gives Western economies an advantage in the digital economy? The findings of the National Research Institute confirm that technological excellence – although necessary – alone is not sufficient.
Yes, leading Western countries excel in technology. The United States, for example, leads investment in emerging technologies, computer software, and communications services. Likewise, the United Kingdom (10th) made the top 10, partly due to significant spending on computer software. Many Western European countries are also leaders in technological prowess.
However, if it is just a matter of investment, why do economies such as the UAE and Malaysia – both of which have scored well for investing in new technologies – not rank higher overall? It concludes with an important observation: the best-performing NRI economies invest not only in technology, but also in social dimensions such as inclusivity and trust, which are essential for the successful deployment and use of technology resources within the country. Their communities.
The United States, the top performer in future technologies, also leads in cybersecurity and e-commerce legislation. These findings underscore the importance of confidence in the uptake of emerging technologies by companies and governments – areas where many Asian economies fail in global rankings.
NRI also points out that management of emerging technologies in the East remains in the shadow of European countries such as Finland, the Netherlands and Denmark. These countries continue to set global standards in regulation, an area in which China, in particular, finds itself in the bottom half of the rankings. European countries have been better able to implement mechanisms that address issues related to trust, security and inclusion, allowing them to more fully exploit the opportunities offered by the digital age.
In other words, the most networked economies excel thanks to the harmonious integration of people and technology. It has an advanced technology infrastructure, a highly skilled and adaptable workforce, effective governance structures capable of managing digital transformations, and the ability to harness digital technologies to create a positive societal impact.
The West cannot stop continuing to invest in technology. It is trying to catch up with the East in some key technology areas such as semiconductors and solar technologies. Eastern countries such as China, the Republic of Korea and Japan are world leaders in key areas such as robotics density, high-tech manufacturing and high-tech manufacturing.
At the same time, the West must continue to lead in deploying trustworthy and inclusive digital infrastructures in business and society. Recent efforts by governments in the UK and US to better regulate new technologies such as artificial intelligence are moving in the right direction. Investing in skills and upgrading digital capabilities in small and medium-sized enterprises must be a priority for the West.
We know the value of digitalization to the economy: productivity, sustainability, and overall prosperity. This year’s NRI offers us an opportunity to look deeper into the strengths and weaknesses of the economy’s approach to digital transformation and technological success. It is the lens through which we can see what gives Western – and often European – economies a technological edge at a time when digital capabilities are more important than ever.
Professor Soumitra Dutta is co-editor of the Network Readiness Index and Dean of Saïd Business School, University of Oxford.
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