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Insead global technology report highlights on-going digital divide and economic implications

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Insead, the leading international business school, and the World Economic Forum (WEF), have released the 12th annual Global Information Technology Report (GITR) with the support of Booz & Company and CISCO. The new study focuses on 'Growth and Jobs in a hyper connected World'.

The report assesses the digital ecosystems of 144 developed and developing countries – accounting for more than 98 per cent of the world’s GDP. By ranking each nation using the Networked Readiness Index (NRI), the study examines how these markets leverage advances in information and communication technologies (ICT) to drive economic productivity and social development.

GITR analyses various factors, including network infrastructure, affordability, and related 'knowledge' skills, to determine which nations are moving ahead, stagnating, or falling behind with respect to the digital tools crucial to competitiveness. It takes into account numerous factors, including a country’s market and regulatory framework in support of ICT uptake.

Researchers found that policies in some developing economies are failing to capitalise on ICT investment, while Europe also is faced with ICT challenges that threaten its competitiveness, innovation and job-creation capabilities.

'Our 2013 study reveals significant disparities and persistence in the ‘digital divide’ separating top performers and those still struggling to close the ICT and skills gaps,' said Bruno Lanvin, GITR co-editor and executive director of Insead European Competitiveness Initiative (IECI).

'Our analysis shows how matching investments in ICT with investment in skills and innovation can help economies cross a threshold, beyond which return on investment increases significantly.'

The report’s key findings include:

  • Finland, Singapore and Sweden lead the NRI;
  • To re-establish its competitiveness, the European Union must invest in a major upgrade to its fixed and mobile telecommunication network, a cost estimated at €250 to €320 billion. Failure to do so risks losing telecommunications leadership to the U.S. and Asia, where 4G mobile subscriptions already far outpace those in Europe;
  • Most developing economies are failing to create the conditions needed to close the ICT-related competiveness gap against advanced economies;
  • BRIC economies must address weaknesses in their digital ecosystems to ensure sustained productivity gains and future growth;
  • Despite progress, Latin America and the Caribbean still face connectivity challenges;
  • More apparent is the digital divide in Sub-Saharan Africa, where ICT usage remains very low, even as nations there continue to build ICT infrastructure;
  • In the Middle East and North Africa, ICT investment and use is sharply divided, with Israel and several Gulf Cooperation Council states dramatically increasing ICT investment and performance, while other regional nations have faltered; and
  • 'Big Data' is a new asset class with potential to revitalise the global economy and strengthen social cohesion. Broadband (especially mobile broadband) is the foundation to unlock this potential.