It is an index developed by Cisco in conjunction with Gartner Research, which measures the digital readiness of 118 countries, including 19 in Latin America.
We are immersed in a world where technological advancement is a constant that can change the way we do business and the lives of a society. Moreover, digitalization is a key aspect that allows countries to maintain global competitiveness, increase GDP, foster innovation and create new jobs, but how prepared are countries to venture into this challenge?
This question gave rise to Cisco's Digital Readiness Index, which measured the digital readiness of 118 countries, 19 of which corresponded to Latin America. In general, our countries are at a basic to intermediate stage of digital readiness.
For each country, the digital readiness score was calculated based on seven integral components critical to creating an environment of economic opportunity for all in an increasingly digitized world. These seven components are:
Technology infrastructure: landline and broadband subscriptions; Internet servers, network services, estimated IT spending.
Technology adoption: mobile device penetration, Internet usage, cloud services (estimated IT spending)
Human capital: total labour force, adult education rate, education index (years of education), population (0-14 years)
Basic needs: life expectancy, mortality rate (under 5 years), access to electricity.
Ease of doing business: rule of law, logistical and infrastructure facilities, services
Government and Business Investment: foreign direct investment, high-tech exports, government success in promoting IT, strength of legal rights, time required to start a business, availability of capital.
Using a data-driven approach, three stages of digital readiness emerged: Activate (the lowest stage of digital readiness), Accelerate (countries in the intermediate stage), and Amplify (those in the highest stage of digital readiness).
According to the study, the average for Latin America was 11.78. The global average for digital readiness is 11.96. The global digital readiness scores for countries in the highest stage (Amplify) averaged 16.83. Those in the middle stage of digital readiness (Accelerate) averaged 12.49, and those in the lowest stage of digital readiness (Activate) averaged 7.91.
Countries in the Activate stage are just beginning their digital journey and include many countries in Africa and some in the Middle East and Asia. Countries in the Accelerate stage scored in the mid-range, with some component scores that have room for improvement. Countries in this intermediate stage include many in Latin America, Eastern Europe and some in Asia. Countries in the Amplify stage, the highest stage of digital readiness, include the United States, many countries in Western Europe and some in Asia, such as Singapore, Japan and Australia.
Important Findings
From this research, a relationship was discovered between a region's digital readiness and that region's GDP per capita. These indices reveal which countries are highly digitally ready and which are less so, highlighting opportunities for local governments, industry, educational institutions, and community organizations to work together and collaborate to increase digital readiness.
This study revealed that different specific activities, investments and interventions are needed depending on a country's stage of digital readiness, as follows:
Countries beginning their digital journey (the Activate stage) would benefit primarily from interventions focused on improvements in basic human needs and human capital development, especially the growing fundamental knowledge of IT.
Countries in the intermediate stage (Accelerate) would benefit most from human capital development, basic improvements in human needs, and advances in the ease of doing business in that country.
Countries at the highest stage of digital readiness would benefit most from human capital development, especially a focus on emerging and specialized technology skills.
Methodology
For this report, Cisco, in conjunction with Gartner, developed a model to measure the digital readiness of countries and uncover key interventions that can help states move toward digital readiness. This holistic model can also be applied at regional and state levels using corresponding metrics.
To have comparable scores in each country, it was essential to use standardized data points available for each. Using the seven components, each country received a score based on standardized data points from reputable sources, such as the World Bank, World Economic Forum, Gartner and the United Nations, and summed to create an overall digital readiness score.
Supporting Quotes
"As we understand how technology is rapidly changing work and our daily lives, we can better leverage it to maximize social inclusion. We believe Cisco has a role to play in this field and, as a company, we hope to serve as a catalyst to drive an inclusive digital economy," said Gabriel Calgaro, general manager of Cisco Chile.
"By devising a common language and a comprehensive model to measure a region's digital readiness, we hope to better understand how we can support students, workers and entrepreneurs, but also help shape entirely new ideas and industries to drive the digital economy and create the jobs of the future," Tae Yoo, SVP Corporate Affairs/Corporate Social Responsibility at Cisco.
"Given the pace of technological change, we believe it is important to understand and anticipate what this means for youth and society at large, so that everyone has the opportunity to participate in our increasingly digital economy and interconnected world," added Tae Yoo.
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