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Seven Countries Emerging as Frontrunners in the Fourth Industrial Revolution

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Finland, Switzerland, Sweden, Israel, Singapore, the Netherlands and the United States are leading the world when it comes to generating economic impact from investments in information and communications technologies (ICT), according to the World Economic Forum’s Global Information Technology Report 2016.

 

On average, this group of high-achieving economies at the pinnacle of the report’s Networked Readiness Index (NRI) economic impact pillar scores 33% higher than other advanced economies and 100% more than emerging and developing economies. The seven are all known for being early and enthusiastic adopters of ICT and their emergence is significant as it demonstrates that adoption of ICTs – coupled with a supportive enabling environment characterized by sound regulation, quality infrastructure and ready skills supply among other factors – can pave the way to wider benefits.

The breakaway of these seven economies is significant for other nations given the role that networked readiness is likely to play as the world transitions to the Fourth Industrial Revolution. The Global Information Technology Report 2016 finds high levels of confidence among business leaders that capacity to innovate is increasing, which suggests that other nations, too, could start to see more economic and social impact from ICT. However, on a cautionary note, the NRI data also suggest that individuals are driving ICT adoption much more enthusiastically than either governments or business, where no clear trends are discernible across regions since 2012.

Who leads the Networked Readiness Index in 2016?

The 2016 edition of the NRI finds Singapore as the highest-placed country in the world when it comes to networked readiness. Finland, which topped the ranking in 2014, remains in second place for a second year in a row, followed by Sweden (3rd), Norway (4th) and the United States (5th), which climbed two places. Making up the rest of the top 10 are the Netherlands, Switzerland, the United Kingdom, Luxembourg and Japan.

While the upper echelons of the NRI continue to reflect a strong correlation between networked readiness and per capita income, roughly 75% of the countries included in this year’s index show a score improvement in 2016. However, convergence both at the global and regional level remains elusive, with four regions – Eurasia, Emerging Europe, the Middle East, North Africa and Pakistan (MENAP) group, and sub-Saharan Africa – having widened the gap between the most and least networked-ready since 2012.

Elsewhere in the NRI, of the large emerging markets, Russia remains unchanged at 41st position. China comes next, moving up 3 places to 59th. South Africa improves markedly, climbing 10 places to 65th, while Brazil partially recovers from a previous downward trend to 72nd this year and India drops two places to 91st.

Europe remains at the technology frontier; seven of the top 10 NRI countries are European. Yet the performance range is wide, with Greece dropping four places to 70th position and Bosnia and Herzegovina closing the group at 97. Several Eastern European countries, notably the Slovak Republic, Poland and the Czech Republic, are making big strides, landing spots in the NRI top 50. Better affordability and large improvements in economic and social impacts are making major contributions to this success. Italy is another notable mover this year, improving 10 places to 45th position as the economic and social impacts of ICT are starting to be realized (up 18 in the global impact ranking).

The Eurasia region continues its upward trajectory, with the average NRI for the region increasing significantly since 2012. In particular, it is notable that the improvement is observed across all four elements that make up the index: environment, readiness, usage and impact. The region is led by Kazakhstan, which continues on its positive trajectory of recent years to land in 39th position.

Malaysia leads the Emerging Asian economies in 2016 and moves up one spot to 31st position overall. The country continues to perform strongly, supported by a government which is fully committed to the digital agenda. The top five in the region in terms of overall ICT readiness remain Malaysia, Mongolia, Thailand, China and Sri Lanka as in 2015. The group of Emerging Asian countries has been moving up and converging since 2012. Individual usage in the region is still one of the lowest in the world, but has been growing strongly in recent years.

The performance range by countries in the Latin America and Caribbean region remains widely dispersed with almost 100 places between Chile (38th) and Haiti (137th). There was no clear trend from 2015 to 2016 in terms of relative performance, with Chile and Haiti staying put and, of the remaining group, half of the countries improving their ranking and the other half dropping. Considering the absolute NRI score, however, the region has been moving up and converging since 2012. In order to foster the innovation forces that are key for thriving in the digitized world and the emerging Fourth Industrial Revolution, many governments in the region will urgently need to reinforce efforts to improve their regulatory and innovation environments.

The United Arab Emirates (26th) and Qatar (27th) continue to lead the Arab world in networked-readiness. In addition, the MENAP region (Middle East, North Africa and Pakistan) is home to two of the biggest movers in this year’s ranking: Kuwait (61st, up 11) and Lebanon (88th, up 11). In both cases, individuals are leading the charge, with the business sector catching up and strongly contributing to the successful performance. While governments are lagging behind in terms of digital adoption (Kuwait, 81st; Lebanon, 124th), the business community in both countries is registering an increased weight on ICT in government vision and efforts to improve the regulatory environment.

The NRI also sees several sub-Saharan African countries among the top upward movers, including South Africa (65th, up 10), Ethiopia (120th, up 10) and Côte d’Ivoire (106th, up 9). Leadership, in terms of digital adoption, is coming from different groups of stakeholders. While efforts are very much government-driven in Ethiopia and Côte d’Ivoire, the business sector is providing the most momentum in South Africa. The largest barriers to tackle for Côte d’Ivoire will be infrastructure and affordability; reversing the trend of a deteriorating business and innovation environment for South Africa; and boosting individual usage and skills for Ethiopia.

“The digital economy is an essential part of the architecture of the Fourth Industrial Revolution. In order for digital technology to continue contributing economic and social impact, societies need to anticipate its effects on markets and to ensure a fair deal for workers in digitized market environments. New models of governance will be key in this,” said Richard Samans, Head of the Centre for the Global Agenda, Member of the Managing Board, World Economic Forum Geneva.

“Cross-border data flows drive innovation and growth,” says Pastora Valero, Vice President of Government Affairs, Cisco. “The countries and companies innovating most prominently know that it is the free flow of ideas and information, which leads to improvements in processes and products. Initiatives to foster the free flow of data are crucial to supporting the global nature of the data economy.”

“Measuring the economic and social impact of the digital economy is important for making appropriate policy decisions in both developed and developing economies. The Networked Readiness Index is a valuable tool for helping public and private sector leaders in leveraging the potential of technology.” – Soumitra Dutta, Cornell University.

‘ “Digital” is not just about technology. It is a state of mind, and the source of new business models, new consumption patterns, new ways for business and individuals to organize, produce, trade and innovate. In the global game of digital innovation, the performance and progress made by emerging economies such as Singapore, the United Arab Emirates or South Africa for example are remarkable: they may hold the promise of even more spectacular improvements in the ways digital technologies will be harnessed to competitiveness, growth and social progress in the coming years.’ – Bruno Lanvin, INSEAD.

In addition to providing insights into countries’ performance in the unfolding digital revolution, the report notes a number of trends across ICT adoption in 2016:

How much innovation is “digital”? As the global economy becomes increasingly digitized so, it would seem, innovation is becoming much less defined in a narrow technological sense. For example, while the report finds business model innovation on the rise in more than 100 countries, it also finds stagnation in the Business Usage pillar. This would suggest that while innovation is a top priority for many businesses, they are still missing out on opportunities for greater impact through ICT adoption.

Patents are declining as a measure of innovative capacity: While the minds of business executives around the world are increasingly focused on innovation, traditional measures for innovation such as the number of patents registered are telling a smaller and smaller part of the story. This may be related to the fact that the current transformation is nurtured by a different type of innovation, increasingly based on digital technologies and on the new business models it allows.

The ICT infrastructure gap remains a chronic challenge and is getting wider: Of the 12 pillars of the report, infrastructure is the one where improvement is least pronounced. Worse, since 2012 the lowest-ranked countries have been reporting a deterioration in their infrastructure in absolute terms. Infrastructure is a key determinant of a nation’s ICT-readiness alongside affordability and skills, acting as a gateway to increased usage and ultimately economic and social impact.

Social impact needs new momentum in important areas but is picking up overall: While the social impact pillar of the NRI has seen positive change overall since 2012, most regions register a decline in one of its important components, the impact of ICT on government efficiency. Another important social impact indicator, ICTs and access to basic services, is starting to recover in 2016 after years of decline. This suggests that more people are feeling the benefits of online access to healthcare, finance, insurance and other services. Social impacts on the whole rose most strongly in the group of high-income countries over the year.

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Electric Vehicle Revolution Will Slash Travel Costs in Cities

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Autonomous and shared mobility, digitalization and decentralization of energy systems require new approaches to electric mobility, according to the World Economic Forum’s report Electric Vehicles for Smarter Cities: The Future of Energy and Mobility.

The report, produced in collaboration with Bain & Company, examines the major trends affecting the transformation of energy and mobility systems, with a special focus on cities. In this context, it considers electrification, decentralization and digitalization of the energy system, along with the shift towards shared mobility and autonomous driving.

The report calls for the urgent integration of urban-energy-mobility patterns to accelerate the ability of cities to meet climate goals, support energy efficiency and foster innovation of services and infrastructure. Combined, these could dramatically increase productivity and generate economic growth, ultimately providing great benefits to citizens.

In the US alone, achieving the transformation will quadruple value for society by 2030, a gain that could be worth up to $635 billion. As the share of journeys made by electrified vehicles increases, the energy system will see:

  • A reduction in cost per mile of up to 40% as a result of increased use of electrified autonomous vehicles (AV)
  • Additional flexibility for energy system management as electrified non-AV and AV fleets of public, commercial and mobility-as-a-service vehicles connect to smarter charging and ancillary services
  • Lower carbon emissions driven by increased use of solar and wind energy to meet demand for the electricity required to power electric fleets

Cities leading the charge on electric vehicles

Berlin, Germany: The EUREF Campus business park hosts technology companies and research institutions, and offers charging stations for electric vehicles (EVs) as well as inductive charging for fleet operation. Its microgrid uses artificial intelligence to optimize EV charging and send energy surplus back to the grid, based on dynamic pricing.

Buenos Aires, Argentina, Montreal, Canada and Santiago, Chile: Have all prioritized the electrification of public transport through the public procurement of electric buses.

Dortmund, Germany: The city is developing non-financial incentives for last-mile delivery companies to electrify their fleets: EVs receive permission for extended access to the city centre.

Guangzhou, China: The city plans to speed up bus electrification and aims to reach 200,000 new units in 2018. China’s government has also announced it will develop national regulations for testing AV on public roads in cities across the country.

Hong Kong SAR: The local government encourages developers to scale-up the EV charging infrastructure. This includes solutions integrated with the smart payment system, Octopus, which is also used to access the public transport network.

Los Angeles, USA: The Los Angeles Police Department (LAPD) decided to switch 260 fleet vehicles to EVs. Charging infrastructure development is also under way and being integrated with decentralized solar power generation. By leasing rather than buying vehicles, the LAPD can invest in charging stations, including fast-charging stations in city centre car parks.

London, UK: The Transport for London office requires all new black cabs to be electric or emission-free, and diesel vehicles will not be permitted in London by 2032. A total of 80 charging points will be dedicated to black cabs, with plans to implement 150 by the end of 2018 and 300 by 2020.

Oslo, Norway: The city plans to have its fleet of 1,200 public vehicles using electricity by 2020, has introduced restrictions on cars entering the city centre and granted access to priority lanes for shared EVs only. A project in Vulkan on the city’s outskirts demonstrates a public-private cooperation model between the city, a utility company and a real-estate firm for smart charging stations.

Paris, France: The region of Ile-de-France and private partners developed Autolib, an electric car sharing service with 4,000 EVs and 1,100 charging stations with more than 6,200 charging points across the region, accessible to service users and other EV owners.

San Francisco, USA: The Department of Motor Vehicles provides licences to test driverless cars on public roads in the Silicon Valley as part of an experimental programme.

Recommendations for action
The report gathers and analyses practical examples and best practices, which can be tailored to local specificities. The principles – required for action by both public and private sectors – and their corresponding recommendations are described below.

Take a multistakeholder and market-specific approach: A comprehensive approach to electrification of transport will require engagement of stakeholders from different industries and sectors and may vary significantly across different markets based on the local energy mix or mobility patterns.

Prioritize high-use vehicles: The shift of the approach to transport electrification, through advancing and reforming regulation, should prioritize high-use vehicles, such as fleet and autonomous vehicles. The goal is to accelerate the electrification of miles to maximize the value creation.

Deploy critical charging infrastructure today while anticipating mobility transformation: In the context of mobility and energy systems transformation, planning charging infrastructures is critical to cope with the risk of stranded assets as well as ensure the sustainable implementation and use of the charging stations and hubs.

“The convergence of mobility and energy strategies can magnify the economic and social benefits of electric mobility in cities, and ensure increased sustainability, reliability and customer choice”, explains Roberto Bocca, Head of Energy and Basic Industries, Member of the Executive Committee, World Economic Forum.

“Autonomous vehicles and grid edge technologies are around the corner, and cities, in particular the smartest ones, will deploy them at rapid pace. The mobility and energy players should start building strategies and business models now to embrace these changes and leverage them for sustainable and profitable growth”, added Joseph Scalise, who leads the Americas Utilities and Alternative Energy Sector at Bain & Company.

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Leverage the Digital Future for Prosperous Communities

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Sharing the benefits of growth and embracing the digital economy were key themes for senior Asia-Pacific business leaders meeting in Auckland, New Zealand this week.

At its first of four meetings for 2018, the APEC Business Advisory Council (ABAC) welcomed the forecasts for strong regional growth, noting the IMF prediction that Asia-Pacific GDP would expand by 5.4% this year, far outstripping the rate of 2% in advanced economies.

“Growth is clearly an essential but not a sufficient condition for secure and prosperous communities,” said ABAC Chair for 2018, David Toua. “We need to look closely at our economies’ policies to ensure that people can actually take advantage of the opportunities that growth brings. Harnessing inclusive opportunities is a key mantra for this year,” added Mr Toua.

Mr Toua explained that a second big focus was the digital economy. “We have created a new working group to focus specifically on digital and innovation issues,” Mr Toua explained. “The digital economy is growing exponentially. We are seeing a surge of disruptive business models. Even in traditional sectors like agriculture and manufacturing, innovative technologies, digital services, fintech and e-commerce are now central.

“Importantly, the digital economy provides a springboard for small business, women and other disadvantaged groups to take part in trade and connect around the region.

“But we cannot realise the full potential of a ‘Digital Asia-Pacific’ without putting resources and energy into countering the digital divide that risks leaving the most vulnerable behind. In all economies, we also need to nurture a future-ready workforce. That means putting in place the right settings for digital infrastructure, skills and education, and region-wide digital business- friendly regulation,” said Mr Toua.

ABAC members had welcomed the recent conclusion of the Comprehensive and Progressive Trans-Pacific Partnership by 11 APEC economies, Mr. Toua noted that “the agreement was seen as one of the key ‘pathways’ to an eventual integrated Free Trade Area of the Asia Pacific.”

Other priorities discussed included improving connectivity; structural reform especially in the services sector; reducing trade and investment barriers; facilitating creating opportunities for micro, small and medium enterprises; strengthening financial systems, and grappling with issues around sustainable growth such as food and energy security. “Big strategic considerations we will look at include ‘smarter globalisation’ so that the benefits are more widely shared in terms of jobs and living standards, and our ‘Vision’ for the region in the coming decades,” said Toua.

“Our Auckland meeting was also the occasion for our annual Dialogue with APEC Senior Officials. We had extended discussions including on the APEC Post 2020 Vision which will help both sides to develop robust policy approaches on all our key issues for the period ahead,” concluded Chairman Toua.

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Open Internet and quality of information: key to preserve integrity of elections

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© UNESCO

On 8 February, UNESCO and the Global Initiative Network (link is external) (GNI) held a forum at UNESCO HQ in Paris to examine how Internet could support electoral integrity, as well as counter threats such as disinformation and internet shutdowns which reduced the trust and knowledge of voters.

The Colloquium “Improving the information ecosystem to protect the integrity of elections” brought together UNESCO Member States, UN Representatives, national electoral authorities and media organizations with board members of the GNI.

The GNI is a multi-stakeholder organization of information and communication technology companies, civil society organizations, academics, and socially responsible investors.

In his opening remarks, Mr. Getachew Engida, UNESCO Deputy Director spoke about preserving freedom of expression and the value of effective self-regulation in regard to problems on the Internet in times of elections.

Ms. Judith Lichtenberg, Executive Director of the GNI, underlined the need to forge a common approach to protect freedom of expression online especially during elections time when ICT innovations are being abused by malicious actors and internet services are restricted or even shut down.

Participants addressed issues concerning digital manipulation of election processes, including the impact of malware attacks. Furthermore, the Colloquium also sought to assist electoral assistance providers in contributing with ideas on how to improve their electoral programs and activities.

The potential sensitivities around interruptions of digital information during vote counting, and the difficulty of monitoring the “black box” of political advertising based on datamining and targeted profiling, were highlighted by Patrick Costello, Head of Division of  European External Action Service at the European Union.

Noting the varying degree of digitalization of electoral processes across countries, Simon Pierre Nanitelamio, Deputy Director of the UN’s Electoral Assistance Division, highlighted the role multi-stakeholder consultation to bridge the gaps between differently equipped countries.

In a context where economic growth depends increasingly on Internet access, as affirmed in the UN Sustainable Development Agenda, Constance Bommelaer, Senior Director of The Internet Society ISOC, pointed out that shutdowns can cause long-lasting and costly effects on societies and on user’s trust.

Large-scale internet shutdowns and the blocking and filtering of online content has been seen to be on the rise in the last five years, as noted in the latest edition of the World Trends in Freedom of Expression and Media Development

Internet providers’ difficult position to cope with internet shutdowns during elections was highlighted by Yves Nissim, Head of Transformation and Operation in Corporate Social Responsibility from Orange. Mr He commented that companies are frequently unable to avoid demands to interrupt services because of license agreements and risks to their employees’ safety, but they sought to be transparent about receiving such demands.

Fernando Garcia, Executive director of Red en Defensa de los Derechos Digitales a Mexican-based network that defends digital rights and Aiste Zilinskiene, Member of the Central Electoral Commission of Lithuania, drew upon citizen digital experiences to hold political actors accountable via elections. They also raised awareness about the threats to privacy posed by malware attacks surveilling journalists and human rights activists.

Nana Gyan-Apenteng, head of Ghana’s National Media Commission and chair of the African Communications Regulation Authorities network signaled the potential to apply electoral laws to media at the point where social media content emerged onto traditional media platforms.

The UNESCO-GNI Colloquium also featured together representatives from technology companies to discuss what can be done to enhance the quality of public information during such elections in order to counter misinformation.

Steve Crown, Microsoft’s Vice President and Deputy General Counsel, pointed out the moral challenges around setting national or regional regulations given the global nature of internet and the potential for legislation to be implemented as censorship.

Ludovic Peran, Policy and Government Affairs Manager of Google, shared the company’s initiatives to address fake news, such as the development of fact-checking tools, quality guidelines and the tracking of misleading sources. Meanwhile, Andy O’Connell, Public Policy Manager of Facebook stated that his company had pledged transparency in paid political advertising.

He also noted Facebook’s work to limit the economic incentives of “fake news”, and to remove accounts with false profiles.

The importance of strengthening media and information literacy as part of voter education, was raised by. Divina Frau-Meigs, UNESCO Chair Savoir Devenir, Nouvelle Sorbonne, Paris. She said there was a need to teach young people that casting a ballot was not the same as “liking” something on social media, and encouraged “digital citizenship” as a way to boost the integrity of elections.

UNESCO hopes to follow up through highlighting the incompatibility of Internet shut-downs with the free flow of information that is needed for elections.

The Organisation will also seek to work on methodologies that can benefit election stakeholders who monitor electoral communications, to provide a knowledge base for policy on regulation and self-regulation.

Further work will entail training journalists to be able to give deeper coverage of the role of social media in relation to polls, including ways to find and rebut disinformation online.

Another follow up is promoting the value to election integrity of programmes in media and information literacy.

The over-regulation of digital electoral communications that can disproportionately limit freedom of expression and privacy, is an area where UNESCO can play a monitoring role.

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