Picture it. It’s year 2025. It’s a typical Wednesday night. You picked up some ground beef on your way home from the gym. Eating beef is always nostalgic. You remember the old days when beef came from a cow. These days, it’s grown in a lab – made from animal cells.
After dinner, you have some fun interacting with your mixed reality entertainment system. Your friend calls. Your phone and your connected things instantly talk to each other, and the volume in the room lowers so you can talk easily. Life is good. You and all your IoT devices are happy, healthy and functioning well together.
In another country, on this same Wednesday night, it’s a completely different scene. Since there’s been very little investment in ICT in that country, there’s no 5G and some areas still don’t even have basic Internet connectivity.
With no 5G, there’s no fuel for IoT, self-driving cars or all the mobile applications we take for granted. This country has fallen behind in the digital transformation process, and people are in crisis as they experience the economic and social consequences.
Which scenario will describe your country?
What is causing this digital divide, and why is it getting even bigger?
It’s a complex problem, and one that Huawei hopes to shed some light on in their annual Global Connectivity Index (GCI).
I was introduced to the GCI framework and report in the spring of 2016, I’ve been fascinated with it ever since. Last year when I wrote about the report, my main takeaway was the importance of thinking globally as it relates to digital transformation.
Before studying the GCI and the methodology behind it, I had never been able to completely wrap my head around the global social and economic effects of digital transformation.
I attended Huawei’s Global Analyst Summit in Shenzhen in April. It was just a few days before this year’s annual GCI whitepaper was released. I was lucky to get a sneak peek about the report, and how it was put together.
And just like last year, I couldn’t put the report down once I started studying it. We often talk about digital transformation on a company scale, but what about on a country scale?
This year’s report got me thinking about the process of digital transformation, and how it evolves individually for each country. I began to wonder if the transformation process is more about the technology and the people leading the way – or strategy each country puts into place as they make the shift.
One thing is for sure, digital transformation proves again and again that it’s a pillar of disruption, innovation and economic growth.
(Jessica Song, Huawei GCI Project Manager, explained the methodology to KOLs)
What is the Global Connectivity Index (GCI) exactly?
In Huawei’s words:
The GCI was created to analyze a broad spectrum of indicators for ICT Infrastructure and digital transformation to provide a comprehensive map of the global digital economy.
Most countries have begun the journey towards a digital economy, but they are at different stages in the process.
The GCI is a whitepaper that benchmarks 50 countries according to their progress in the digital transformation process. It measures the relationship between ICT investment and GDP growth. The 50 countries included in the report make up 90% of global GDP.
The methodology behind the ranking system is complex (and I’ll explain it next). The idea is that each country can look at this report to see how they are ranked and why, which will help them find areas where they can improve upon their strategy.
This report allows countries to reflect on their priorities and commitment to digital transformation. This line of thinking aligns with Huawei’s core value of self-reflection.
Understanding the GCI Methodology Matrix
Before delving into this report, it’s important to understand the GCI methodology matrix.
A country’s investment in ICT tech is directly correlated to a nation’s economy, digital competitiveness and future growth. Therefore, the GCI matrix consists of 4 economic pillars by 5 technology enablers. These are used along with 40 indicators to determine a country’s score.
The 4 economic pillars are supply, demand, experience and potential. The 5 technology enablers are IoT, big data, cloud, data centers and broadband. You can see the scoring model below.
All of these things are interrelated. For example, the real payoff of broadband comes with cloud adoption, and broadband fuels it all. In other words, all of these pieces fit together to create the picture of ICT, and the path towards digital transformation.
Along the 5 technologies stack, cloud is a potent catalyst, and the gateway to big data and IoT.
When you look at these economic pillars and technology enablers graphed with the 40 indicators, it all becomes clear.
What does all this mean and why does it matter?
Are you familiar with the Matthew Effect?
The Matthew Effect is a phenomenon sometimes summarized by saying “the rich get richer and the poor get poorer.”
The countries in the GCI report are divided into 3 clusters based on their score. Those clusters are frontrunners, adopters and starters. The 2017 report shows 16 frontrunners, 21 adopters and 13 starters.
There is a disturbing inequality among these 3 clusters which remains a prominent issue.
The inequalities between countries has widened since the first GCI report in 2014. The digital divide is becoming a digital chasm.
What can be done to lessen the gap?
According to Huawei, broadband is the first line of defense against the inequality gap. It’s also important to remember the importance of cloud, and how it opens the gateway to Big Data and IoT.
As Keven Zhang, President of Huawei Corporate Marketing, recently said:
To stay competitive, nations at an early stage of digital transformation will need to prioritize ICT infrastructure development, especially broadband connectivity and cloud adoption.
What are the benefits for a country that chooses to invest in ICT infrastructure?
As I’ve already mentioned, the social and economic benefits for a country that invests in ICT infrastructure is big. Huge. Let’s quantify that…
Increasing ICT infrastructure investment by 10% annually can have huge returns by 2025. Having said that, every additional US$1 invested in ICT infrastructure, over time, can yield up to US$5 return in GDP by 2025.
In the GCI whitepaper, you can look at your country and see how “the multiplier effect” works. You can also read case studies of this tangible change through ICT.
So who are the current frontrunners?
You can click over to the GCI website (linked below) to see all 50 countries ranked, but I snapped a pic of the top 10 for you to see here.
If you’re interested in learning more about the global shift to a digital economy, please click over to Huawei’s GCI website. You can get more detailed info about everything I’ve written about and even download the whitepaper.
If you follow this report annually like I do, remember, even a one-point increase in GCI score from year to year can have a positive impact on real life events.
I saw in the whitepaper that the world’s GCI score has increased 4 points since the 2015 report. That means the digital economy is moving quickly globally.
I hope you enjoy this year’s GCI as much as I did. After you have a look at it, I’d love to know your key takeaways. Please leave me a comment below and I’ll be sure to get back to you. Digital transformation is one of my fave topics to talk about. Thank you for reading my post!
Photo credit: Diana Adams / Huawei
Source: Author participated in the presentation.
Editorial notice: This post has been sponsored.