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| Huawei Publishes 7th Annual Global Connectivity Index Report |
A key finding of the 2020 GCI is that the digital transformation of industries will improve productivity, stimulate economic growth, and boost future competitiveness. GCI research has indicated that economies that could improve productivity and go digital with intelligent communication usually enjoy higher gross value added (GVA) per worker or per hour employed.
Proactively, starters are closing the gap with leading economies.
The adjustments to each country's GCI score since 2015 have been evaluated in this study. Since 2015, the average scores of the Frontrunner, Adopter, and Starter economies have all increased, with Starters, led by Adopters and then Frontrunners, showing the highest compound annual growth rate (CAGR). This indicates that Adopters and Frontrunners are catching up with Starters and closing the digital gaps.
The 2020 study has also shown that Starters have made substantial strides in broadband coverage. More than 2.5 times their overall mobile broadband penetration went up, their 4G subscriptions went from 1% to 19%, and their mobile broadband became 25% more accessible. These accomplishments have allowed Starters to provide more robust digital services and to embrace new economic development opportunities. Furthermore, their e-commerce spending has almost doubled to over US$2,000 per person since 2014. Some starters advanced up the GCI cluster, increased their GCI scores by up to 17%, and managed to boost GDP to a 22% higher level than some peers. In 2020, both Vietnam and Peru became Adopter Economies.
Organizations in countries with Frontrunner want to retain IT spending
Research shows that businesses' ability to invest in IT varies depending on where they are located. Organizations favor preserving their IT budgets over non-IT budgets in Frontrunner and Adopter nations. They have also decreased their IT budgets by an average of 2.5 to 3.5 times less than organizations in other countries. To minimize the pandemic's economic effect, to rebound faster, and to ensure the sustainability of their transition into higher-order productivity models, nations with a more advanced digital infrastructure are better placed.
To spur economic recovery and future competitiveness, the digital transformation of economic sectors would help economies develop 'higher-order' productivity.
To achieve a multiplier impact, countries need to make ICT investments based on their particular collection of established factor endowments. In general, economies consist of a mixture of various industries, one or two of which appear to dominate. The GCI 2020 report indicates that the ICT strategy should be designed around the accumulated sectoral strengths of the country. Regardless of the field, more digitalization means more value-added.
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The 2020 release suggested five main stages for the digital transformation of economic sectors for the first time in the GCI report:
Step 1: Productivity of activities. Via basic connectivity and more effective communication, the emphasis is put on monitoring the completion of individual tasks.
Step 2: Efficacy of function. ICT-enabled computerized or automated features make it easier to simultaneously manage several tasks and exchange information more easily.
Step 3: Reliability in the method. More emphasis is focused on digitizing core system functions for successful operations. Enterprises will have a greater demand for connectivity and cloud services at this level.
Step 4: Performance and resilience of the organization. Enterprise processes are digitalized, cloud-based enterprise services are migrated, and all systems are integrated efficiently. High-coverage networks, broad adoption of cloud-based software, and AI and IoT implementation also lead to data collection and insights in real-time.
Step 5: Productivity and stability of ecosystems. The entire ecosystem is digitalized, capable of reacting rapidly to market developments, and can help stakeholders' automated coordination and cross-sector collaboration. Representative innovations such as 5G, IoT, and robotics present new possibilities in developing new business models, working methods, and products.
"As ICT permeates industries, digital transformation has become unanimously agreed on among countries and industries," said Zhang Hongxi, Chief Marketing Officer of Huawei's ICT Infrastructure. "For the first time, we extended our research perspective from the dimension of countries to industries. We also suggested digital transformation paths for countries and enterprises in different stages to help them build future-oriented economic resilience."
GCI reports seek to provide useful feedback to policymakers and economic stakeholders to accelerate the digital economy's growth. The 79 countries assessed by GCI 2020 constitute 95 percent of the world's GDP and 84 percent of the global population.
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