Lausanne / Emirates Business
The second edition of the IMD World Digital Competitiveness Ranking 2018 saw a slight improvement in the global ranking of the UAE, allowing it to reach 17th place, and lead its Arab neighbours in the report.
The IMD World Digital Competitiveness Ranking 2018 studies 63 economies. This year the majority (29) of countries in the study experienced an improvement in their level of digital competitiveness. About 40% of the sample (26 countries) show a decline while only eight economies remain in the same position. These changes are not geographically focused. Improvements and declines occur across continents.
The UAE’s improved ranking in digital competitiveness comes as a result of the country’s continued developments and increase adoption of digital strategies in various projects and initiatives implemented across UAE.
The country ranks first globally in Business Agility, a subfactor of the “Future Readiness” indicator, and 3rd globally in Regulatory Framework, a subfactor of the “Technology” indicator. The UAE also ranks 4th globally in Talent, a subfactor for the “Knowledge” indicator. All of which are major factors in the application and widening of the use of digitalization and in determining a country’s future readiness, which in turn reflects on the way we work, live, and the way we do business.
Professor Arturo Bris, Director of the IMD World Competitiveness Center, notes that, “The UAE improves its overall digital ranking in 2018, to reach 17th place. Although this is a slight increase, we see some good performance in various sub-factors included in the report. By strengthening aspects related to Scientific Concentration and Training & Education the UAE ranking will improve in the long-term.”
“In Business Agility and Regulatory Framework, the UAE ranks high. These two sub-factors are crucial for improving digital competitiveness”, he added.
Globally, despite challenge from Asia, “The West” leads in digital – US, Canada and seven European countries in top 10. The USA leads the IMD World Digital Competitiveness Ranking, followed by Singapore, Sweden, Denmark and Switzerland. Rising from the 3rd spot, the USA overtakes Singapore and Sweden to top the ranking.
Regionally, the IMD World Digital Competitiveness Ranking 2018 shows a pronounced gap in the digitalization of the region. The UAE is the highest-ranking country (17th) in the region, it slightly improves (one ranking) mainly due to progress in all components of the technology factor in particular in the technological framework sub-factor.
Results show that several countries are experiencing an “adaptive imbalance” or a mismatch between high levels of training and education, and the attitudes toward embracing digitalization; among these economies, we note Austria, Malaysia and Russia. For instance, while in training and education Austria ranks 7th and Russia 12th, their performance in embracing new technologies (25th and 39th in adaptive attitudes) is relatively low.
In the overall ranking, Singapore drops from 1st to 2nd position. It reaches 1st place in the knowledge and technology factors, and 15th in future readiness. Seemingly, despite Singapore’s high level of training and education, and an environment conducive to digitalization, society’s attitudes toward the adoption of technologies and the agility of business to take advantage of digital transformation, are relatively low (20th and 18th respectively).
In 3rd place dropping from 2nd, Sweden shows a balanced scorecard. At the factor level, it ranks 7th in knowledge, 5thin technology and 5th in future readiness. The rather low performance in some of the knowledge components may be at the core of Sweden’s decline in the ranking. It ranks 20th in higher education achievement (down from 18th) and 23rd in the percentage of graduates in sciences (down from 20th).
Denmark improves its overall digital position from 5th to 4th. It ranks 8th in knowledge, 10th in technology and 1st in future readiness. The country boosts its performance (or remains stable) across eight of the nine sub-factors only dropping in adaptive attitudes (from 1st to 5th). Its highest rank is in training and education (3rd) and its lowest in capital (22nd).
Switzerland joins the top five reaching 5th place from 8th. This improvement comes on the back of an advancement in the future readiness factor, increasing from 13th to 10th place. The country, however, experiences some declines in the knowledge and technology factors (from 4th to 6th and 8th to 9th, respectively). Norway, Finland, Canada, the Netherlands and the United Kingdom complete the top 10.
Introduced for the first time in May 2017, the ranking quantifies the rapid technological transformations that countries are undergoing, providing a tool for decision-makers in the public and private sectors to interpret and address these changes.
The objective of the digital competitiveness ranking is to assess the extent to which a country adopts and explores digital technologies leading to transformation in government practices, business models and society in general. In addition it provides firms the ability to find better opportunities to strengthen future value creation. The ranking draws upon 50 selected indicators divided into three factors: Knowledge, Technology and Future Readiness. The knowledge factor refers to intangible infrastructure, which underlines the process of digital transformation through the discovery, understanding and learning of new technologies. The technology factor assesses the overall context through which the development of digital technologies is enabled (technology-friendly regulation, availability of capital for investments and the technological infrastructure). Finally, the future readiness factor examines the degree of technology adoption by government, business and society in general.
‘Hard’ data such as number of patents grants in high-tech sectors and smartphone usage are weighted twice as much as the ‘soft’ data from our Executive Opinion Survey that measures the business perception of issues such as technology regulation and use of big data and analytics in companies.
The IMD World Competitiveness Centeris a research group at IMD business school in Switzerland with 30-years of research expertise in the field of country competitiveness.
On June 20, the IMD World Competitiveness Center will present the IMD World Digital Ranking 2018 on the occasion of the Digital Competitiveness Summit 2018, hosted at IMD with digitalswitzerland. IMD became a member of digitalswitzerland in February 2018.