Pakistan needs to improve its digital eco-system for sustained economic growth, Global Information Technology Report 2014, World Economic Forum

Pakistan needs to improve its digital eco-system for sustained economic growth;Global Information Technology Report 2014, World Economic Forum The Global Information Technology Report 2014

The Global Information Technology Report 2014 features the latest results of the NRI, offering an overview of the current state of ICT readiness in the world. This year’s coverage includes a record number of 148 economies, accounting for over 98 percent of global GDP.

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The Global Information Technology Report 2014
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Pakistan ensures technology affordability to businesses and individual consumers, announced by the Global Information Technology Report 2014 of the World Economic Forum (WEF).

At the rank of 111 among 148 countries, Pakistan’s performance has been relatively stable on the Network Readiness Index 2014 of the World Economic Forum (WEF), Pakistan lost 6 ranks as compared to 2013.

Pakistan showed slight improvement on the Business and Innovation Environment pillar by improving in ranking at 101 as compared to 102 last year. Also on the readiness sub-index it improves from 21 in 2013 to 19 this year. The efficiency of legal system in settling disputes has risen from 109 last year to 112 in 2014. Similarly the efficiency of legal system has also deteriorated from 97 to 108 in 2013 and 2014 respectively. 

“One of the key findings of the report is that Pakistan cannot only rely on ICT infrastructure development to become competitive. Rather, the benefits of ICT can only be fully derived when a country implements a holistic strategy aimed at creating conditions for skills, innovation and entrepreneurship to flourish alongside modern infrastructure” said Amir Jahangir, Chief Executive Officer of Mishal Pakistan, a country partner institute of the World Economic Forum.

One of the primary concerns for Pakistan is the lack of data protection laws, this can have medium to long-term impact on the development of a knowledge-based industry fostering innovation and entrepreneurship, a burgeon that Pakistan needs to capitalize due to its demographic potential”, Jahangir further added. 

The Report showed concerns on Pakistan’s human capital development on the skills pillar to improve performance on the network readiness index as the quality of the education system has gone bad to worst i.e. 75 (2013) to 84 this year. An alarming decline in the performance in maths and science education has also been pointed out where Pakistan stands at 104 now from the ranking of 88 in 2013. The report showed serious efforts required by both the public and private sector on the extent of staff training where it has lost 16 points and the country stands at an alarming 128 rank. 

The Global Information Technology Report 2014
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Pakistan has shown improvements in the business and innovation environment pillar, where availability of latest technologies has improved from 83 (2013) to 79 (2014), however, lack of venture capital has dropped 22 points and ranks at 77 this year. Pakistan is also losing its regional competitiveness advantage on doing business indicators, where number of days to start a business ranks at 98 and the number of procedures to start a business at 119 now.      

The report, highlighting the “affordability of technology”, ranks Pakistan as the 10^th most affordable cellular serviced country, where Liberia tops this list while Sri Lanka is at 4^th, Bangladesh at 5^th and India being on 7^th number globally. Pakistan ranks at number 1 on the Internet and telephony competition globally. On monthly subscription charges for fixed (wired) broadband Internet service (PPP $), Pakistan stands on 62 as compared to Sri Lank being the most affordable (among 148 countries), Bangladesh being at 3^rd and India at 4^th in the region.

On the “businesses usage of technology” Pakistan has improved its indicators, where business-to-business usage of Internet has improved from 116 to 104 this year, similarly the business to consumer usage has also gained improvement by securing the position of 103 from 112 last year.

On the government usage of technology Pakistan showed some depressive performance as importance of ICT to government’s vision has gone from 117 in 2013 to 128 in 2014. Similarly, the government in promoting the use of information and communication technologies (ICTs) Pakistan was also weak as this year it ranked at 91 from 77 in 2013.

Little progress is being made in bridging the digital divide between technology savvy nations and others, according to the 13th edition of the Global Information Technology Report 2014. The stalling of progress is worrisome for emerging and developing nations, which are at risk of missing out on many positive impacts information and communications technologies (ICT) bring, including increased innovation, economic competitiveness and greater social inclusion.

In the South Asian region, Pakistan was outperformed by Sri Lank at 76, India 83, Bhutan 94, Iran 104, whereas Pakistan was ahead of Bangladesh at 119 and Nepal 123.

Lower down the Index, many large emerging economies continue to struggle to realize their full digital potential. China (62nd), Brazil (69th) and Mexico (79th) and India (83rd) all drop in the rankings. However, countries that have developed a strong vision to develop their ICT capacity do well, such as the United Arab Emirates (24th), Kazakhstan (38th) or Panama (43rd), which all improved.

With this year’s coverage extending to a record 148 economies, the Global Information Technology Report (GITR) report remains one of the most comprehensive and authoritative assessments of the impact of ICT on competitiveness of nations and the well-being of their citizens.

Published under the theme, “Rewards and Risks of Big Data”, the report’s Networked Readiness Index (NRI) measures the capacity of 148 economies to leverage ICT for growth and well-being. It finds consistency at the top end of the rankings this year, with Finland (1st), Singapore (2nd), Sweden (3rd), the Netherlands (4th), Norway (5th) and Switzerland (6th) all retaining their positions from last year. The United States (7th) continues its upward trajectory, while Hong Kong SAR (8th) and the Republic of Korea (10th) both climb. The United Kingdom (9th) is the only nation in the top 10 to fall.

Network Readiness Index Rankings for 2014:
Global Information Technology Report 2014, World Economic Forum

To measure this, the NRI assesses the preparedness of an economy to fully leverage ICT in terms of:

1. ICT infrastructure cost of access and the presence of the necessary skills to ensure an optimal use 
2. Uptake and use of ICT among governments, business and individuals
3. Business and innovation environment, and the political and regulatory framework
4. Economic and social impacts accruing from ICT

“Over time, the GITR series has become one of the most respected studies of its kind. It is used extensively by policymakers and relevant stakeholders as a unique tool to identify strengths and weaknesses and to define and build national strategies for developing and better leveraging their digital potential,” said Soumitra Dutta, Anne and Elmer Lindseth Dean at the Samuel Curtis Johnson Graduate School of Management at Cornell University and co-editor of the report.

“In addition to the persistent digital divide across countries, governments should also be wary of understanding, identifying and addressing potential internal digital divides so that new opportunities can be created for all and support enhanced social inclusion,” said Beñat Bilbao-Osorio, senior economist at the World Economic Forum’s Global Competitiveness and Benchmarking Network and co-editor of the report.

In this sense, “digital strategies should not focus only on developing the ICT infrastructure, but also in creating the right conditions for an effective use of ICT to boost innovation, competitiveness and higher social inclusion,” said Bruno Lanvin, executive director of INSEAD’s European Competitiveness Initiative (IECI), and of Global Indices projects at INSEAD.

“Nations and organizations need to understand where they stand in terms of a Big Data maturity, assess their progress, and determine what they need to do to extract greater business and organizational benefits from the vast volume of data,” said Bahjat El-Darwiche, partner, Strategy& (formely Booz & Company) and sponsor of the report.

“The Internet of Everything and big data applications are ushering in the next wave of technology innovation,” according to Dr Robert Pepper, vice president of Global Technology Policy at Cisco. "Big data requires big judgment, and the right policies are needed so that the Internet of Everything can deliver on its promise of immense economic and social benefits."

The Global Information Technology Report is the result of a long-standing partnership between the World Economic Forum and INSEAD, and, since last year, with the Samuel Curtis Johnson Graduate School of Management at Cornell University. The soft-data on Pakistan for the Global Information Technology Report is generated by Mishal Pakistan through the annual Executive Opinion Survey. 

The NRI uses a combination of data from publicly available sources and the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the Forum in collaboration with Partner institutes, a network of over 160 leading research institutes and business organizations. This survey of more than 15,000 executives provides insight into areas critical for networked readiness.

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The top 10 countries for embracing IT

Which economies are best placed to benefit from new information and communication technologies (ICTs), bridge the digital divide and extract value from big data?

The Networked Readiness Index (NRI), part of the 2014 Global Information Technology Report: The Risks and Rewards of Big Data, published today, ranks 148 countries for the quality of their digital infrastructure and ability to use ICTs to generate economic growth, foster innovation and improve the well-being of their citizens.

Here is a list of the top 10 economies making the most of the digital age, according to the NRI:

1. Finland tops the rankings for the second consecutive year, thanks to its outstanding digital infrastructure, which the Global Information Technology Report (GITR) says is the best in the world. With more than 90% of its population using the internet, and with high levels of innovation, Finland is reaping the rewards of investing heavily in ICT in the mid-1990s, which it did in response to a financial crisis.

2. Singapore remains in second place in the NRI. Supported by a government with a clear digital strategy, which offers an ICT infrastructure that is relentlessly being improved, and the best online services and highest-quality education systems in the world, this city state has become a knowledge-intensive economy and ICT powerhouse.

3. Sweden stays in third place, reflecting its world-class yet affordable digital infrastructure and stable pro-business environment, despite high tax rates. These strengths have led to outstanding use of ICTs by individuals, businesses and government, as well as one of the highest innovation performances in the world, making Sweden a truly knowledge-based society.

4. The Netherlands also retains its high ranking from the 2013 index. This service-based economy has quickly and skilfully recognized the importance of ICTs in boosting innovation and competitiveness. Information technology permeates all sections of society in the Netherlands, with nearly everyone able to access a computer and home internet connection, and a large number of government services available online.

5. Norway, with a well-developed and affordable ICT infrastructure, sits in fifth place in the NRI. Digital uptake is almost universal among Norway’s population: 95% are internet users and more than 90% have access to a personal computer and internet connection at home. In addition, the country benefits from a stable pro-business and pro-innovation environment and a government that is aware of the importance of connectivity for the economic and social development of a geographically vast nation with a widely dispersed population.

6. Switzerland benefits from an excellent, if expensive, ICT infrastructure and a strong education system that provides the necessary skills to create a knowledge-based, technology-rich economy. These assets, coupled with a stable political and regulatory environment and excellent conditions for innovation and entrepreneurship, have resulted in outstanding digital uptake and use by businesses.

7. The United States moves up two positions to seventh on the list, thanks to improvements in many areas of the index, including the country’s already strong business and innovation environment and ICT infrastructure, notably in terms of wider access to international internet bandwidth. Overall, the country has seen a robust uptake of digital technology by all major stakeholders, whether businesses, governments or individuals.

8. Hong Kong has shown the most pronounced improvement among the top 10, climbing six positions to eighth place. This has been driven by improvements in conditions for innovation and entrepreneurship, better skills training and increased use by both business and government. Hong Kong enjoys a well-developed infrastructure, and this has had a positive economic and social impact.

9. The United Kingdom drops two places from last year. Like the Netherlands, the UK was early in recognizing the importance of ICTs, especially to innovation and competitiveness, and as a result has become highly digitized, with a thriving e-commerce environment. This, coupled with a pro-business approach, has had wide-ranging economic and social benefits.

10. South Korea moves up one position and enters the top 10. A country that has based its economic success largely on the ICT industry, Korea’s government ranks first in the world in terms of online services. The country’s focus on developing its technological capacity as part of its economic development strategy has also improved its reputation for innovation.

Top information technology trends are featured in the Global Information Technology Outlook module ofForum Academy, the Forum’s online professional leadership development platform.