Development Of Digital Economy And Its Important Players
In The Previous Issue (161), I Mentioned The Concept And Meaning Of The Digital Economy And Its Components.
In this issue, I try to look at the biggest and most important countries in the field of the digital economy while pointing to digital development.
Digital technology is at the forefront of economic and social development in most countries. It has provided a unique opportunity for governments and societies to speed up economic growth and citizens’ access to services and jobs.
The worldwide outbreak of Covid-19 has pushed people, businesses, and governments to make the most of digital technologies and tools.
Under normal conditions, maybe years should have passed until societies reached this level of using digital technologies in education, medicine, banking, transportation, and other fields.
Today, at the beginning of 2023, there are still nearly 3 billion people offline in the world, and the vast majority of this population lives in developing countries; The gap in the use of the Internet and communication tools remains a significant challenge. Nearly half (43%) of the world’s population did not use mobile Internet last year, despite living in areas with mobile broadband coverage.
However, what has happened in the last few years in the development of digital tools and technologies and the achievements that have been achieved cannot be easily ignored.
Digital development is of great importance. One billion people worldwide cannot prove their true identity, which limits their access to digital services and opportunities. The gender gap persists. Women have 7% fewer mobile phones than men and 16% mobile internet use. This means that 264 million women worldwide still have less access to mobile Internet than men.
The age gap is another problem. By the end of 2021, 71% of the world’s youth aged 15-24 were using the Internet, compared to 57% for all other age groups. The share of Internet users in urban areas is twice as high as in rural areas.
Digital technologies can also transform markets and economic opportunities. You can hardly find any economic field not equipped with at least a part of digital technology.
Research has shown how mobile technology has significantly increased the rate of GDP in the period 2000-2017. A 10% increase in mobile phone adoption has increased GDP from 0.5% to 1.2%. Digitization of public sector operations and services and the development of digital industries and businesses will help drive socioeconomic development.
What needs to be done for countries to reap the benefits of digitization and fully participate in the global digital economy?
Bridging the global digital divide:
Despite the rapid spread of new technologies worldwide, billions of people are still not using the Internet.
Preparing for the jobs of tomorrow: Innovation is fundamentally changing the nature of work; New jobs are emerging, and to compete in the digital economy, countries must prioritize education and strengthen the digital skills of their workforce.
Developing secure and reliable digital systems: As the world digitizes, increasing material and human investment in cyber security and personal data protection have become more critical.
The most critical digital economies
The list of the most critical digital economies in the world does not have a significant difference from the most important economies. It can be said that the developed countries with the highest GDP rates are also leading in the digital economy with little differences.
Top 10 world economies in 2022
According to the latest data from the World Bank, the following countries have the highest ranks in the world economy in terms of GDP in 2022:
- United States: $20.89 trillion
- China: 14.79 trillion dollars
- Japan: 5.06 trillion dollars
- Germany: 3.85 trillion dollars
- United Kingdom: $2.67 trillion.
- India: 2.66 trillion dollars
- France: 2.63 trillion dollars
- Italy: 1.89 trillion dollars
- Canada: 1.64 trillion dollars
- South Korea: 1.63 trillion dollars
The list of powerful countries in the world’s digital economy shows the same lands with a slight difference in position. For example, India, which ranks sixth in the global economy, ranks eighth in the digital economy. Germany and South Korea score better in the digital economy than the overall economy.
The list of 10 essential countries of the digital economy is as follows:
- United States
- Great Britain
- South Korea
The most digital countries
But GDP is only one of the indicators of economic measurement. The use of digital technology can also be evaluated based on the growth indicators of the use of the Internet by people and businesses and the rate of digital competitiveness.
The size of the economy is not the only criterion; The extent to which a society has embraced and used digital tools is also one of the most critical indicators. One can ask to what extent a country has been digitized.
Accordingly, in 2022, according to the IMD report, Denmark took first place among 63 countries in the ranking of digital competition. For the first time since this assessment was conducted six years ago, it moved the United States to second place.
The Global Digital Competitiveness Ranking also shows that cybersecurity measures are a top priority for the public and private sectors in competitive digital economies.
Governments and the private sector must protect their digital infrastructure from cyber attacks to continue competing for digital economies.
This was a crucial finding in the 2022 edition of the IMD World Digital Competitiveness Rankings, published by the World Competitiveness Center (WCC). 1.
Under similar conditions, economies that want to prepare a comprehensive and clear road map for digitization should invest equally in training a talented workforce and training, scientific focus, and research and development.
This ranking describes the importance of national factors in explaining the digital transformation of companies and the adoption of digital methods by citizens. “Digital countries are shaped by a combination of digital talent, digital regulations, data governance, digital attitudes, and capital availability,” says Arturo Bris, director of the WCC.
In the 2022 IMD study, 63 global economies were studied regarding their ability to adopt and explore new digital technologies. In this study, 54 criteria – a combination of accurate environmental data and IMD’s executive survey – were measured and divided into three main groups: future readiness, knowledge, and technology. Denmark’s success is mainly due to its outstanding performance in future readiness, defined by the WCC as the country’s “level of readiness to take advantage of the digital transformation”2. Denmark performs strongly in business agility (1 out of 63) and IT integration (1 out of 63), ranking fifth in adaptability.
Sweden remains in third place among the digital top ten, and Singapore has gained a new home in fourth place. Switzerland climbs to 5th place (out of 6).
Switzerland is on its way to becoming a fully developed digital country with adequate digital infrastructure and regulations, data governance, and digital attitudes. A key success factor for the future will be introducing a digital identity program in this country. Countries like Denmark and Singapore, which have a good position in this ranking, set the path for the countries in their region.