Readying to face new digital frontiers
THE nature of competitiveness constantly evolves, affecting not only how businesses function but how countries perform today and will perform in the future. Economies are experiencing more rapid technological changes than in the past.
The landscape of current capabilities and future prospects is changing swiftly and this poses a significant challenge for the IMD World Competitiveness Ranking as it seeks to capture developments and benchmark the performance of the 63 nations it analyses.
Every edition of the IMD World Competitiveness Ranking incorporates new indicators to better reflect the competitiveness of countries. There are times, however, when a more drastic approach is required and the introduction of a new ranking is necessary.
The IMD World Competitiveness Centre thus deemed it fundamental to develop a new analytical framework to assess the state of digital affairs.
It created the IMD World Digital Competitiveness Ranking, which is much more focused and assesses the capabilities and readiness of economies to undertake the process of digital transformation.
Governments around the world are investing in scientific and technological infrastructure to keep up with the possibilities of the digital economy and enhance the prosperity of their citizens.
While technological development is a necessary condition for the future well-being of an economy, it is not sufficient to augment value creation.
Digital technology needs not only to be implemented, it needs to be explored to achieve two important goals — to improve efficiency and enhance the range and the quality of services.
Digital competitiveness is defined as the capacity of an economy to adopt and explore digital technologies leading to the transformation in government practices, business models and society in general.
The innovative capacity of a country is heavily rooted in areas such as the concentration of scientists and engineers in the workforce, the degree of protection of intellectual property and the depth of cooperation among the public, private and academic sectors.
In the existing overall Competitiveness Ranking, these act as proxies for scientific and technological innovation. The new ranking complements the overall ranking by fostering a better understanding of the forces related to the digital economy as well as the latter’s contribution to country performance.
Technological transformation is gradual, requiring shifts at the organisational, institutional and structural levels. Organisations need to be able to recognise, communicate and assume the challenges brought about by the emergence of new technologies.
Institutions must further their “openness and flexibility” to adapt to transformations and readjust relevant rules, regulations, norms and beliefs.
Finally, the structural level is the degree of “permeability of research, production, market, and demand conditions” in encouraging innovation, the development of new products, the emergence of new markets and the entry of new actors into relevant sectors according to Ulrich Dolata’s 2009 paper on technological innovations and