Nigeria listed in ‘break-out’ zone amongst digitally advanced countries

Researchers from Fletcher School at Tufts University and Global Enterprise Risk and Security, in an article published in collaboration with the Harvard Business Review (HBR) and the World Economic Forum, have listed Nigeria a ‘break-out’ country amongst world’s most digitally advanced economies.

The listing of digitally advanced countries is an outcome of a Digital Evolution Index (DEI) created by HBR in collaboration with Tufts University and Mastercard.

The Index analyzed the state and rate of digital evolution across 60 countries and placed Nigeria among ‘break out’ countries, which are low-scoring in their current states of digitalization but are evolving rapidly.

“The high momentum of break out countries and their significant headroom for growth would make them highly attractive to investors. Often held back by relatively weak infrastructure and poor institutional quality, break out countries would do well to foster better institutions that can help nurture and sustain innovation,” the report indicated, adding that break out countries have the potential to become the stand out countries of the future, with China, Malaysia, Bolivia, Kenya, and Russia leading the pack.

“In Africa, while the two largest economies, Nigeria and South Africa, remain in break out and watch out zones, respectively, digitally savvy Kenya has picked up an impressive level of momentum by assembling a thriving ecosystem. In parallel, countries in Latin America can learn some lessons from smaller, faster-moving countries, such as Colombia and Bolivia,” the HBR DEI stated.

HBR explained that it introduced the Digital Evolution Index in HBR in 2015 to trace the emergence of a “digital planet,” how physical interactions — in communications, social and political exchange, commerce, media and entertainment — are being displaced by digitally mediated ones, noting that it identified many hotspots around the world where these changes are happening rapidly and other spots where momentum has slowed.

The index specifically claims that digital technology is widespread and spreading fast, that there are more mobile connections than people on the planet, and more people have access to a mobile phone than to a toilet.

“Cross-border flows of digitally transmitted data have grown manifold, accounting for more than one-third of the increase in global GDP in 2014, even as the free-flow of goods and services and cross-border capital have ebbed in the aftermath of the 2008 recession,” it stated.

It also noted that while more people can benefit from access to information and communication, the potential for bad actors to create widespread havoc increases; with every year, the incidents of cyber attacks get bigger and have wider impact.

According to the index, ‘stand out’ countries are highly digitally advanced and exhibit high momentum. They are leaders in driving innovation, building on their existing advantages in efficient and effective ways.

However, sustaining consistently high momentum over time is challenging, as innovation-led expansions are often lumpy phenomena. To stay ahead, these countries need to keep their innovation engines in top gear and generate new demand, failing which they risk stalling out.

Stall out countries, on the other hand, enjoy a high state of digital advancement while exhibiting slowing momentum. The five top scoring countries in the DEI 2017 ranking — Norway, Sweden, Switzerland, Denmark, and Finland — are all in the stall out zone, reflecting the challenges of sustaining growth.

“Moving past these ‘digital plateaus’ will require a conscious effort by these countries to reinvent themselves, to bet on a rising digital technology in which it has leadership, and to eliminate impediments to innovation. Stall out countries may look to Stand Out countries for lessons in sustaining innovation-led growth,” the report noted.

Watch out countries, the index states, face significant challenges with their low state of digitalization and low momentum; in some cases, these countries are moving backward in their pace of digitalization.

“Some of these countries demonstrate remarkable creativity in the face of severe infrastructural gaps, institutional constraints, and low sophistication of consumer demand. The surest way for these countries to move the needle on momentum would be to improve Internet access by closing the mobile Internet gap — that is, the difference between the number of mobile phones and the number of mobile phones with Internet access,” it said of the watch out countries.

Notably, two of the world’s most significant economies, the U.S. and Germany, are at the border of stand out and stall out, with a third, Japan, in the neighborhood. It is essential for them to recognize the risks of plateauing and look to the smaller, higher-momentum countries to explore how policy interventions could be effective in pushing a country into a zone of greater.

“Clearly, the most exciting region in the world, digitally speaking, is Asia, with China and Malaysia as exemplars. We can expect to see plenty of investor and entrepreneurial interest in this region; it is critical that the political institutions are stable and supportive.”