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Huawei Global Connectivity Index: Benchmarking the Transformation to a Digital Economy

The impact of the digital economy is transforming every country around the world whether they like it or not. “Get on board or get left behind” is a hard fact to face for countries under pressure to accelerate their social and economic development and improve their competitiveness. A primary element of this process is connectivity — which also happens to be Huawei’s core business proposition.

Tide of Digital Transformation

A “Better Connected World” is emerging. Huawei is forecasting that by 2025, there will be 100 billion digital connections and the global market for the Internet of Things (IoT) will be worth USD 2 trillion. The rapid proliferation of broadband, cloud computing, and Big Data analytics are combining with many other significant technology changes to create an Information and Communications Technology (ICT) environment that is enabling the IoT to rise and become a key disruptive force in our economic lifetimes, for countries, industries, and individuals alike.

In fact, several major countries have already embarked on the race, leveraging ICT technologies to either sustain their competitiveness or get ahead of the curve for the coming connected age — “Made in China 2025,” “Industry 4.0” in Germany, and America’s “Industrial Internet” — just to name a few — all represent different approaches for similar ambitions. Digital transformation is the engine driving the world into a new era of ICT-centered economic activity. Any country that fails to keep pace is destined to lag behind in international competition for decades to come.

This digital transformation requires the participation of players across industries, and for which electronic connectivity is the single most important key for bridging the physical world with the digital world. Peripheral mobile devices and sensors will connect with core data centers to form ubiquitous networks. Integrated combinations of ICT technologies, such as network switches, servers, and mass storage create the transformation-enabling foundation necessary for transforming traditional IT components into the cloud computing, Big Data analytics, and IoT platforms necessary for the coming sea change.

So how should we evaluate a country’s ICT development and its impact on the digital economy? How best to optimize ICT investment to maximize the benefits of the digital transformation? How can we forecast the development priorities and trends for each industry in each national economy?

Huawei’s Global Connectivity Index (GCI) quantifies the connectivity status of different countries with a comprehensive, objective, and scientific calculation of the value generated by transforming into a digital economy. The GCI provides an indicator of which countries are best poised for development and growth, and an ICT planning reference for policymakers looking to embrace the digital economy.

Global Ranking

The 2015 edition of the GCI employs a more advanced framework and new methodology from years past. With double the number of ICT variables and countries analyzed compared to last year, the 2015 GCI is able to draw the correlations necessary for governments and other stakeholders to establish appropriate investment targets. A distinguishing feature of the Huawei GCI from similar indices is a broader definition of what constitutes connectivity between networks, computer resources, and storage, while emphasizing the non-infrastructure elements of a fully functioning digital economy, such as service demand and eCommerce activity.

In order for connectivity to reach its full potential it needs to be available, adopted, and provide an inspired experience. In total, 38 indicators divided across Supply, Demand, Experience, and Potential were measured, analyzed, and cross-referenced. The findings of this analysis not only validate expected correlations between technology investment, adoption, and economic growth, but also reveal some surprising insight around the impact of the five transformation enablers — broadband connectivity, data centers, cloud computing, Big Data, and IoT — as these technologies represent the targets on which stakeholders should focus their investments in order to most efficiently transform their economies for the digital age.

Based on a robust supply and demand of ICT services, and an advanced state of adoption, the United States ranks the highest among surveyed countries. The mature national economies of Sweden, Singapore, Switzerland, and the United Kingdom round out the top five. Chile, China, and the United Arab Emirates (UAE) lead the developing markets, with all three ranking in the high teens to low twenties overall. Developing market leaders are characterized by strong mobile adoption and overall access that is often comparable to developed markets, while typically lagging behind in terms of data center investment and other core elements of ICT infrastructure. Data center investment by developed countries is three times that of developing countries, which is the major catalyst of cloud proliferation as “the edge does not exist without the core.”

Overall, the 2015 GCI shows that 20 percent growth in ICT investment will increase a country’s GDP by one percent.

Mobilizing for Transformation

The GCI is a useful tool for understanding which stage of development each country is currently in, how it compares with its peers, and how close it is to breaking through into a more advanced stage — or the risk it faces in falling behind. The findings from the GCI are helpful for governments and business leaders to navigate the daunting march toward a digitally transformed economy.

It is Huawei’s opinion that governments should lead the way. Governments are in the position of greatest responsibility for assertively pushing for development rather than relying on market forces which may be reactive, have insufficient resources, or have different priorities. One of the best ways for businesses to learn is to lead by example, and governments are uniquely capable of paving the way for businesses and citizens by incorporating technology-based services into its infrastructure for the society at large. Singapore and Canada are good examples of countries where eGovernment has been a major catalyst for promoting mobile applications which, in turn, have provided the impetus for remarkable performance growth in the area of broadband services.

Governments should also further invest in the IoT and Big Data, as every new connection generates a new data source. Network security is an essential component for building a trustworthy, transparent, and cooperative environment for internal and external customers.

Recruiting the best and brightest talent is crucial for the transformation into a digital economy. Governments and businesses must not delay in attracting and developing the necessary human resources for the collective benefit of their local industries and national economies.

The strategy for transforming into a digital economy must be carefully planned and executed. With full insight into the ICT industry, powerful planning capabilities, and extensive global project experience — with a footprint in over 100 countries — Huawei is actively helping many countries around the world achieve their digital transformation goals. We are open to partnering with policymakers and enterprise leaders to identify, harness, and create new digital economy opportunities with the aim of building a “Better Connected World.”

By William Xu

Huawei Chief Strategy Marketing Officer