The transition to a global digital economy in 2014 was sporadic – brisk in some countries, choppy in others. By year’s end, the seven biggest emerging markets were larger than the G7, in purchasing power parity terms. Plus, consumers in the Asia-Pacific region were expected to spend more online last year than consumers in North America. The opportunities to serve the e-consumer were growing – if you knew where to look.
Where the Digital Economy Is Moving the Fastest
The transition to a global digital economy in 2014 was sporadic – brisk in some countries, choppy in others. By year’s end, the seven biggest emerging markets were larger than the G7, in purchasing power parity terms. The Digital Evolution Index (DEI), created by the Fletcher School at Tufts University, is derived from four broad drivers. Supply-side factors include access, fulfillment, and transactions infrastructure. Demand-side factors include consumer behaviors and trends and financial, Internet, and social media savviness. Innovations include the entrepreneurial, technological and funding ecosystems; the presence and extent of disruptive forces; and the presence of a start-up culture and mindset. And institutions include government effectiveness and its role in business, laws, and regulations, and promoting the digital ecosystem. Based on the performance of fifty countries on the index during the years 2008 to 2013, they were assigned to one of four trajectory zones. In the Stand Out zone are countries that have shown high levels of digital development in the past and continue to remain on an upward trajectory: Singapore, the US, New Zealand, Israel. The Stall Out zone has countries – like France, the Netherlands, and Japan – that have achieved a high level of evolution in the past but are losing momentum and risk falling behind. India, China, and Brazil are Break Out countries that have the potential to develop strong digital economics and are seeing upwards movement in their DEIs. In the Watch Out zone, countries like Egypt, Kenya, and Saudi Arabia face significant opportunities and challenges and have low DEI scores.