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Singapore Ranks #1, U.S. #6 In Ecommerce Readiness; China Has Fastest Growing Digital Economy

October 9, 2014 Statistics & Trends No Comments Email Email

There are currently 2.9 billion Internet users in the world. While a staggering number, businesses and governments have an opportunity to expand their reach by bringing the remaining 60 percent of the global population online.

Successfully supporting those consumers will depend on knowing which countries are leading digital growth.

To enable businesses and governments to make sense of the evolving global digital landscape, reveal patterns and provide insights into current and future Internet users,MasterCard and The Fletcher Schoolat Tufts University collaborated to create the Digital Evolution Index. According to the Index, Singapore, Sweden and Hong Kong occupy the top three spots on the list of countries prime to welcome the next billion Internet users thanks to their advanced, but still growing, digital economies. The United Kingdom and Switzerland round out the top five, while the United States ranks sixth among the 50 countries measured. China, Malaysia and Thailand ranked as the top three fastest moving digital economies, a result of their rapidly increasing Internet and smartphone population.

“The way people engage digitally is changing fast and we have to listen and watch to truly understand the opportunities and make them matter to people where they are,” said Ann Cairns, President, International Markets, MasterCard. “It is clear that innovation moves at different speeds around the world but the unifying opportunity ahead of us is how we harness engagement in the online and offline worlds, and build trust between the user, the service and the payment mechanism.”

The study identified four interdependent drivers – supply, demand, institutions and innovation – that define each country’s digital evolution and can serve as strategic evaluation points for future growth.

“There is very little about the digital past and present of the West that instructs us about the digital present and future of the Rest,” said lead researcher Bhaskar Chakravorti, Senior Associate Dean of International Business and Finance at The Fletcher School. “The momentum and direction of countries over time result from the interplay of these systemic elements. In the experience of the West the four drivers are more tightly connected. In the case in emerging markets – where the next billion e-consumers are – some of these drivers move much faster than others; the trajectory is non-linear and you could end up with surprises such as Alibaba in China or Flipkart in India or M-Pesa in Kenya. Specifically, understanding the institutions and innovations in these parts of the world is essential to knowing where the world’s digital evolution will pop next.”

While developed markets dominate the top spots, a different picture emerges when measuring the pace of digital adoption. The study analyzed each market’s evolution from 2008 to 2013 to understand country benchmarks, track progress and identify areas for improvement. Countries were grouped into four trajectory zones:

  • Break Out – These countries currently have low readiness scores, but are rapidly evolving. India, China, Brazil, Vietnam, and the Philippines are examples. If their evolution rates sustain, these countries will emerge as strong digital economies, but the Index shows that the next phase of growth may be harder to achieve.
  • Stall Out – While possessing a history of strong growth, these countries (most of Western and Northern Europe, Australia and Japan) have matured. Innovation and seeking markets beyond domestic borders will be critical to continuing growth.
  • Stand Out – These countries, such as Singapore, Hong Kong, and the United States, have and continue to maintain high levels of digital transactions, supported by cutting edge infrastructure and sophisticated domestic consumers. To remain Stand Out markets, these countries must continue to fast-track innovation.
  • Watch Out – These countries face challenges, but with a combined population of 2.5 billion people, they represent significant opportunities for investment. Indonesia, Russia, Nigeria, Egypt, and Kenya are examples.

For additional detail, visit the Digital Evolution Index website and Digital Planet Report, which outline the factors and implications for each of the trajectory zones.

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