Huawei Releases7th Annual Global Connectivity Index Report and ProposesFive Key Stages of Industry Digital Transformation
Huawei released its Global Connectivity Index (GCI) 2020, the seventh annual GCI report the company has published. For the first time in a GCI report, the 2020 release proposed five key stages ofindustry digital transformation: task efficiency, functional efficiency, system efficiency, organizational efficiency and agility, and ecosystem efficiency and resilience.
A key finding of the GCI 2020 is that the digital transformation of industries will help countries increase productivity,spur economic recovery, and developfuture competitiveness. GCI researchhas suggested that economies which could increase productivity and go digital with intelligent connectivity generally enjoy higher gross value added (GVA) per worker or per hour worked.
Starters are proactively narrowing the gap with leading economies.
This report has analyzed the changes of each country’s GCI score since 2015.The average scores of Frontrunner, Adopter, and Startereconomieshave all increased since 2015, with Starters showing the highest compound annual growth rate (CAGR) followed by Adopters and then Frontrunners. This suggests that Starters are catching up with Adopters and Frontrunners andnarrowingthe digital gaps.
The 2020 reporthas also shown that Starters have made significant progress in broadband coverage. Their average mobile broadband penetration went upby more than 2.5 times, their 4G subscriptionswentfrom 1% to 19%, and their mobile broadband became 25% more affordable. These achievements haveenabledStarters to offer better comprehensive digital services and embrace new opportunitiesin economic development. In addition, their e-commerce expenditure has almost doubled since 2014 to over US$2,000 per person. Some Starters were movingup the GCI cluster, increased their GCI scores by up to 17%, and managed toraise GDP to a level that was 22% higher than somepeers. Vietnam and Peru have both becomeAdopter economies in 2020.
Research shows that the willingness of companiesto invest in IT varies depending onwhere they are based. Organizations in Frontrunner and Adopter nations areprioritizing maintaining their IT budgets over non-ITbudgets. They have also cut their IT budgets by 2.5to 3.5 times less than organizations in other countries on average. Nations with moremature digital infrastructure are better positioned tominimize the economic impact of the pandemic,recover faster, and ensure the continuity of theirtransformation into higher-order productivity models.
The digital transformation of economic sectors will help economies develop “higher-order” productivity to spur economic recovery and future competitiveness.
Countries need to make ICT investments based on their unique set of existing factor endowments in order to produce a multiplier effect. In general,economies are made up of a combination of different sectors with one or two tending to dominate. The GCI 2020report suggests that a country’sICT strategy should be built aroundits accumulated sectoral strengths. Regardless oftheindustry, moredigitalization means moreaddedvalue.
For the first time in a GCI report, the 2020 release proposed five key stages for the digital transformation ofeconomic sectors:
Stage 1: Task efficiency.Focus is placed on tracking the completion of individual tasks through basic connectivity and more efficient communication.
Stage 2: Function efficiency.Computerized or automated functions enabled by ICT make it possible to handle multiple tasks simultaneously and share information more efficiently.
Stage 3: System efficiency. More focus is put on the digitization of core system functions for efficient operations. Enterprises in this stage will have stronger demand for connectivity and cloud services.
Stage 4: Organizational efficiency and agility. Enterprise processes are digitalized, enterprise applications aremigrated to the cloud, and all systems are effectively integrated. In addition, high-coverage networks, wide adoption of cloud-based applications, and AI and IoT deployment contribute to real-time data analysis and insights.
Stage 5: Ecosystem efficiency and resilience.The entire ecosystem is digitalized, able to quickly respond to market changes, and can supportthe automatic coordination and cross-sector collaborationof stakeholders. Representative technologies such as 5G, IoT, androbotics present new opportunities for the emergence of new business models, working methods, and productsthroughout the digitization process.
“As ICT permeates industries, digital transformation has become unanimously agreed on among countries and industries,” said Zhang Hongxi, Chief Marketing Officer of Huawei’s ICT Infrastructure.”For the first time, we extendedourresearch perspective from the dimension of countries to industries. We also suggested digital transformation paths for countries and enterprises in different stages to help them build future-oriented economic resilience.”
GCI reports aim to provide policymakers and economic stakeholders with valuable insights that can help them speed up growth in the digital economy. The 79 countries evaluated by GCI 2020represent 95% of the world’sGDP and 84% of global population.
For more information, please visit:https://www.huawei.com/minisite/gci/en/