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4 Mar 2024

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Modest Investments Improve Digital Readiness Dramatically

Each nation of the world should be able to develop its own Digital Economy. Developing a Digital Economy is not something reserved for wealthy, developed countries. IDCA Research studies the potential of each nation of the world to build and travel its individual Digital Economy path. The three big focus areas are:

1. Create sufficient Digital Infrastructure to support a Digital Economy

2. Educate and train people to build and operate Digital lnfrastructure

3. Develop eServices and apps to utilize Digital Infrastructure

Starting down the path to creating a Digital Economy does not necessarily require an all-encompassing, ponderous vision and strategy. They can be built – are being built – bit by bit, from projects to put a specific government service online to bringing faster bandwidth speeds to local internet service to using a new app to buy or sell something.

In particular, developing nations can benefit very quickly from modest investments in Digital Infrastructure, and the training and new services that will result from it. Doing some recent modeling, we confirmed how any number of nations can effect significant change through a focused initiative.

We can take, for example, a hypothetical nation of 50-100 million people with an annual per-person income in the range of $3,500 to $7,500. Several nations in Latin America, Asia, and Africa fit this description. These nations score right around the world average in the IDCA Digital Readiness Index, so are situated squarely in what we call the Opportunity Zone; conditions are present and sufficient for rapid progress and improvement.

Digging into the real metrics for one of these nations, which has an overall score of 40, compared to the world average of 44, we found that an aggressive plan to invest about US$200 million in data center infrastructure would dramatically increase its Digital Infrastructure foundation, and improve its overall score by 3 points.

If this nation could also achieve consequent – and expected – improvements that would achieve a 20% improvement in average internet speed, 10% in mobile access, 10% in perceived corruption, 8% in income parity, 4% in educational opportunities, and 4% in physical infrastructure would push its overall score up another 9 points. The resulting overall score of 52 would leapfrog this nation from the middle of the pack in its region to the top two or three.

There would also be a need to build the new, sustainable electricity required to power these new servers. But building this new capacity would immediately start returning the investment.

Improving one's Digital Readiness score is of course not an end goal itself, but reflects what would be tremendous progress for this nation's people, at a cost that could easily be financed. We have details of our homework for anyone who would like to investigate similar scenarios for their own nations. The Digital Readiness Index measures relative technological and socioeconomic progress for all the nations of the world, and can be deployed as a key tool in creating initiatives and paths toward Digital Economies.

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