Which countries have made the most progress in digital competitiveness?

A new report analyzes how countries have developed their digital competitiveness over the past three years.

The world's top "digital upgraders" invest in talent to make it easier for companies to innovate and start businesses.

High-performing countries also have plans and long-term development visions that can be implemented quickly.

We are experiencing a technological revolution, where artificial intelligence, 3D printing, virtual reality and other technologies are merging with each other. This will affect every industry and every economy around the world. A country's ability to respond to these changes and build competitiveness around these digital technologies will determine not only its future economic situation, but also its geopolitical position.

Against this background, we analyse how countries have developed their digital competitiveness over the past three years. Our Digital Upgraders Report answers three questions: Which "digital upgraders" countries are outperforming and improving their position relative to others? Which countries have lost ground? What can we learn from the best-performing countries? The answer can be found in HEC's European Centre for Digital Competitiveness's Digital Enhancers Report, which ranks 140 countries around the world and compares them to other countries in their region.

Globally, digital companies will face new and dynamic competitors. Between 2017 and 2019, France made the biggest gains in relative digital competitiveness in the G7, becoming the top "digital enhancer" in the group; Italy and Germany had the biggest declines among the G7 countries.

Within the Group of 20, the rankings reveal an interesting pattern for the two global digital superpowers: China and the US. The rankings show that China's digital competitiveness has improved significantly, while the United States has declined over the same period, mainly because the country has become less attractive to international talent. The top three "digital lifters" in the G20 are Saudi Arabia, France and Indonesia. India, Italy and Germany were at the bottom of the list.

There are two main differences between the Global Competitiveness Report and the Digital Enhancers Report. First, the Global Competitiveness Report analyzes the competitiveness of countries as a whole, while the Digital Enhancers Report analyzes the digital competitiveness of countries only in terms of their digital ecosystems and way of thinking. Second, the Global Competitiveness Report analyzes changes over one year, while the Digital Improvers Report shows countries' performance over the past three years.

In addition to the rankings themselves, we also analyzed the policies adopted by the "digital upgrader" countries. The analysis suggests that all digital ascenders have something in common that other countries can learn from as they design their own digital strategies. The report details the top three "digital promoters" in each region. Here's a summary of the best steps they took together:

1) The world's top "digital upgraders" invest in talent to make it easier for companies to innovate and start businesses

Indonesia and the Dominican Republic, for example, have invested heavily in digital education. Indonesia has launched a Digital Talent Scholarship scheme, which aims to provide qualifications for 20,000 people. Meanwhile, the Dominican Republic has launched the "One Computer" program, which gives every child access to a laptop at school. The success of digital upgraders also includes the ability to attract international talent. The Philippines, Indonesia, France and Latvia, which have start-up visa programmes, are leading the way. Similarly, "digital promoters" make it easy, fast and cheap to start a company. In Azerbaijan, for example, the time it takes to set up a company has been cut from more than three days to less than one, while Latvia has introduced special tax and financing regimes to support start-ups.

2) Top digital promoters have a comprehensive plan and a long-term vision that can be implemented quickly

Most digital promoters, such as La French Tech, Saudi Arabia's ICT2023 strategy and the Arab Vision 2030, implement well-designed, comprehensive government programmes with top-level support.

Startups are a focus area for Digital upgraders. Large-scale initiatives such as Japan's J-Startup initiative and Indonesia's Thousand Startups Movement aim to support these companies. In addition, France has set up a new "€5bn fund", while Armenia is offering up to €50,000 to start-ups.

Our report shows that while some countries are advancing rapidly in digital technology, others are losing ground. Countries such as the US, Sweden and Singapore are often seen as digital tech leaders, but our findings suggest they are not necessarily dynamic digital lifters. Only Singapore's relative position has improved over the past three years. By contrast, both the US and Sweden have effectively lost ground at the same time. This highlights the dynamic development of digital competitiveness. With the right policies in place, new global digital champions will emerge.