Networked Readiness Framework
It is widely acknowledged that productivity is a critical determinant of economic growth. In fact, a number of empirical studies show that differences in productivity growth account for cross-country growth variations even more than capital or labor accumulation.1 As the World Economic Forum’s research on competitiveness has shown, the determinants of productivity are many and complex.2 Empirical evidence shows that, among these determinants, ICT use is a key driver of innovation, especially in advanced economies where other sources of productivity gains have dried up or produce lower returns.3
As a general-purpose technology, ICTs have an impact that extends well beyond productivity gains. ICTs act as a vector of social development and transformation by improving access to basic services, enhancing connectivity, and creating employment opportunities. In these ways ICTs affect how people live, communicate, interact, and engage among themselves and with their governments.
For these reasons, measuring the extent to which ICTs are used and understanding the determinants of ICT adoption have been the object of much research since the early 2000s. In 2001, the World Economic Forum launched the Global Information Technology Report series and the Networked Readiness Index (NRI). This represented one of the first attempts to make conceptual sense of the complex ICT reality, identifying the common factors that enable countries to use technology effectively. The networked readiness framework that underpins the NRI was intended to provide guidance to policymakers on the factors that they need to take into account to fully leverage ICTs in their growth strategies.
In recent years, the debate has moved from the issue of ensuring access to the question of how to make the best use of ICTs in order to improve business innovation, governance, citizens’ political participation, and social cohesion. In light of this shift in emphasis, and after two years of research and consultations with experts, the Impact subindex was added to the NRI framework in 2012.4Yet measuring the actual impact of ICTs remains a very arduous task, as data remain scarce. In addition, the complex relationships between ICTs and socioeconomic performance are not fully understood and their causality not fully established. However, our hope is to highlight the opportunities offered by ICTs and provide an indication of how they are transforming economies and societies around the world.
The networked readiness framework, presented in Figure 1, rests on six principles:
- A high-quality regulatory and business environment is critical in order to fully leverage ICTs and generate impact.
- Similarly, ICT readiness—as measured by ICT affordability, skills, and infrastructure—is a pre-condition to generating impact.
- Fully leveraging ICTs requires a society-wide effort. All stakeholders—the government, the business sector, and the population at large—have a role to play.
- ICT use should not be an end in itself. The impact that ICTs actually have on the economy and society is what ultimately matters.
- The set of drivers—the environment, readiness, and use—interact, co-evolve, and reinforce each other to create greater impact. In turn, greater impact creates more incentives for countries to further improve their framework conditions, their readiness for ICTs, and their use of ICTs, thus creating a virtuous cycle. Conversely, weaknesses in any particular dimension are likely to hinder progress in others.
- Finally, the networked readiness framework should provide clear policy guidance.