22 August 2000

Excerpts: Survey Measures Nations Preparedness for Digital Economy

A report released August 22 rates 42 nations in their readiness to become active participants in the global digital economy, finding that 23 of the countries "require substantial improvement" before electronic commerce and government can flourish.

The report, "Risk E-Business: Seizing the Opportunity of Global E-Readiness," rated nations on the basis of five criteria: connectivity, electronic leadership, information security, human capital and electronic business climate. The countries rated were selected because "they represent the source of the next phase of world economic growth," according to the report's overview. The majority of the countries surveyed are generally considered developing nations.

"Many countries have not yet created the conditions that permit full participation in the digital economy," said Bruce McConnell in an August 22 press release from McConnell International LLC, the consulting group specializing in information technologies that compiled and released the study. These countries must develop in the five areas to support information technology or else "the potential of the networked world will be unrealized," according to the overview.

Building capabilities in information and communication technology is a key ingredient in the overall pursuit of development today, according to Carolos Primo Braga, manager of the World Bank's infoDev program, as quoted in the press release. "We are working closely with governments and the private sector to promote e-readiness in the developing world. Methodologies that help us and client countries better understand what is at stake and what are the critical bottlenecks are quite useful," Braga concluded.

The entire report is available at http://mcconnellinternational.com/ereadiness/report.cfm

Following is the press release:

McConnell International

August 22, 2000

Global E-Readiness Gap Threatens Pace of Economic Growth

Varied Risk in E-Markets Yields Many Business Opportunities

WASHINGTON, D.C. -- World economic expansion will stagnate unless key countries act quickly to increase their "E-Readiness;" yet growing demand in those markets creates many opportunities for e-business, according to a report issued today by McConnell International LLC, a global policy and technology consulting firm. The report, Risk E-Business: Seizing the Opportunity of Global E-Readiness, rates 42 key economies' connectivity, e-leadership, information security, human capital, and e-business climate.

"The networked world is under construction," said Bruce W. McConnell, the firm's president. "Smart companies will get in on the ground floor, but they should wear hard hats. The foundations are still unfinished. Many countries have not yet created the conditions that permit full participation in the digital economy."

The report rated the E-Readiness of: Argentina, Brazil, Bulgaria, Chile, China, Costa Rica, Czech Republic, Ecuador, Egypt, Estonia, Ghana, Greece, Hungary, India, Indonesia, Italy, Kenya, Latvia, Lithuania, Malaysia, Mexico, Nigeria, Pakistan, Peru, Philippines, Poland, Portugal, Romania, Russia, Saudi Arabia, Slovakia, Slovenia, South Africa, South Korea, Spain, Taiwan, Tanzania, Thailand, Turkey, Ukraine, Venezuela, and Vietnam. It found that 23 countries, including China, Indonesia, Russia, and South Africa, require substantial improvement in at least two rated areas before e-business and e-government will flourish.

At a press conference on the report, Carlos Primo Braga, Manager of the World Bank Group's infoDev program said, "Helping developing countries address the challenges and opportunities of the networked economy is an important dimension of the development agenda. We are working closely with governments and the private sector to promote E-Readiness in the developing world. Methodologies that help us and client countries better understand what is at stake and what are the critical bottlenecks are quite useful."

John Hamre, President and CEO of the Center for Strategic and International Studies, observed, "The report highlights the importance of public-private partnerships to address complex regulatory and policy issues in an innovative and agile manner. The rapidly changing network cuts across boundaries, and requires institutional approaches that can move fast while involving key stakeholders."

Harris Miller, President of the World Information Technology Services Alliance (WITSA), stated, "As the report notes, there are great opportunities for industry around the world. However, for innovation to flourish, countries must foster effective competition for communications and information services, and create a predictable and transparent business environment." The report was developed in collaboration with WITSA members from many of the rated countries.

The report decried "a myopic view of the state of national E-Readiness" in some countries, and urged all countries to: promote private sector investment in infrastructure; set an example by offering government services online; build trust by enhancing security, privacy, and intellectual property protection; create incentives to retain skilled technologists and managers; and foster competition and transparency. "The technology permits countries to leap from the old to the new economy. But if the gulfs between aspirations and accomplishments widen much more, it will be hard to make that leap," McConnell added. "E-business will thrive in the countries that take the proven steps to progress."

McConnell International LLC .... is owned and managed by Bruce McConnell and Roslyn Docktor, who led the International Y2K Cooperation Center.... The report is available on the company's website at www.mcconnellinternational.com.

The World Information Technology and Services Alliance is a consortium of 41 information technology (IT) industry associations from economies around the world. As the global voice of the IT industry, WITSA is dedicated to advocating policies that advance the industry's growth and development; facilitating international trade and investment in IT products and services; strengthening its national industry associations; providing members with a network of contacts; and hosting the World Congress on IT. For more information, visit www.witsa.org.

end press release

Following are excerpts from overview of report:

McConnell International

August 2000

Risk E-Business: Seizing the Opportunity of Global E-Readiness

August 2000

OVERVIEW

The world entered the 21st century on a wave of technology optimism. Far from bringing the world to a halt at the end of 1999, information and communications technologies (ICT) seem capable of generating a new level of global prosperity. Around the world, ICT-led growth is raising productivity, creating jobs, and increasing incomes.

This ICT-led expansion is at risk, threatening the global economy. Global e-society stands at a turning point. Action or inaction by national governments and industry leaders will produce a very mixed set of outcomes. Some countries will make technology a driver for a new national economy, leaping from an agrarian or industrial base into the knowledge economy. Others will fail to take the necessary steps and will be left behind in the race for cyber markets.

This report examines 42 critical economies for their E-Readiness -- their capacity to participate in the global digital economy.(1) The countries were selected because they represent the source of the next phase of world economic growth. They comprise nearly three-quarters of the world's population and a quarter of the world's GDP. Businesses whose supply chains or marketing plans require e-commerce in these countries must move quickly in an environment rich with risk and opportunity.

These 42 critical economies have recognized the potential of ICT, but many have a great deal of work ahead. Twenty-three have at least two areas where substantial improvement is needed.(2) Without significant progress over the next three years, these countries will face great challenges in catching up with the global leaders.

A failure of key countries to act promptly would have an impact far beyond their borders. Nations and businesses around the world need these markets to prosper. The recent economic expansion has been enabled by the exponential growth in value that comes with connecting more people and organizations to the global network. ICT-led growth does not come from buying computers, but from connecting them to each other. The network can transform economic, political, and social relationships, but without the rapid participation of increasing numbers of people around the world, the global economy will stagnate and the potential of the networked world will be unrealized.(3)

Countries are rated on a blue-amber-red scale. Blue indicates that the majority of conditions are suitable to the conduct of e-business and e-government. Amber indicates that improvement is needed in the conditions to support e-business and e-government. Red indicates that substantial improvement is needed in the conditions necessary to support e-business and e-government. Blue is used for the highest rating rather than green, because no country is ever completely e-ready.

It is true that, even in countries with red ratings, there are pockets of amber and even blue. These pockets represent significant short-term opportunities for global e-business. The longer-term picture is more mixed. Extensive conversations with governments and business around the world reveal a troubling tendency among many to dismiss the level of effort and the speed of action needed to join the networked world. This tendency is exacerbated by a myopic view of the state of national E-Readiness in some capitals. The ratings in this report reflect the situation in each country as a whole. The low ratings in many countries highlight the toughest challenge, that of expanding the benefits of the network from the few to the many within each country.

In contrast to the tendency of some to underestimate the work needed, the most successful economies rated demonstrate great attention to moving quickly and getting the details right. In these countries, progress is promoted by strong industry and government leadership and is sustained by dynamic public-private partnerships. These leaders are creating new, responsive models of governance and are pointing the way forward.

In each area considered, the ways to improve are relatively clear. Increased connectivity requires an environment that encourages private sector investment. Effective e-leadership depends on effective government-industry partnerships. Improved information security entails clear, enforced legal frameworks and public education about security. The development of human capital necessitates incentives to attract, train, and retain the best technical and managerial talent. A world-class e-business climate exhibits competition, transparency, predictability, broad participation, and an up-to-date financial services infrastructure.

The networked economy has just begun. The world is at an early stage of the revolution that information and communications technology is creating. When every person and device is connected to the network, economic, political, and social relationships will change forever. The balance between intellectual and material power, the concept of privacy, the nature of information ownership, and the purpose of travel will be transformed.

The potential of the network to assist in bringing prosperity to all nations is enormous. Exciting opportunities abound in each of the countries analyzed in this report. Diligent firms will examine each specific situation carefully and make sound investments, turning knowledge of risk into comparative advantage. Attentive governments will remove barriers to competition and leverage market-led growth to the benefit of all citizens. Sustained progress requires collective action at Internet speed, but with traditional care.

PURPOSE

This report assesses the current E-Readiness of 42 critical national economies. It provides an independent public assessment of the most important economic question of the early 21st century: "Who is poised to prosper in the networked economy?"

"E-Readiness" measures the capacity of nations to participate in the digital economy. E-Readiness is the source of national economic growth in the networked century and the prerequisite for successful e-business. Neither countries nor companies can prosper unless the basic building blocks are in place. For countries that have taken the basic steps, the pace of change makes complacency a constant danger.

This report will --

• Promote awareness of the need for action to increase E-Readiness throughout the world.

• Focus attention on where action is needed most.

• Help companies evaluate international e-business opportunities, whether B-to-B, B-to-C, or B-to-G.(Business to business, business to consumer, business to government.)

• Encourage countries to improve the climate for e-business and move forward on e-government.

• Establish clear E-Readiness evaluation criteria that apply across nations.

end overview excerpts

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