Digitalisation dynamics: Developing a global index for digital pioneers, adapters, and followers

Abstract

Digitalisation has become a transformative force revamping economies, societies, and governance systems. It has fostered innovation and enhanced global competitiveness in an interconnected world. This study aims to construct a composite index for digitalisation to evaluate global digitalisation levels and categorise nations as digital pioneers, adapters, and followers. The index is developed using a Principal Component based on Factor Analysis, utilising secondary data gathered from World Development Indicators from 2010 to 2022. The study highlights that the United States, Hong Kong, Singapore, China, and Korea dominate the top tier as digital pioneers through adopting emerging fourth-industrial revolution technologies such as artificial intelligence, blockchain, etc. Moreover, nations like Japan, Switzerland, Estonia, Czechia, and Iceland are categorised as digital adapters due to less digital investments in digital technologies and building digital ecosystems. At the same time, Madagascar, Paraguay, Ecuador, Guatemala, and Egypt remain at the bottom of the index as digital followers due to existing digital gap and digital literacy and skills among the population. This evidence provides digitalisation index an effective tool for policymakers and researchers to assess each nation's digitalisation levels and technological readiness, to formulate strategies and policies to enhance digital interaction, foster innovation, and promote economic growth.