Startup Nation slips four spots in global ranking of ‘digital readiness’

Ranked 16th in the world, Israel shows declines in knowledge, tech and readiness for the future; UAE climbs five places to No. 12

Shoshanna Solomon is The Times of Israel's Startups and Business reporter

Illustrative image of a race, ranking or competition  (Dekdoyjaidee; iStock by Getty Images)
Illustrative image of a race, ranking or competition (Dekdoyjaidee; iStock by Getty Images)

Israel has dropped four places, to 16th globally, in this year’s world ranking of digital readiness, mainly because of a decline in business agility and e-government indicators, data released by Swiss-based think tank IMD shows.

The so-called Startup Nation, however, continued to be a key regional player in digital competitiveness, topping the ranking in areas such as talent development, training and education, and R&D intensity, according to the 2019 IMD World Digital Competitiveness ranking.

The United States held on to the number one spot in the digital competitiveness ranking in 2019, with the index’s entire top five unchanged from last year: USA, Singapore, Sweden, Denmark and Switzerland.

Now in its third year, the ranking, produced by the IMD World Competitiveness Center, measures the capacity and readiness of 63 nations’ economies to adopt and explore digital technologies as a key driver for economic transformation in business, government and wider society.

Technology not only affects how businesses perform but also how countries function and prepare for the future. Governments around the world are investing heavily in their digital economy to enhance value creation and prosperity, the IMD said in a statement released with the data.

To evaluate a national economy’s digital readiness, the ranking examines three factors: knowledge (the capacity to understand and learn new technologies), technology (the competence to develop new digital innovations) and future readiness (preparedness for coming developments).

Out of the 63 nations listed, Israel registered a drop in rankings in all three factors compared to last year: from 12th to 16th in knowledge; 2nd to 8th in technology, and 7th to 19th in future readiness.

In the Middle East, the UAE — along with Israel a key regional digital hub —  climbed five places to 12th globally thanks to improvements in capital availability and supportive regulation for technology development.

Saudi Arabia advanced to 39th globally, from 42nd in 2018, the jump driven by increasing positive perceptions of the business community in areas such as regulatory support for technology adoption and capital availability for investments, the statement said. On the other hand, R&D intensity and e-government indicators experienced a decline.

In the top 10, the Netherlands, Hong Kong and the Republic of Korea moved up (to 6th, 8th and 10th, respectively), while Norway dropped to 9th and Canada fell from 8th to 11th.

“In the midst of uncertainty and a fluid global situation, it seems that business and societies that are agile correlate strongly with the IMD World Digital Competitiveness ranking. Knowledge also remains of paramount importance for the digital performance of different economies,” said Professor Arturo Bris, director of the IMD World Competitiveness Center.

Several Asian economies advanced significantly in the digital ranking compared to 2018. Hong Kong and the Republic of Korea entered the top ten, and Taiwan and China moved up to 13th and 22nd, respectively. All these countries “experienced marked progress in their technological infrastructure and the agility of their businesses,” the statement said.

Further down the ranking, India and Indonesia jumped four and six positions respectively, supported by positive results in talent, training and education as well as the enhancement of technological infrastructure.

In Latin America, Mexico and Colombia were the only countries to advance in the ranking this year. “The lack of resources to support talent and technological development prevents most countries in the region from improving knowledge generation and getting the most from digital transformation,” the report said.

The ranking has been produced every year since 1989 by the IMD World Competitiveness Center, an academic institution based in Switzerland.

In May, Israel slipped three points in the IMD World Competitiveness Rankings for 2019, to 24th, due to a negative performance across different government efficiency indicators, such as budget deficit.

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