Quo vadis, digitalization?

Digital lessons and meetings via video conference have only been part of our everyday lives since the COVID-19 pandemic. But digital business models – such as those of Facebook, Google, or even booking.com – have not been a trending topic just since last year. However, the pandemic is a powerful accelerator for the digital revolution. More than ever before, new technologies such as 3D printing, augmented and virtual reality, sensors, artificial intelligence, quantum computing, and robotics have the potential to comprehensively change almost every industry. This offers companies and countries great opportunities – but also poses risks, especially in regions that are less digitalized than their direct neighbors. These have difficulty shaping the digital revolution and risk losing touch with the top leaders, but also with neighboring states. Yet, the way governments manage and steer the transition to the digital world will largely determine how competitive and prosperous their countries will be in the coming decades.

According to a recent survey by the European Center of Digital Competitiveness on the digital rising stars of the year, countries such as Italy, Vietnam, Georgia, Lithuania, and Egypt are particularly strong when it comes to initiatives to promote digitalization and digital technology. Differences are also apparent within the G7 – the seven most important industrialized nations in the Western world – and within the expanded group of the G20, the most important industrialized and emerging nations. Countries such as Canada, Italy, and France have become digitally better positioned and improved their ranking, while the USA, Germany, and the United Kingdom have fallen. And within the G20, China and Saudi Arabia are among the biggest climbers, while nations such as Russia, India, and Japan have regressed.

The survey’s ranking shows that it is not necessarily the major digital powers, such as the U.S. or China, that are among the digital rising stars, but countries that are not actually known for digitalization ambitions. But appearances are deceptive.

Digital Revolution in Italy

Italy launched the “Republica Digitale” initiative to promote digital development and aims to advance the digital skills of its citizens. To this end, Italian startups are receiving just as much attention as digital instruction at schools and universities and the digitalization of the administration. Vietnam has also set itself the task of promoting digital transformation. Their “National Digital Transformation Program 2025” aims to create a framework for an electronic platform to connect government and businesses, creating an environment for digital experimentation and innovation. The country also achieved an ambitious target: by the end of 2020, internet coverage in the Southeast Asian state was around 64 percent – up from 0 percent internet coverage as recently as 2000.

Digital Ambitions of Georgia

Georgia is pursuing similar ambitions. The “Social-Economic Development Strategy of Georgia – Georgia 2020” aims to create a socio-economic environment to promote the country’s digital ecosystem. Included is a government office for digital services, funding support for startups from the technology and digital sectors, and the development and roll-out of a national broadband initiative for network expansion. Significant efforts are also being made in the Baltics to drive digitalization. 

Digital Strategy of Lithuania

Lithuania has self-imposed the “Lithuanian Industry Digitalization Roadmap 2019–2030” to centrally coordinate digitalization efforts. Incidentally, the small country is a pioneer in the field of digital technology; the central bank already launched the first digital collector coin based on blockchain technology in 2020. The next step: the promotion of high-performance computers, which are also necessary for cryptocurrencies, for example.

Digital Transformation in Egypt

And Egypt is also striving for more digitalization. With the “ICT 2030 Strategy”, laws have been and are being passed to combat cybercrime, protect intellectual property, and protect data and consumers. The centerpiece of the initiative, however, is a multi-billion infrastructure program to develop a strong digital economy.

These five examples show how countries can act to equip themselves for the digital future and not miss the boat. After all, the drivers of digitalization such as globalization, automation, networking, Big Data, the Internet of Things, changing consumer behavior, and falling transaction costs are not limited to individual states or regions, but affect everyone: citizens, governments, and countries alike.

The countries outlined in the survey and the five examples cited show that words alone will not drive digitalization forward. In particular, the obstacles such as innovation inertia, a lack of awareness of the opportunities available, fear of security gaps and (too) high costs can only be reduced through sensible investment. The successful digital nations show that government and corporate action must go hand in hand if the digital transformation is not to be missed. Digital competitiveness, especially in international comparison, shows which measures have a real effect – and which are merely an expression of goodwill. Nations such as Canada, Italy, and Lithuania are united by the fact that they have not only set ambitious goals but have also driven them forward and even accelerated them. Whether through deliberately extensive government programs, government and entrepreneurial beacon initiatives, legal frameworks, or promoting and demanding entrepreneurship in the digital sector – the possibilities are extensive and should be exploited. This way, Europe and the world will grow together again in terms of the pace of digitalization – and no one loses touch with the global leaders.