Brazil is in the intermediate stage, called "Accelerate", which includes countries that are taking advantage of digital technology and that should continue to invest in the development of human capital to increase the pace of innovation.
We are immersed in a world where technological progress is a constant that can change the way of doing business and the life of society. In this context, digitization is a key aspect that allows countries to maintain global competitiveness, increase GDP, encourage innovation and create jobs. But how prepared are the countries to venture into this challenge?
This issue gave rise to Cisco Digital Readiness Index, a study developed in conjunction with Gartner Research, which measured the digital readiness of 118 countries, 19 of which are in Latin America, based on components such as technological infrastructure, human capital, basic needs and government and business investment.
In general, Latin American countries are in a stage between basic digital preparation, called Activate, and intermediate, called Accelerate. Brazil ranks 10th among Latin American countries surveyed in the Accelerate stage, which includes countries that should continue to invest in human capital development to increase the pace and reach of digital technology within and beyond their borders.
Countries in the “Activate” stage are starting their digital journey and include many countries in Africa and some in the Middle East and Asia. Countries in the “Accelerate” stage scored in between, with some component scores with room for improvement. Countries in this middle stage include many in Latin America, Eastern Europe, and some in Asia. A third stage, “Amplify”, of the countries with the highest level of digital readiness, includes the United States, many countries in Western Europe and some in Asia such as Singapore, Japan and Australia.
The digital readiness value was calculated based on seven key components to create an environment of economic opportunity for everyone in an increasingly digital world:
• Technological infrastructure: fixed telephony and broadband subscriptions; Internet servers, network services, estimated IT expenditures;
• Technology adoption: diffusion of mobile devices, Internet usage, cloud services (IT spending estimate);
• Human capital: total workforce, adult education rate, education index (years of study), prospective population of the future workforce (from 0 to 14 years old);
• Basic needs: life expectancy, mortality rate (under 5 years old), access to electricity;
• Ease of doing business: rule of law and regulatory environment, logistics and infrastructure, services;
• Government and Business Investment: foreign direct investment, high technology export, government success in promoting IT;
• Entrepreneurship: strength of legal rights, time needed to start a business, availability of capital.
Latin America and Brazil
According to the study, the average for Latin America was 11.78. The global average of digital readiness is 11.96. Global digital readiness scores for countries in the highest stage (Amplify) averaged 16.83. Those in the middle stage of digital readiness (Accelerate) had an average of 12.49, and those in the lower stage of digital readiness (Enable) had an average of 7.91.
In this scenario, Brazil obtained an overall average of 11.80. This puts the country 2.7 points below the average that would classify it in the Amplify category. When analyzing the results of specific components, Brazil obtained mixed results. The country has the best placement in Latin America in Government and Business Investment and is well placed in Technology Adoption and Technological Infrastructure, being 7th and 5th in Latin America, respectively. The country ranks eighth in the region for Entrepreneurship, but only 17th for Ease of Doing Business. In terms of Human Capital, the country ranks 13th in the region.
"Digital transformation will be fundamental for social inclusion in Brazil. Knowing how to analyze gaps and opportunities for improvement is critical so that governments can focus their efforts to accelerate this transformation. This study aims to support governments and recommend which priority areas for a inclusive digital economy", says Laercio Albuquerque, president of Cisco Brazil. "The results show that Brazil still has a lot of potential for development in its digital environment and, although improvements are needed in some components, the country stands out in important areas, such as technological adoption and infrastructure and business investment".
Other highlights of the study
From the Digital Readiness Index, a relationship was found between digital readiness and GDP per capita for each region surveyed. These indices reveal which countries are digitally well prepared and which are less well prepared, as well as which have opportunities for local governments, industry, educational institutions and community organizations to work together and collaborate to increase digital readiness.
The study revealed that different specific activities, investments and interventions are required depending on a country's stage of digital readiness, as follows:
• Intermediate-stage (Acelerar) countries such as Brazil benefited most from human capital development, improvements in basic human needs, and advances in the ease of doing business in the country
• Countries starting their digital journey (Activar) would benefit primarily from interventions aimed at improving basic human needs and developing human capital, especially increasing fundamental IT knowledge.
• Higher stage countries (Amliar) would benefit most from human capital development, especially a focus on emerging and specialized technology skills.
The methodology
Cisco jointly developed with Gartner a model to measure countries' digital readiness and discover key interventions that can help them move towards digital readiness. This holistic model can also be applied at regional and state levels using the corresponding metrics.
To have comparable scores in each country, it was essential to use standardized data points available for each country. Using the seven components, each country was ranked based on standardized data points from data sources such as the World Bank, World Economic Forum, United Nations, and Gartner, added together to create a total digital readiness score.
This issue gave rise to Cisco Digital Readiness Index, a study developed in conjunction with Gartner Research, which measured the digital readiness of 118 countries, 19 of which are in Latin America, based on components such as technological infrastructure, human capital, basic needs and government and business investment.
In general, Latin American countries are in a stage between basic digital preparation, called Activate, and intermediate, called Accelerate. Brazil ranks 10th among Latin American countries surveyed in the Accelerate stage, which includes countries that should continue to invest in human capital development to increase the pace and reach of digital technology within and beyond their borders.
Countries in the “Activate” stage are starting their digital journey and include many countries in Africa and some in the Middle East and Asia. Countries in the “Accelerate” stage scored in between, with some component scores with room for improvement. Countries in this middle stage include many in Latin America, Eastern Europe, and some in Asia. A third stage, “Amplify”, of the countries with the highest level of digital readiness, includes the United States, many countries in Western Europe and some in Asia such as Singapore, Japan and Australia.
The digital readiness value was calculated based on seven key components to create an environment of economic opportunity for everyone in an increasingly digital world:
• Technological infrastructure: fixed telephony and broadband subscriptions; Internet servers, network services, estimated IT expenditures;
• Technology adoption: diffusion of mobile devices, Internet usage, cloud services (IT spending estimate);
• Human capital: total workforce, adult education rate, education index (years of study), prospective population of the future workforce (from 0 to 14 years old);
• Basic needs: life expectancy, mortality rate (under 5 years old), access to electricity;
• Ease of doing business: rule of law and regulatory environment, logistics and infrastructure, services;
• Government and Business Investment: foreign direct investment, high technology export, government success in promoting IT;
• Entrepreneurship: strength of legal rights, time needed to start a business, availability of capital.
Latin America and Brazil
According to the study, the average for Latin America was 11.78. The global average of digital readiness is 11.96. Global digital readiness scores for countries in the highest stage (Amplify) averaged 16.83. Those in the middle stage of digital readiness (Accelerate) had an average of 12.49, and those in the lower stage of digital readiness (Enable) had an average of 7.91.
In this scenario, Brazil obtained an overall average of 11.80. This puts the country 2.7 points below the average that would classify it in the Amplify category. When analyzing the results of specific components, Brazil obtained mixed results. The country has the best placement in Latin America in Government and Business Investment and is well placed in Technology Adoption and Technological Infrastructure, being 7th and 5th in Latin America, respectively. The country ranks eighth in the region for Entrepreneurship, but only 17th for Ease of Doing Business. In terms of Human Capital, the country ranks 13th in the region.
"Digital transformation will be fundamental for social inclusion in Brazil. Knowing how to analyze gaps and opportunities for improvement is critical so that governments can focus their efforts to accelerate this transformation. This study aims to support governments and recommend which priority areas for a inclusive digital economy", says Laercio Albuquerque, president of Cisco Brazil. "The results show that Brazil still has a lot of potential for development in its digital environment and, although improvements are needed in some components, the country stands out in important areas, such as technological adoption and infrastructure and business investment".
Other highlights of the study
From the Digital Readiness Index, a relationship was found between digital readiness and GDP per capita for each region surveyed. These indices reveal which countries are digitally well prepared and which are less well prepared, as well as which have opportunities for local governments, industry, educational institutions and community organizations to work together and collaborate to increase digital readiness.
The study revealed that different specific activities, investments and interventions are required depending on a country's stage of digital readiness, as follows:
• Intermediate-stage (Acelerar) countries such as Brazil benefited most from human capital development, improvements in basic human needs, and advances in the ease of doing business in the country
• Countries starting their digital journey (Activar) would benefit primarily from interventions aimed at improving basic human needs and developing human capital, especially increasing fundamental IT knowledge.
• Higher stage countries (Amliar) would benefit most from human capital development, especially a focus on emerging and specialized technology skills.
The methodology
Cisco jointly developed with Gartner a model to measure countries' digital readiness and discover key interventions that can help them move towards digital readiness. This holistic model can also be applied at regional and state levels using the corresponding metrics.
To have comparable scores in each country, it was essential to use standardized data points available for each country. Using the seven components, each country was ranked based on standardized data points from data sources such as the World Bank, World Economic Forum, United Nations, and Gartner, added together to create a total digital readiness score.
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