Download Press release “Digital divide is now a digital chasm

Press release
“Digital divide is now a digital chasm”: inequality widens in technology, reports
Huawei Global Connectivity Index 2017
[Shenzhen, China, April 17, 2017] Digitally-developed economies around the globe are
continuing to progress due to larger investments and adoptions in Information
Communication Technology. At the same time, digitally-developing economies have also
started to accelerate their growth by investing strategically in ICT capabilities and their
digital transformation journeys – yet the gap continues to grow.
Those are some of the findings in the just announced Huawei Global Connectivity Index (GCI)
2017, the fourth annual study that shows how countries are progressing with digital
transformation based on 40 unique indicators that cover five technology enablers:
broadband, data centers, cloud, big data and Internet of Things. Investing in these five key
technologies enables countries to digitize their economies. Through centralized planning,
potential connectivity can be fully leveraged and ICT capabilities can support positive growth
of national economies.
According to GCI 2017, global progress towards a digital economy is picking up pace. The
world's GCI score is up four percentage points since 2015. The report shows that ICT has
become an engine of economic growth.
Of the 50 countries that were analyzed, 16 are considered Frontrunners, 21 are Adopters,
while the remaining 13 are Starters. These clusters reflect the nations’ progress in digital
transformation. Frontrunners (average GDP per capita of US$50,000) are mostly developed
economies, continually boosting digital user experience, using big data and IoT to develop
more intelligent, efficient societies. Adopters (average GDP per capita of US$15,000) are
focused on increasing ICT demand to facilitate industry digitization and high-quality
economic growth. Starters (average GDP capita of US$3,000) are in the early stage of ICT
infrastructure build-out, and focus on increasing ICT supply to give more people access to
the digital world.
The report said economic planners should give priority attention to widening inequality,
noting “the digital divide becomes a digital chasm”. “By examining three years of GCI data,
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we see growing inequality, an ICT version of the ‘Matthew Effect’ – the sociology theory that
states: ‘the rich get richer and the poor get poorer’. [This] suggests, groups or individuals
that have an accumulated advantage over time not only succeed, but leverage their initial
advantage to pull farther and farther ahead of competitors. Policy makers need to
understand that this widening digital divide will impact every sector of the economy and
society. Nations that cannot build sustainable economic growth may also have difficulty in
feeding, educating and providing job opportunities for their people,” the report said.
Frontrunners achieved an increase of 4.7 GCI points from 2015 to 2017 by leveraging the
capabilities of Cloud, Big Data and IoT. Adopters experienced a lift of 4.5 points on average.
The slower Starters fell farther behind in their ability to compete in the Digital Economy, with
only a 2.4-point improvement in overall GCI scores.
Key areas where inequality between the clusters is an issue include mobile broadband
subscriptions, IT workforce per capita, ICT investment per GDP, apps download per capita
and IoT installed base per capita. It should be noted that a 1 point increase in GCI score is
equivalent to 1) a 2.1% increase in competitiveness 2) 2.2% increase in national innovation,
and 3) a 2.3% increase in productivity.
GCI 2017 study reported the relationship between ICT investment and GDP growth is
generally accepted in government and industry. Examining the GCI 2017 data with numerous
economic forecasting models, the report said a nation which increased investment in ICT
investment in infrastructure by additional 10% annually from 2017 to 2025 can benefit from
a multiplier effect. “Using this economic impact model we find that every additional US$1 of
ICT infrastructure investment could bring a return of US$3 in GDP at present, US$3.70 in
2020 and the potential return increases to US$5 in 2025,” the report said.
“The widening gap has had a significant impact on countries as they develop and work their
way toward digital transformation,” said Kevin Zhang, President of Huawei Corporate
Marketing. “To stay competitive, nations at an early stage of digital transformation will need
to prioritize ICT infrastructure development, especially broadband connectivity and cloud
adoption to a strategic level in economic planning to activate local resources and reach
sustainable growth. At the same time, nations aiming to capitalize on their Frontrunner
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status will want to prioritize cloud as a potent catalyst to initiate a chain reaction of
transformation through big data and IoT.”
The 50 countries assessed by the GCI 2017 account for 90 percent of global GDP and 78
percent of the world’s population.
For more information about the Huawei Global Connectivity Index 2017, visit:
http://www.huawei.com/minisite/gci/en/
About Huawei
Huawei is a leading global information and communications technology (ICT) solutions
provider. Our aim is to enrich life and improve efficiency through a Better Connected World,
acting as a responsible corporate citizen, innovative enabler for the information society, and
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partnerships, Huawei has established an end-to-end ICT solutions portfolio that gives
customers competitive advantages in telecom and enterprise networks, devices and cloud
computing. Huawei’s 170,000 employees worldwide are committed to creating maximum
value for telecom operators, enterprises, and consumers. Our innovative ICT solutions,
products, and services are used in more than 170 countries and regions, serving over onethird of the world's population. Founded in 1987, Huawei is a private company fully owned by
its employees.
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