4 Indicators of a Good Digital Infrastructure

Opinion04.02.2017
man with smartphone

As we head into the Fourth Industrial Revolution, the latest Global Information Technology Report sheds light on the status of the world’s digital economy and where it needs to head towards. Innovating our global digital economy poses risks, challenges, and benefits to countries and local economies.  There are various factors that come into play when industries and countries venture out to better engage in the digital economy. These include the political, regulatory, business, and innovation environments; infrastructure, affordability, and skills; individual usage, business usage, and government usage; and economic and social impacts. It is also evident that our rapid digital revolution is changing the way innovation is taking place and this will create a lot more pressure for businesses to catch up. In determining the readiness of a digital economy to adapt to these rapid changes, we need to consider the digital infrastructure that is needed to support this. Four indicators that help determine the quality of a country’s digital infrastructure include the following:

Electricity Production

It goes without saying, without energy, even the digital economy would not exist. A country’s ability to produce and distribute electricity efficiently is a strong determinant of whether it will be able to engage competitively in the global digital economy. Digital economies are increasingly consuming a lot more energy. However, with digital revolutions, this has also meant that there has been a lot more research and development on alternative sources that would leave our global digital economy with a lighter carbon footprint. Our digital era and entrance into the 4th industrial revolution would also mean that there would be a lot more opportunities to develop affordable alternative sources of energy for consumers.

Mobile Network Coverage

If you’ve ever been on an isolated mountain in the middle of nowhere and still had spot on network coverage provided by your carrier, you probably appreciate the value of having good network coverage even more. The reality is that there are still a significant number of countries that do not have adequate mobile network coverage to support their growing digital economies. Governments need to invest and support the telecommunications industries if they would like to improve their ability to compete in the global digital market. Spreading out network coverage to rural areas still poses a major challenge for countries that don’t even have proper transportation infrastructures to rural areas to begin with. With widespread high quality network coverage, more people would have access to the Internet and the digital means to participate in the digital economy.

International Internet Bandwidth

Faster Internet speeds result in a more efficient digital economy. It means basic business functions and operations in the digital economy can take place in a timely manner and costs can be significantly reduced. With the widespread availability of high bandwidths, small and medium enterprises would be able to take advantage of the low costs of digitizing their businesses and digitally transforming their business (in part or whole). This would also encourage more individuals to engage in the startup movement and contribute to the innovation of business ideas within their economies.

Secure Internet Servers

Secure Internet servers are crucial to controlling the amount of Internet fraud and crimes that affect the business and public communities. Governments need to ensure that businesses and individuals are able to participate in the digital economy in a secure digital space. This would garner more interest and buy-in from various stakeholders in adopting new technologies and digitized business models. With digital crimes like big data hacking, credit card theft, and personal identity theft, individuals can be discouraged from participating in the digital economy. It is therefore important to ensure that the digital market environment in a country is comprised of policy and measures that help reduce the amount of digital crime that takes place.

In an age of apps, tech startups, and our entrance into Global Industry 4.0, governments in emerging markets can benefit from taking steps to promote the growth of their own digital economies. Creating an open environment for their small and medium enterprises to compete in the global digital market would create higher ROIs for their local economies. Governments in emerging markets should also support the research and development needed to put into place all the infrastructure requirements of a good digital economy. This needs to be done in conjunction with creating a supportive business environment that encourages businesses and individuals to participate in the global digital economy.