Economies that excel in digital competitiveness are distinguished by a high number of high-tech patent grants, strong enforcement of IP rights, and effective utilization of e- governance benefits. Picture: Supplied
Singapore, Switzerland, and Denmark most digitally competitive among 67 global economies while the US suffers a decline.
Economies that excel in digital competitiveness are distinguished by a high number of high-tech patent grants, strong enforcement of IP rights, and effective utilization of e- governance benefits.
Gaps in broadband access and other digital disparities identified in the data threaten to further fragment the global economic competitiveness scene.
Singapore has again topped the 2024 IMD World Digital Competitiveness Ranking (WDCR). Switzerland was second and Denmark third. The US declined by three positions to rank fourth.
The Ranking, produced annually by IMD’s World Competitiveness Center (WCC), uses hard data and survey responses to measure digital competitiveness among 67 global economies, exposing their strengths and weaknesses.
The accompanying report, “The digital divide: Risks and opportunities”, explores the global effects of three phenomena: Disparity in the development of digital infrastructure, geopolitical tensions, and the fast pace of technological development.
Singapore’s strengths include its city management, its number of high-tech patent grants, banking, and financial services, as well as public-private partnerships.
Switzerland progresses significantly in high-tech exports (ninth), e-participation (up 11 positions to 27th), and cyber security (11th).
Denmark’s strengths lie in the quality and prioritization of its employee training, its excellent country credit rating, having agile companies and an open attitude towards globalization, efficient e-government, and reliance on secure internet servers (all indicators ranking first out of 67).
In the US, downward trends have been registered in the country’s perceived attitude towards globalization (58th, down eight positions), an increasing entrepreneurial fear of failure (28th), and a notable decrease in the availability of international experience at the managerial level (28th). Its strengths are high-tech patent grants (fourth) and AI policies passed into law (first).
“Geopolitical rivalries, particularly between major powers such as the US and China’s technological competition, are fragmenting the digital landscape, influencing not only how other countries develop and use digital technologies but also their ability to compete globally,” said José Caballero, Senior Economist at the WCC.
"An economy’s ability to compete at the global level is compromised by the trade war between China (up five places to 14th) and the US. It is therefore likely that any new tariffs will encompass national security-related elements. That is, tensions over technology and security concerns could also intensify, leading the US to further curtail China’s access to advanced technology. That said, it is not entirely clear whether, under the new Trump administration, the US will abandon the relevant Biden policies.”
Geopolitical tensions have increasingly become a defining factor in shaping the digital competitiveness of countries, the report said.
Another of the most significant challenges to digital competitiveness heading into 2025 is how much disparity exists in the development of digital infrastructure across countries. Many economies, particularly in developing regions, lack access to high-speed broadband, reliable electricity, and modern telecommunications networks, which limit their participation in the global digital economy. According to the International Telecommunication Union (ITU), while broadband access has expanded globally, significant gaps remain, especially in rural and underserved areas.
In addition, the report signaled how economies must grapple with the pace of change in technological advancement and with capabilities requirements. While emerging technologies such as artificial intelligence (AI), blockchain, and quantum computing are driving innovation, reshaping industries, economies, and societies, they can also widen the digital gap. Countries that effectively exploit the power of these technologies are likely to enhance their digital competitive advantage, leading to sustained economic growth, improved productivity, and greater global influence. Key indicators in the ranking signaling this include high-tech patent grants, intellectual property rights, and e-governance.
“Though it’s clear that the very top digitally competitive economies share strong and balanced performances across all aspects of the ranking, this trend becomes less persistent lower down,” said Caballero.
“An economy’s initial advancement can arise from a specific focus on one of the digital aspects that the ranking measures, for instance by converging efforts towards improving educational output. However, to remain at the top of the ranking, economies need to consolidate their performances across multiple factors. Both the public and private sector have a crucial role to play.”
"Economies that balance strong governance, technological advancement, and adaptability to emerging trends are likely to lead in digital competitiveness in the years ahead,” added WCC Chief Economist Christos Cabolis.
The WDCR evolves to best reflect the changing conditions of digital governance, business, and society. To this end, the new or improved indicators this year are: a computer science education index, a measure of peer-reviewed literature on AI, by author's institution, per capita, a count of AI policies passed into law, a count of secure internet servers, and flexibility and adaptability (of people, when faced with new challenges) measure.
The ranking’s methodology divides digital competitiveness into three factors: Knowledge, Technology, and Future Readiness. Each of these factors is divided into three sub-factors which highlight every facet of the areas analysed. Altogether, the ranking features nine such sub-factors. These nine sub-factors house a total of 59 criteria.
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