How AI is Building Intelligent Connectivity
2018 has been a year of solid economic growth. While the digital economy is currently valued at US$12.9 trillion – or 17.1% of global GDP, it has grown at a rate two-and-a-half times faster than global GDP over the past 15 years.
The Global Connectivity Index, now in its fifth year of publication, aims to make a significant body of research on the linkage of ICT infrastructure maturity and GDP growth accessible for policy makers and industry leaders as insights and actionable data on how best to plan for, and navigate the fast-expanding digital economy.
In 2018, the GCI expanded its purview from 50 to 79 nations to provide readers with a more comprehensive view of how countries manage the digital economy challenge. Each nation’s progress in digital transformation is analyzed by their performance in 40 indicators, such as Broadband Subscriptions, Data Center Equipment, Cloud investment, Big Data Experience, Internet of Things (IoT) Potential, and Apps Downloads among others to track the impact of ICT on digital competitiveness and economic growth prospects.
ICT Infrastructure Spurs Economic Growth
Countries tracked in the GCI are plotted along an S-curve and grouped in three clusters – Starters, Adopters and Frontrunners – based on GCI score and GDP per capita. Together, they account for 95 percent of global GDP. Starters are in the initial stages of building ICT infrastructure and focus on making ICT more accessible to create economic opportunities. The middle cluster, the Adopters experience the biggest GDP growth from ICT infrastructure investment and focus on enhancing that infrastructure to expand industry digitization and economic growth.
At the top of the S-curve are the most developed economies, the Frontrunners. They have the capital and resources to aggressively invest in ICT infrastructure and focus on enhancing the user experience as well as leveraging Big Data and the IoT to create a smarter, more efficient economy and society.
Since the GCI’s first edition in 2014, the research has shed a spotlight on the critical role of ICT investment in economic growth. The practical value of the GCI becomes crystal clear when we visualize the linkage of GCI scores with economic outcomes. The addition of a single GCI point can deliver a 2.1% increase in competitiveness, 2.2% increase in innovation, and 2.3% increase in productivity for a country’s economy – a testament to the strategic importance of investing and deploying ICT infrastructure. The links between ICT investment and economic growth are significant – a 20% increase in ICT investment can boost a country’s GDP by 1%. In terms of ROI, investment in digital technologies is roughly 6.7 times the ROI of non-digital investments.
Intelligent Connectivity and the US$23 Trillion Opportunity
But the path to the digital economy has reached a tipping point in 2018. This year’s GCI found that industries are embedding AI in five enabling technologies – Broadband, Data Centers, Cloud, Big Data and IoT – and transforming traditional connectivity into Intelligent Connectivity to unleash innovation and economic opportunities on a scale previously unimagined. Whole new business models, products, processes and services are emerging every day, accelerating growth towards a digital economy worth upwards of US$23 trillion by 2025 and throwing open the gates to a new economic growth cycle.
AI is poised to become the next major general-purpose technology driving a paradigm shift in economic and industrial activity. We already see AI’s influence trickling into all aspects of everyday life, from smartphone assistants and robo-advisors, to multilingual customer service chatbots and investment priorities for national defense.
AI’s cutting edge, not surprisingly, is in the Frontrunner nations with the most advanced and extensive ICT infrastructure. This year’s GCI found some Frontrunners have seen growth plateau as the maximum advantage has already been drawn from the technology. This is where the introduction of AI to create Intelligent Connectivity is having the most pronounced impact to accelerate digital economy growth and unearth new opportunities.
Going forward, the focus of the GCI will be tracking this new cycle of economic growth in the developed nations, but also to provide the actionable data and insights policy makers in the Adopters and Starter nations will need to develop strategies to adopt AI and Intelligent Connectivity suited to their own level of development to achieve sustainable growth.
Let me know what you think about this year’s GCI by leaving a comment below. For more information, please visit the microsite.