GCI 2020: The US Sprints to Gold in the Digital Olympics

ByAndrew Williamson

March 12, 2021

Andrew Williamson

In the digital Olympics of 2020, the United States won a decisive gold medal. That is, according to Huawei’s 2020 Global Connectivity Index (GCI).

The GCI is our annual research project that assesses the state of play in the global digital economy. We meticulously measure a multitude of metrics of proven significance for enabling the growth and international competitiveness of a nation’s digital economy.  Initiated in 2015, the GCI is composed of 40 indicators grouped thematically across four broad pillars. These are Supply (quality and range of the provision of ICT products and services); Demand (extent and appetite for digital transformation); Experience (comprises indicators measuring the quality of experience of ICT products and services); and last but not least Potential (our proprietary forward looking indicators that look at the potential growth and capabilities of new technologies like 5G, cloud computing, IoT and AI within a country).

All these indicators are evaluated at the national level, normalised, benchmarked, and consistently scored across 79 countries, comprising some 95% of global GDP. We aggregate the scores to produce annual country rankings that show comparative performance and changes over time.

The United States performs consistently well across most GCI indicators and commands a sizeable lead overall to equally second placed Singapore and Switzerland. The USA does particularly well compared to the average global scores for AI investment, AI potential, internet of things (IoT) installed base, Cloud experience and IoT analytics.

Our research for 2020 adds to others in establishing the link to pandemic economic resilience and national digital sophistication. We find that those countries with higher GCI scores have been relatively less impacted by the pandemic. We establish quantitatively that for our “Frontrunner” group of countries, expected contractions in GDP are around 7% compared with 14% for the following group of Adopter countries with lower GCI scores.

The United States’ highly developed digital capabilities almost certainly helped support the nation’s battle against COVID-19. Moreover, the pandemic made digital transformation a priority for many businesses around the world as they grappled with maintaining operations in the midst of national lockdowns. This trend across the ICT sector and the wider economy appears to be pervasive. A greatly enhanced digital acceleration of our societies is clearly underway, quicker even than the most optimistic of pre-crisis forecasts.

This year we also take a longer term perspective. And there is good news here. Taking our databank of scores annually from 2015-2020, we find that our group of Starter countries are narrowing the gap with the leading GCI countries (see figure 1), thanks mostly to improvements in broadband coverage and affordability. Vietnam and Peru are our stand-out countries, both progressing to the Adopter group of countries from Starters in that period. This chimes with economic theory that capital and investment should flow to those countries that are furthest behind where potential returns are highest. Additionally, our findings map to our S-curve of GCI economic impact correlation – rapidly increasing returns to technology investment for advanced Starters and Adopter countries until it flattens out more at the technological frontier (where the Frontrunners reside).

Average compound annual growth rates (CAGR) in overall GCI scores 2015-2020

Since 2015, Starter nations increased their mobile broadband adoption by over 2.5 times, with several countries moving close to 100% coverage. Additionally, 4G subscribers in starter nations have gone from an average of 1% to an average of 19% in 2019, with some countries reaching over 30% of their populations having access to high speed 4G mobile broadband coverage.

Mobile broadband affordability as measured by the cost of a typical mobile broadband package divided by GNI per capita have also dropped by 25% (more affordable) since 2015. This increased Internet access has opened up new economic opportunities, allowing e-Commerce spending for example to almost double since 2014 to over US$2,000 per person annually in 2019.

The United States commanding capabilities in the digital sphere are perhaps unsurprising to many informed observers. According to the European Union’s latest research and development scorecard for example, three of the top five companies in the world in terms of their overall 2020 R&D investment are American technology companies – Amazon, Alphabet and Microsoft. Huawei is fourth incidentally, while Apple is sixth.

Based on IDC’s COVID-19 Tech Index (a survey of over 1,000 organizations gauging buyer intent for ICT investments) the United States was lagging in its recovery, with the Asia-Pacific region bouncing-back the quickest as of August 2020.

And despite the United States overall strong performance in the GCI, it lags behind its Frontrunner peers in areas such as broadband download experience, fibre optic coverage, and international Internet bandwidth.

The GCI is invaluable here to all stakeholders in identifying the relative strengths, weaknesses and opportunities of many nation’s digital economic capabilities. And to conclude with our sporting analogy, the United States has run an impressive race to date in our shared digital future. But other nations are catching-up fast and setting national plans in place for the fourth industrial revolution.

Download the GCI report and visit the US country ranking page.

Disclaimer: Any views and/or opinions expressed in this post by individual authors or contributors are their personal views and/or opinions and do not necessarily reflect the views and/or opinions of Huawei Technologies.

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Andrew Williamson

Vice President, Government Affairs and Economic Adviser, Huawei In this role, Andrew is a key aide on global macroeconomic, political and industry trends. His research also involves the contribution ICT makes to economic growth, and society.

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