Last month, there was widespread concern among industry experts in Jamaica that the country’s ranking on the World Economic Forum Network Readiness Index had fallen 28 places over the last four years. The 2010/2011 assessment included only four countries in the English-speaking Caribbean. This post summarises key findings and discusses factors that would contribute to improving a country’s ICT readiness.
The Network Readiness Index (NRI) is an assessment conducted by the World Economic Forum (WEF) and INSEAD, a world-renowned international business school, to determine a country’s readiness to harness ICTs. Over the last 10 years those institutions have published the Global Information Technology Report (GITR), which has been tracking the development of ICT around the world.
The NRI aims to examine the extent to which the participating countries, which includes both developed and developing economies, leverage achievements or developments in ICT. It comprises the following three sub-indices, which are in turn divided into a number of sub-categories:
- Environment Index – examines how conducive countries are to ICT development and diffusion. It captures information on the market environment, the political and regulatory environment, and the infrastructural environment.
- Readiness Index – examines how prepared and interested individuals, businesses and governments are to use ICTs in their daily activities and operation. It captures information on individual readiness, business readiness, and government readiness for ICTs.
- Usage Index – examines the extent to which ICTs are actively being used by individuals, businesses and governments. This index captures information of individual usage, business usage and government usage of ICTs. (GITR)
The maximum possible score for each sub-index is 7. For each country (or economy) the three sub-indices are averaged to determine its NRI. The 2010/2011 edition of the GITR assessed 138 countries, but included only four countries from the English-speaking Caribbean. The NRIs for the top 10 ranked countries is shown in Figure 1.
NRI results for the English-speaking Caribbean
Figure 2 presents the NRIs for Barbados, Guyana, Jamaica, and Trinidad and Tobago over a five-year period. Of particular note and with the exception of Barbados, all other countries experienced a decline in their NRIs between 2008/2009 and 2009/2010. A possible reason for the decline, although it might not be the sole cause, could be the global financial crisis which occurred in 2008, the effects of which are still being experience worldwide, and especially in the Caribbean. With the crisis, many economies in the region contracted, and spending and development initiatives across most sectors had to be deferred.
Over the period of review, Barbados consistently had the highest NRI of the sub-Caribbean grouping, and in the most recent exercise it was ranked 38th. It was also the highest ranked country in Central and South America and the third highest in the Americas (after the United States and Canada). Barbados is considered to have a fairly conducive environment for ICTs, with a well developed political and regulatory framework, and comprehensive infrastructure. Although individual readiness and usage of ICTs are high, Barbados scored (relatively) poorly in relation to creating an enabling market environment, as well as the interest and preparedness of both business and government to use ICTs.
Unlike Barbados, Jamaica has lost significant ground over the last four years. In 2006/2007 its ranking was 45th, but by 2010/2011, it had fallen to 73rd. In the most recent assessment, Jamaica scored reasonably well with regard to how prepared its citizens are to use ICT. However, there is room for improvement for all other indicators, most notably, infrastructure; and business, government and individual use of ICTs.
On the other hand, Trinidad and Tobago recorded the most significant improvement in the entire assessment exercise, having jumped 16 places from 79 in 2009/2010 to 63 in 2010/2011. Although its overall NRI was identical to Jamaica, 3.8, it scored higher with respect to infrastructure, individual readiness and individual usage.
Guyana, which was ranked at 100, scored lower than the other three Caribbean countries on all sub-indices, except business readiness, where its score was on par with Barbados. However, areas for which it is most deficient are: infrastructure; and individual, business and governmental usage of ICTs.
Implications of the NRI to Caribbean countries
Evidenced by the few countries from the English-speaking Caribbean that are assessed by WEF and INSEAD, the NRI is not a popular indicator in the region. However, the evaluation criteria and associated considerations are highly instructive on the factors that should be considered by countries when gauging their ICT potential.
As guided by the NRI framework, the assessment is not only broad – covering the environment, readiness and usage – it is also quite granular. Ninety-one (91) components in total are evaluated across the three sub-indices, capturing elements that directly and indirectly influence ICT readiness. Examples of the factors that are considered include:
- venture capital availability (environment sub-index, market environment)
- extent and effect of taxation (environment sub-index, market environment)
- software piracy rate (environment sub-index, political and regulatory environment)
- availability of scientists and engineers (environment sub-index, infrastructure environment)
- quality of math and science education (readiness sub-index, individual readiness)
- extent of staff training (readiness sub-index, business readiness)
- government procurement of advanced technology products (readiness sub-index, government readiness)
- households with a personal computer (usage sub-index, individual usage)
- impact of ICT on new services and products (usage sub-index, business usage)
- ICT and government efficiency (usage sub-index, government usage)
In the region, when attention is being paid to ICT take-up or development, the efforts are almost exclusively focussed on addressing matters related to infrastructure, service availability and pricing. However, the WEF/INSEAD framework suggests that a considerably broader range of factors affect the extent to which countries can exploit ICT opportunities. Moreover, to create the necessary enabling environment, the approach must be holistic and cater to the needs of the individual, businesses and Government.
Hence, although most Caribbean countries might not be formally included in the WEF/INSEAD NRI exercise, a more comprehensive approach to harnessing ICT might be warranted. Several national and regional digital plans have been prepared and are currently being implemented, but invariably, they may benefit from stronger cross-linkages with other sectors to improve realisation the desired outcomes.