SA drops in connectivity ratings

South Africa has slipped several places in the annual Nokia Siemens Connectivity Scorecard results.

The global study rates “useful connectivity” in 50 countries, half of which are defined as “innovation-driven economies”, and the other half as “resource and efficiency-driven economies”.

“Useful connectivity” refers to the ability of connectivity to contribute to economic growth, especially through improvements on productivity that are widely held to be the key to sustained economic prosperity.

In 2009, SA was ranked in the number four spot for resource and efficiency-driven economies - behind Malaysia, Turkey and Chile respectively.

The 2010 edition of the scorecard saw a substantial revision to the indicators used for the study. SA also moved up to second place in the resource-driven economy rankings, with a connectivity score of 6.18.

This year, however, with the further inclusion of new data indicators in the scorecard, SA fell back significantly, with an overall score of 4.68. Malaysia continued to lead the resource and efficiency economies.

SA fared particularly poorly in the consumer market, lacking in both consumer infrastructure and consumer usage and skills.

“This year's scorecard includes a broader range of indicators to capture new forms of ICT use, such as cloud computing, business mobile data services, and ICT investments in healthcare and education. The weighting methodology has also been updated extensively,” says principal of the Berkeley Research Group Kalyan Dasgupta.

“While the overall impact of the indicators was modest for most innovation-driven economies, the new data caused an increased dispersion between the best and worst resource and efficiency-driven economies.”

The report notes: “SA fell back several places, penalised perhaps by the new data indicators that were used this year, especially as these indicators whittled down what was once a very strong business sector performance.

“In general, however, the resource and efficiency economy scores correlate very well with per capita GDP and other measures of overall economic development,” says the report.

Authored by the dean of Haskayne School of Business, at the University of Calgary, Professor Leonard Waverman, the report states: “We use the term 'connectivity' to refer to the totality of interaction between a nation's telecommunications infrastructure, hardware, software, networks, and users of these networks, hardware and software.

“Thus broadband lines, PCs, advanced corporate data networks and advanced use of wireless data services are certainly measures of connectivity, but so are human skills relevant to the usage of these infrastructures, technologies and networks.

“The Scorecard aims to measure useful connectivity by making a link between connectivity and economic performance,” says Waverman.

The scores are determined by the measurement of a series of indicators for each country in the areas of infrastructure, as well as use and skills for the consumer, business, and public sectors, using a weighting scheme for all six components for each country.

Every country's performance for each of the six components of the Scorecard is benchmarked against the best in a particular class in the given group of economies.

In the innovation-driven economies, Sweden narrowly beat the US for the top spot.

A key finding from the study is that countries that continue to invest in ICT infrastructure, applications and services, as well as promoting ICT workforce skills and use will be better able to cope with the effects of global recession and boost their socio-economic growth.

“Despite global economic shocks, the knowledge economy is growing in power. While many advanced countries are forging ahead in terms of infrastructure and their use of ICT, the real connectivity gaps are in the developing world, with the exception of strong growth in mobile telephony,” said Waverman.

“One thing which is clear is that developing countries must make ICT more affordable, stimulate its adoption and overcome barriers to its use to remain relevant and competitive.”

“Broadband is a key enabler of the digital economy, but is not in itself a sufficient enabler,” says Waverman.

The report advises: “Achieving world-class connectivity is about more than simply building great networks; it's also about equipping consumers with the skills needed to expand usage in order to exploit the full potential of a connected world.”

“Developing countries can, through creating the right environment for ICT adoption, use ICT to drive forward their economies,” said the report, adding: “Skills-related barriers to usage are a major problem for the less well performing resource and efficiency economies.”

Scorecard programme manager at Nokia Siemens, Kim Jones, says: “In its fourth year, the study reiterates that broadband infrastructure deployments only translate into faster economic growth when there is complementary investment in skills, as well as in relevant services and applications.”

To see the full report, visit www.connectivityscorecard.org.