Digital trade and digital competitiveness are the new kids (no longer new) as far as multilateral trade rules are concerned. There are growing demands for new rules on ecommerce that can spur digital trade and growth across the globe.
I found this interesting report on digital competitiveness called the Digital Riser Report 2020 done by the European Center for Digital Competitiveness which ranks countries of the globe based on how digitally competitive or ready they are. I wasn't interested in the ranking - was more interested in the methodology and the indicators used to decide who is up and who is down.
The Report lists out two sets of parameters to determine digital competitiveness - ecosystem related and mindset related. The effort was to examine whether the right conditions exist where digital growth and entrepreneurship could flourish.
The Ecosystem related indicators asked the following set of questions:
1. Venture capital availability - “In your country, how easy is it for start-up entrepreneurs with innovative but risky projects to obtain equity funding?”
2. Cost to start a business - Expressed as a percentage of the economy’s income per Capita
3. Time to start a business - Number of calendar days needed to complete the procedures to legally operate a business
4. Ease of hiring foreign labour - "In your country, how restrictive are regulations related to the hiring of foreign labour?”
5. Skillset of graduates - “In your country, to what extent do graduating students from secondary education possess the skills needed by businesses?” and “In your country, to what extent do graduating students from university possess the skills needed by businesses?”
The Mindset indicators asked the following questions:
1. Digital skills among active population - “In your country, to what extent does the active population possess sufficient digital skills (e.g. computer skills, basic coding, digital reading)?”
2. Attitudes towards entrepreneurial risk - “In your country, to what extent do people have an appetite for entrepreneurial risk?”
3. Diversity of workforce - “In your country, to what extent do companies have a diverse workforce (e.g. in terms of ethnicity, religion, sexual orientation, gender)?”
4. Mobile-broadband subscriptions - Number of active mobile-broadband subscriptions per 100 Population.
5. Companies embracing disruptive ideas - “In your country, to what extent do companies embrace risky or disruptive business ideas?”
Broadly, the indicators thrust is to understand what is the ease of doing business, what is the skill set involved, how good is the availability of venture capital to start innovative companies, what is the cost to start a business, how easy is it to employ qualified foreign labour, what is the internet penetration and what is the attitude of the population towards digitalisation.
Very relevant set of indicators. What I found interesting is that the country's regulatory framework for digital tarde - bth internal or external in terms of rules on data privacy, localisation requirements, cross border trade flows, intellectual property law enforcement, performance requirements, do not form part of the indicators. How relevant are they to digital competitiveness? Do they matter at all? Or are they relevant to increase global competitiveness when one is a digital powerhouse themselves? Of course some of the indicators related to ease of doing business do have a co-relation to investment rules but that is a broader question. In fact, the indicator on foreign labour, calls for a more freer flow of high skilled labour across countries. Do countries have the appetite for that now?
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