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Nordic countries were ranked among the top five digital economies in the world in the latest Digital Evolution Index (DEI).
But the report also raised concerns about the Nordics losing momentum in their digital development.
The DEI 2017 study, which was conducted by Mastercard and the Fletcher School at Tufts University, placed Norway, Sweden, Denmark and Finland first, second, fourth and fifth, respectively, when it comes to the state and rate of digital evolution. Switzerland took third place.
The report evaluated 60 countries based on internet access and infrastructure, consumer demand for digital technologies, government policies, laws and resources, as well as investments into research and development and digital startups.
The report praised Nordic governments for being early investors in digitisation and building institutions and infrastructure for digital economies, but pointed out that they showed signs of slowing momentum. Every Nordic country was placed in what the report described as the “Stall Out” category (alongside countries such as Canada and the US), which means while their digital advancement is high, they face the challenge of sustaining growth.
“The innovation coming out of Norway, Sweden, Denmark and Finland is not commensurate with the strong institutions, sophisticated domestic demand and world-leading infrastructure they possess,” said Ravu Shankar Chaturvedi, associate director of research at the Fletcher School’s Institute for Business in the Global Context. “Therein lies the reason for their slowing momentum.”
Read more about digitisation in the Nordics
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In contrast, the report’s “Stand Out” countries – including New Zealand, Singapore, the UAE and the UK, were categorised as both digitally advanced and exhibiting high momentum.
Ville Peltola, head of digitisation at the Technology Industries of Finland, was not surprised by the Nordic results. He said governments were aware of the challenges, but there was a risk of complacency.
“If leadership is lulled into a false sense of comfort, you won’t be renewing yourself, and then these risks arise. This applies to almost anything,” he said.
Peltola said he would like to see the public sector embrace a more experimental approach and increase the use of fast trials and prototypes, some of which have already been highlighted in the Finnish government’s strategic programme of reform.
Defending its category, Nils Hertzberg, manager at the Swedish Council for Digitisation, said elements of digital stall were inevitable for countries that are already digitally evolved.
“If they are measuring things like research on or the use of artificial intelligence, or diffusion of connected things, or the number of robots in industrial production, then certainly Sweden’s rank for momentum could be higher,” he said. “But if it measures things like the number of internet users, price for broadband connections or the number of fixed-line telephones, it would be difficult for Sweden to grow much more and we would certainly be ‘stalling out’ against other countries.”
Hertzberg has a point, as the Nordic region’s digital credentials cannot be disputed. For example, the EU’s Digital Economy and Society Index 2017 ranked Denmark, Finland and Sweden as the top performers. Shankar Chaturvedi highlighted Swedish businesses’ achievements in adopting digital technologies and how Finland had been able to reinvent itself after Nokia’s smartphone woes.
But the key message of the DEI report remains: to maintain their high scores, the Nordic countries need to make a conscious effort to continue reinventing themselves, bet on emerging digital technology where they have leadership, and eliminate impediments to innovation.