The second edition of the IMD World Digital Competitiveness Ranking (WDCR) was published on June 19th. This WDCR assesses the capacity of 63 economies to adapt and explore digital technologies that advance transformations in government practices, business models and society in general. Compared to 2017, the majority of countries in the study experience a relative improvement in their level of digital competitiveness while 40% of the sample shows a decline and only eight economies remain in the same position.
The WDCR is calculated by a country’s performance in three factors: knowledge, technology and future-readiness. The latter captures an economy’s level of preparedness to address effectively the digital transformation.
Research that has taken place elsewhere at IMD stresses the importance of future readiness and its components for countries and firms alike. For instance, the IMD Digital Business Transformation suggests that one of the most important component of a business’ success is the level of agility that it exhibits.
In this edition of the Criterion of the Month we will explore what is the correlation between the Future Readiness factor and indicators of productivity.
Figure 1 presents the relationship between the overall productivity per person employed by an economy on the vertical axis and the future readiness factor ranking on the horizontal. Note that the lower the number in the horizontal axis, the higher the ranking with respect to future readiness is. Thus, the strong negative correlation equal to -0.72 suggests that countries that exhibit high levels of preparedness and awareness for future digital transformation are also countries that are characterized by high levels of overall productivity.