IMD World Digital Competitiveness

Striving towards being a digital nation in the era of artificial intelligence

Professor Arturo Bris Director IMD World Competitiveness Center

National strategies pay heed to the key role that tech nology is currently playing in accelerating economic growth and generating prosperity. Just look at the trans formational impact of automation on industries such as automotive, logistics, and engineering, or the significant increase in service exports (mostly technology-related) in most developed countries. In many cases, we observe that technology has contributed to making countries more competitive. And yet, in the western world, the revolution in robotics and automation for the last two decades – together with the incorporation of new technologies such as big data analytics, blockchain, and machine learning –has not been accompanied by significant improvements in productivity. Overall, between 2008 and 2004, this metric, measured as GDP per employee, has stayed flat. Building “digital nations”–by which we mean countries that facilitate the full adoption of digital technologies by companies and individuals – should be a priority, and indeed the top countries in this year’s IMD Digital Competitiveness Ranking are those that could be considered as such. This year has been characterized by the emergence of Artificial Intelligence (AI) as a transformative tech nology for our societies. AI, first and foremost, is going to generate productivity gains by automating many tasks that previously required human intervention. This will create such a degree of efficiency that costs will What makes a nation truly digital? Since the Center’s first digital ranking in 2017, we have defended the view that granting individuals access to technology, and therefore enabling them to reap the rewards, is primarily the responsibility of governments. Only when the necessary digital infrastructure and regulations are in place can private-sector companies develop solutions that improve our quality of life. Lessons

be reduced, but this could have a negative effect on employment levels. By providing personalized services, however, AI will improve quality of life and satisfaction. It is possible that AI could help us solve some of our most pressing environmental and social challenges through still unthinkable creative solutions. AI will transform our economies and help develop some sectors, though this could be at the expense of others. Also, let us not forget that, by allowing the processing of data in a much faster and effective way, AI will speed up the digitalization of societies and therefore the growth of digital nations. The potential of AI does not obscure the fact that to make algorithms work, access to large amounts of information is needed, posing a risk to privacy and raising ethical and regulatory concerns. This can be dealt with by a national and global response. Given there is a certain consensus that AI will create new jobs, but also one saying it will destroy them, how it will ultimately fare in terms of social development is unclear. In this context, what is in store for those digital nations that are undergoing the AI revolution? We hope this year’s IMD World Digital Competitiveness Ranking helps shed light on the key factors that, at a national level, could really help countries to combine prosperity and economic development with digital transformation and the development of AI solutions.

from consistently high performers in our ranking since its inception — the United States (first in 2023, Denmark (fourth in 2023), Singapore (third in 2023), and Estonia (18 th in 2023) — are illustrative examples of the possible paths towards incorporating technology from the top down.

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