Most Western and Northern European countries, Australia, and Japan have been Stalling Out, according to the Digital Evolution Index which identifies how a group of countries stack up against each other in terms of readiness for a digital economy.

The only way these countries can jump-start their recovery is to redouble on innovation and continue to seek markets beyond domestic borders.

The Digital Evolution Index (DEI) developed by the Fletcher School at Tufts University is derived from four broad drivers: 

  • supply-side factors (including access, fulfillment, and transactions infrastructure)
  • demand-side factors (including consumer behaviors and trends, financial and Internet and social media savviness)
  • innovations (including the entrepreneurial, technological and funding ecosystems, presence and extent of disruptive forces and the presence of a start-up culture and mindset)
  • institutions (including government effectiveness and its role in business, laws and regulations and promoting the digital ecosystem).

The resulting index includes a ranking of 50 countries, chosen because they are either home to most of the current 3 billion internet users or they are where the next billion users are likely to come from.

Based on their performance during 2008-2013, they have been assigned to one of four trajectory zones:

  • Stand Out countries have shown high levels of digital development in the past and continue to remain on an upward trajectory.
  • Stall Out countries have achieved a high level of evolution in the past but are losing momentum and risk falling behind.
  • Break Out countries have the potential to develop strong digital economies. Though their overall score is still low, they are moving upward and are poised to become Stand Out countries in the future.
  • Watch Out countries face significant opportunities and challenges, with low scores on both current level and upward motion of their DEI. Some may be able to overcome limitations with clever innovations and stopgap measures, while others seem to be stuck.

Read the full article, Where the digital economy is moving the fastest