As digital transformation continues to disrupt industries and transform companies worldwide, countries around the globe are seeing increased opportunities for economic growth tied to digital business. While some countries are making it easy for companies, others are making it considerably harder—and it could have implications on your business, now and in the future.
According to the Harvard Business Review (HBR), while many experts have been looking at the overall ease of doing business in various countries across the globe for decades, very few, if any, look at the ease of doing digital business. As a result, Tufts University researchers Bhaskar Chakravorti and Ravi Shankar Chaturvedi set out to provide a new perspective, providing new insight into this often overlooked aspect of doing global business today.
Specifically, the study assessed the ease of doing digital business in 42 countries worldwide, looking at key factors like investment and policies and how they impact companies. For additional context, the researchers noted that while many companies have “elements” of digital technology as part of their business, they focused on companies that “have a digital platform as core to its business model.” Examples include e-commerce sites, digital media companies, businesses in the sharing economy, and online freelancer platforms.
Because doing digital business is different than doing traditional business, the researchers looked at more than digital infrastructure and technology. This included operational and human elements, including how to handle fierce competition, comply with tight regulations, and maintain flexibility in operations. To determine country rankings, the researchers created what they called an Ease of Doing Digital Business (EDDB) score, which factored in areas like the digital platforms themselves, as well as “foundational” factors like data availability and access.
According to the HBR article, the U.S. and U.K. performed well across the board with the Netherlands, Japan, Australia, and the Nordic countries being among the top performers as well. Additionally, some other notable countries stood out:
- Singapore: Thanks to e-commerce, a thriving sharing economy, and a vibrant population of freelancers, this southeast Asian country has a solid foundation for digital business. However, restrictions on data sharing and tight regulations impacted its score, making some aspects of digital business more difficult.
- South Korea: According to the HBR piece, sophistication of both infrastructure and consumers give South Korea a leg up for doing digital business. But, data accessibility is impacted by data localization requirements and laws.
- Estonia: A strong sharing economy and a commitment to innovation have made this Northern European country a growth engine for digital businesses. With a reputation for being more open to digital business than its neighboring countries, Estonia has made it easier for gig economy workers and companies to work together to manage compensation and to pay taxes.
To see the complete list of countries, including which ones have room for improvement and what it all means for your company, read the complete Harvard Business Review article.