2012 BCG e-Intensity Index Documents Widening Digital Divide
Governments Need New Approach to Policymaking to Reap Internet’s Advantages for Their Countries
London, October 23, 2012— South Korea, Denmark, Sweden, Iceland, and the U.K. top The Boston Consulting Group’s 2012
e-Intensity Index as they did in 2011, while several countries, including Brazil, China, Russia, and the Baltic states
(Lithuania, Latvia, and Estonia), are catching up quickly.
Many OECD countries, including some from the EU-15, are slipping down the e-Intensity Index rankings. The spread between
countries with highest and lowest scores has been expanding, doubling from the 2009 through 2012 indices. Government
policies are playing an important role in defining the differences between stronger and weaker performers.
The key findings of the 2012 e-Intensity Index are compiled in Adapt and Adopt: Governments’ Role in Internet Policy, the most recent report in BCG’s Connected World series, released today.
The e-Intensity Index ranks countries according to three gauges of Internet activity: enablement, which accounts for 50 percent of the total weighting, considers the quality of the infrastructure and the availability
of access; expenditure, 25 percent, assesses how much money is spent on online retail and online advertising; and engagement, 25 percent, measures how actively businesses, governments, and consumers are embracing the Internet. Despite the
assumptions made and the inherent margin of error, the index is able to show not only how one country compares with
others but also where each country’s strengths and weaknesses lie within the three dimensions.
Around the world, e-Intensity Index scores continue to rise—but far from evenly—with clear overperformers and
underperformers emerging. The average score in the 2012 Index was 52, up from 44 in 2011 and 27 in 2009. Countries that
rank high are building on their strengths while many at the bottom of the rankings struggle to make progress. The
average score of the countries in the lowest 10 percent rose from 5.7 to 14.4 from 2009 through 2012, whereas the
average score of the leaders in the top 10 percent increased from 115 to 184.3.
Important G-20 economies such as Indonesia, India, and South Africa perform weakly on the index even though their scores
are improving rapidly. China, Russia, and Brazil are stronger performers, and their e-Intensity Index scores are growing
fast. African countries, many of which are included in the index for the first time, are generally stagnant or slipping
slightly in the rankings. Senegal and Rwanda are performing better than their per capita GDPs might suggest.
“It’s increasingly clear that some countries ‘get’ the Internet—and its impact on economic activity—while others are
failing to fulfill their potential,” said James Purnell, a senior advisor to BCG and a former U.K. secretary of state
for culture, media, and sport. “Governments of the countries that are at the top of the rankings—or are rapidly moving
up—look to encourage Internet use among consumers and businesses and within government itself, because they recognize
that it can be a powerful edge in the competitive global economy, including job creation. Countries further down the
list risk falling further behind if they do not act.”
In recent years, multiple Central and Eastern European countries have undertaken efforts to build Internet enablement
and engagement. The Baltic states have been especially aggressive. Estonia’s EstWin program aims to provide every
household and business with fast fiber-optic network access by 2015. Latvia and Lithuania rank among the top five
countries for upload and download speeds.
Purnell pointed to the fact that many countries leading the e-Intensity Index have long followed explicit strategies
aimed at boosting Internet growth. Sweden was the first country in Europe to develop a broadband policy. South Korea has
used information and communications technologies to turn itself into an economic powerhouse. Hong Kong has steered
development through its Digital 21 Strategy, first published in 1998. About a decade ago, the Danish government issued
the first of four consecutive strategies that set aggressive timetables for digitalizing public services.
The new BCG report argues that in developing their Internet strategies, governments need to follow an adaptive style of
development—a style that is based on experimentation and adjustment, starting with current circumstances and taking into
account national strengths. Given the tremendous speed with which the Internet is changing consumer behavior, business,
and society, as well as the uncertainty about future developments, traditional approaches to strategy development simply
won’t work.
“Smart policymakers have to be flexible and learn from others,” Purnell said. “Most important, they need to assess the
economic areas in which their country can lead, and they have to make some big bets through which they risk getting
ahead of the technology—to give their countries the best chance for leadership.”
The 2012 BCG e-Intensity Index, which covers 85 countries—including all 27 EU countries, 14 countries on the African
continent, and most of Latin America and Asia—covers the four-year period from 2009 to 2012.
A Note to Editors
Other Internet indexes and rankings focus on network speeds and penetration, but BCG created the e-Intensity Index to
provide the most comprehensive cross-country assessment of the depth and breadth of Internet activity, by measuring
different countries’ supply of Internet infrastructure (enablement), the demand for and use of online retail and
advertising (expenditure), and Internet services (engagement). Historical e-Intensity Index scores back to 2009 have
been calculated for all countries.
To download a copy of the report, please go to www.bcgperspectives.com.
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