World Dialogue on Regulation

Like the NRI, the DOI has three component indices, as can be seen on Figure 1. The Opportunity and Utilization component indices of the DOI are similar to the Readiness and Usage components of the NRI. However, the NRI has many more sub-indicators under each of the component indices. The Environment component of the NRI is only partially reflected in the DOI Infrastructure component index, since the NRI component includes Infrastructure along with Market, Political and Regulatory Environment.

Fig 1. Digital Opportunity Index (Click on here  to see the full size image)

When the DOI country rankings are mapped against NRI country rankings, as can be seen in Figure 2, we see that in general there seems to be some relationship between a country’s NRI rank and its DOI rank. So a country with a high NRI score usually is also ranked higher by the DOI. However, the relationship in rankings between the two indices decreases markedly as the rankings increases (lower ranking is better, higher is worse). Hence, countries with lower rankings tend to do worse with the DOI than the NRI. So countries like Uganda, Mozambique and Tanzania would receive higher rankings with the NRI than the DOI.

Figure 2. NRI-DOI Divergence (Click on here to see the full size image)

There are also significant outliers in this graph. For example, India which is ranked 40 by the NRI is ranked 119 by the DOI; Pakistan which is ranked 67 by the NRI is ranked 129 by the DOI; South Africa which is ranked 37 by the NRI is ranked 91 by the DOI; Malaysia which is ranked 24 by the NRI is ranked 59 by the DOI; Italy which is ranked 42 by the NRI index is ranked 28 by the DOI.

In my view, the variance in the DOI and NRI rankings are due to the DOI’s emphasis on infrastructure indicators where developing countries generally tend to do poorly compared to developed countries. Along with the Infrastructure component, the Opportunity component (Mobile coverage of population) and the Usage component of the DOI has indicators that essentially reflect the extent of ICT infrastructure deployment in a country. Because the NRI is more broad-based and includes other ICTs like TV and radio sets that the DOI does not include, developing countries tend to score higher than they would with the DOI.

The case of India and Italy illustrates some of the fundamental differences between the composite indices. According to the NRI, India scores higher (40) than Italy (42) which is an OECD country and belongs to the G8, the most influential group of developed countries. India scores higher because the NRI measures among other things, the availability of scientists and engineers, venture capital availability, ICT service exports, laws relating to ICT, quality of business schools, scientists and engineers in R&D, affordability of ICT services where India probably does better than Italy. India does poorly on ICT infrastructure but since it is only one cluster of indicators among dozens of other indicators in the NRI, the poor infrastructure score does not overwhelmingly influence the composite index. In the case of the DOI, because the Index relies mostly on infrastructure related indicators, India performs very poorly (119).

Despite the NRI’s many flaws that were dealt with in a previous article, it must be acknowledged that this composite Index is able to capture the ICT capabilities of countries like India that despite poor ICT infrastructure are able to play a significant role in the global market for ICT related services and products.