Credit, Collections & Insolvency News
Euler Hermes has published its third edition of its Enabling Digitalization Index (EDI), which analyses a country’s ability to provide an environment where companies can digitally transform successfully. The score is based on 5 components: regulation, knowledge, connectivity, infrastructure and size.
The United States (U.S.) topped the list with a score of 87 out of 100. The country’s knowledge ecosystem, its competitive market size and favorable regulation help U.S. companies digitalize quickly. Nevertheless, the U.S.’s infrastructure score has slightly declined from last year.
Denmark is a newcomer to the top 10, climbing up nine ranks to 3rd position this year. The country has benefited from a unique connectivity improvement and enhanced infrastructure. Overall, Western Europe stands out from other continents with 19 countries ranked in the top 30 and 4 out of 5 spots in the top 5.
Georges Dib, Economist at Euler Hermes said “China boomed into the top 10 at 9th place, up from 17th place in 2018. How? Thanks to regulation, such as shortening lengthy procedures to open a business. China’s breakthrough is a wake-up call: It partly explains the escalation of the U.S.-China trade feud into a digital cold war and the geo-politicization of the 5G technology race.”
Germany managed to maintain its 2nd place in the EDI (10 points below the U.S.), it lags behind when it comes to digital adoption indicators such as cloud computing and the number of ICT specialists.
Whilst the UK (5th in the EDI 2019, for the second year in a row), where user penetration in the mobile point-of-sale segment, and tech companies’ market share as a proportion of GDP are particularly low.
Ludovic Subran, Chief Economist at Euler Hermes said “Germany, the UK, France, Spain, Austria and Switzerland show a high potential for digitalization but adoption is still too low. They could see a rise of digital zombies among their worst-performing firms, thereby amplifying insolvency risk.”
Looking at 115 countries, Euler Hermes report identified that the optimal strategy is focusing on knowledge to close the digital gap (tech market capitalization, cloud computing, big data and e-orders) between potential and reality. This includes investing in skills (higher education and training, digital competences) and innovation capabilities (R&D spending, scientific publications).
