How to Become a Smart Society

Have you ever heard of the D5? It is a network of United Kingdom, New Zealand, South Korea, Israel and Estonia, five digitally most advanced nations in the world. While these are not exactly the countries most of us would place in such an exclusive group, they are focused on changing government's relationship with technology by adopting open standards and open-source software as well as making digital government more effective.

The concept makes sense. If we can digitally transform companies and industries, we can digitally transform countries as well to create smart societies. The concept of smart societies is focused on using digital technology to drive three outcomes: well-being of citizens, strength of the economy and effectiveness of institutions. Of course, the success is much harder to measure – how do we measure digital growth of a country and how do we compare it to others? There are no real international standards, so benchmarking is difficult.

There is something to measure

There are attempts, of course. One of them is the Digital Evolution Index from the Digital Planet 2017 Report, a benchmark that analyzes over 240 different digital indicators. It measures how far along are countries in developing their digital economies and what is their prospect for growth. They do this by analyzing supply and demand conditions, institutional environment and innovation and change factors.

The interesting thing about the report is that it measures momentum - pace of digitalization over time, as measured by the growth rate of a country’s digitalization score over an eight-year period. The momentum means that even highly digitally developed countries are in danger of stalling out, if they fail to keep up the pace of development. The rapid pace of development means that a country is in danger of moving backwards if it stands still.

Since momentum matters, countries need to focus on their key drivers of digital momentum to amplify and improve their growth. Momentum is hard to maintain and much easier to pick up – for example, poorly developed countries can focus on quick wins to gain it, such as enabling more widespread access to mobile internet. Developed countries, on the other hand, face slower growth because easy victories are no longer on hand.

What is the solution?

The authors of the report repeatedly emphasize that highly evolved countries have had a significant contribution from strong institutions: high levels of involvement by the government and policymakers in the shaping of the digital economies. It is the government’s responsibility to act and to drive the digitalization of the country and create smart societies.

And there is a lot of opportunity to create such smart societies. For example, the city of Chicago is using predictive analytics to improve health inspection schedules. The City of Auckland is aiming to become the world’s most livable city by improving its transportation infrastructure with intelligent intersections and by providing residents with access to real-time data through IoT-connected transport nodes, traffic lights and bus stops. Singapore, as always, is ambitious and is looking at driverless cars, cashless payments, robotics and technology enabled urban areas and homes.

At Microsoft, we are working with the five countries on many projects and have learned some of the most important factors: work without boundaries across silos, creation of a data strategy that ties together all data sources needed to achieve a goal and pilot solutions quickly to keep pace with the rapidly evolving digital world. These are the basic rules that also apply to any company attempting digital transformation.

When put this way, digital transformation may not be so difficult even for countries and societies – the focus needs to be on empowering citizens and delivering the best and the most convenient public services that drive the economy as a whole and the digital economy in particular. This is not something that can be left to chance and success requires sustained investments and effort.