Pakistan ranked 63rd in e-friction index

LAHORE (MEDIA )

Pakistan ranked 63rd of the 65 countries in the e-friction index released by the Boston Consulting Group that deprive its entrepreneurs of unlimited business opportunities available around the globe. China and India are ranked above Pakistan, according to a report.

The index examined the current sources of “e-friction” that prevent consumers, companies and countries from realising the benefits of the online economy, it said.

The four spheres that form the basis of the index include friction faced by the internet users in infrastructure, industry, individual and information. The friction is calculated from zero to 100 points with zero donating no friction at all and 100 points to extreme friction.

Infrastructure e-friction is the friction that reduces opportunities to access the internet. It has a weightage of 3/6 in the index, the report showed.

Pakistan secured 61st position in infrastructure with 68 percent friction score. India was placed lower at 62nd position, China was at 53rd and Bangladesh surprisingly is placed much above Pakistan and India at 57th, it said.

On e-friction in industry, Pakistan with the friction score of 65 percent is at 54th position, India at 33rd, China at 36th and Bangladesh is at 63rd. Industry friction is that which keeps companies from adopting the internet.

Individual e-friction is described by the Boston Group as the one that deter consumers from engaging in the internet activity. Pakistan was ranked 63rd in this sphere with a friction score of 88 percent. India was ranked 51st, China 47th and Bangladesh 64th with a friction score of 90 percent, according to the report.

On information e-friction Pakistan was placed at 64th position with the friction score of 95 percent, India was ranked 60th, China 57th and Bangladesh is at 36th with the friction score of 60 percent. This is the friction related to the availability of internet.

On the basis of these scores, Pakistan was the country with highest e-friction after Bangladesh and Nigeria. Sweden was the most friction-free country, while China and India were ranked 41st and 57th.

The report on e-friction index revealed that the digital economy accounts for a larger share of the overall economy in low-friction countries than it does in high-friction countries.

The difference is around 2.5 percent of GDP. Although there are several reasons for this discrepancy, high-friction countries can start closing the gap by identifying and addressing the sources of e-friction. This has the potential to add significant value to their economies, it showed.

The report also revealed that a single set of technical rules and protocols enabled anyone who could get online to trade goods, services, ideas and information with anyone else—anywhere. No tariffs, taxes, or technology controls (other than limits to access) slowed things down. The internet put a limitless array of products, services and information at consumers’ fingertips and enabled businesses, with minimal investment, to reach new markets and customers, it said.

Inevitably, the report continues as the digital economy has matured sources of friction both new and old have taken hold, constraining free exchange and slowing growth.

Companies find, for example, that they don’t have the necessary information and communications technology (ICT) skills to take full advantage of their e-commerce potential, it showed.

Small businesses looking to expand online are confronted with the data security issues that were not problems in the offline world.

The report states that most of these sources of friction are found at the national or local levels. They are related to infrastructure, access, cost and outdated regulations; they are the result of the inability of consumers and businesses to get online and engage with content effectively because of inadequate education, training, or resources; and they are imposed by the governments in the form of restrictions on certain forms of content. Some sources of friction are more fundamental in nature than others.

It also revealed that the digital revolution has substantially redefined trade in less than two decades and it continues to be a huge driver of economic activity today, as the developed world slowly emerges from recession and red-hot growth cools in the developing markets.

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