We could be forgiven for thinking that most of the world is handling most of its shopping and payments needs by digital means this far into the pandemic, but that isn’t the case.
As much progress as we’ve made toward bringing connected digital convenience and security into our lives since 2020 alone, research shows that much work remains in creating a truly connected economy within and between the world’s largest markets.
In the series “How the World Does Digital,” PYMNTS is breaking out six major trendlines identified in “Benchmarking the World’s Digital Transformation,” a PYMNTS and Stripe collaboration, from surveys of more than 15,100 respondents in 11 nations quarterly to gauge digital progress worldwide.
Remaining work in digital transformation creates “enormous upside for entrepreneurs, investors and consumers in the 11 countries we studied, including the most advanced economies” as PYMNTS ConnectedEconomy™ Index (CE Index) found “the digital transformation is only 27% of the way to its full potential across the 11 economies we studied.”
US Ranks Fourth in Connected Living
PYMNTS’ ConnectedEconomy™ is a framework for defining and measuring the digital transformation across 10 categories or “pillars” that form daily routine and the 40 activities within those pillars.
While PYMNTS found that 84% of the world’s population now owns a smartphone, 80% have at least 4G mobile internet connections, and with mobile connected devices numbering approximately 14 billion — getting close to averaging two connected devices for every person on Earth today — “Benchmarking the World’s Digital Transformation” found that connection is just step one.
Singapore ranks as the most connected economy, scoring 35 on the CE Index; Spain is second, ranking at 32; the U.K. is in third place at 31; and the U.S. indexes fourth at 30.
That may seem surprising, but U.S. consumers still do much of their shopping, banking and payments in traditional ways, including cash and checks. Economies such as Singapore are embracing digital-first lifestyles where use of digital alternatives indexes higher.
Pandemic acceleration aside for a moment, the report noted that “much of the effort over the last three decades has been to put critical digital infrastructure in place to connect more of the world to the internet and to put cheaper and better smartphones in the hands of consumers to access it. The diffusion of innovation in the economy almost always takes a long time.”
Now that a decade worth of digital infrastructure and upgrades have been made in the past two years alone, how quickly can the next phase of digitization be brought about? That will require innovation and utility as consumer’s digital demand becomes more sophisticated.
Leapfrogging the Physical
Being digitally connected is a prerequisite, but engagement with digital services after that point is the more revealing measure of how the world does digital.
That’s where companies need to focus more ingenuity and investment, as PYMNTS found that while 87% of the consumers surveyed are connected to the internet, just “19% of the populations in those countries, on average, are highly engaged in digital activities.”
At present, consumers in most markets studies are “much less highly engaged” in many of the 40 daily activities within the 10 connected economy pillars, but that’s changing.
As people grow more comfortable with relatively new digital-first lifestyles, the study stated, “we expect to see digital transformation progress as more people engage digitally in more activities more often and as innovators create more, better, relevant and valuable digital solutions that leapfrog physical substitutions or create new ways to access products or services.”
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