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Published: August 28, 2012
 / Autumn 2012 / Issue 68

 
 

Digitization and Prosperity

The Digitization Imperative

For some policymakers, the statistics on digitization will be a wake-up call. The metrics will reveal gaps in a country’s capabilities — and ways in which it is not equipped to compete with other countries. Other policymakers will be pleased to see that they are relatively well prepared — but for how long?

The results also confirm a feeling that many policymakers share: that digitization can catalyze dramatic economic, social, and political improvements. Anecdotal evidence abounds: Water utilities have installed sensors that reduce leakage, saving water and money; healthcare organizations send text messages to pregnant women with advice on prenatal care, creating a healthier new generation even before it is born; fleets of delivery trucks use GPS devices to find shorter routes, cutting down on their greenhouse gas emissions. But until the impact is quantified, nobody quite knows how much to emphasize digitization, or how its impact compares to that of other factors. We hope this analysis can help demonstrate the high leverage that can accrue from investment in digitization beyond simple broadband access.

In his book The Shield of Achilles: War, Peace and the Course of History (Knopf, 2002), constitutional historian Philip Bobbitt argued that the world was going through a fundamental shift in the prevailing view of the purpose of government, from the 20th-century nation-state, which derived its legitimacy by guaranteeing the welfare of the nation’s people, to the 21st-century “market state,” which will focus on expanding opportunities for its citizens.

The embrace of digitization is, perhaps, an example of that shift. Indeed, nowhere are the benefits of the market state more evident than in ICT. National governments have learned that there are limits to their role as welfare guarantors. They cannot protect their citizens indefinitely against the vicissitudes of the global economy. But by advancing the cause of digitization, they can become market makers, building their own capabilities — and those of their citizens and businesses — to raise the level of opportunity for their entire population.

Reprint No. 00127

Author Profiles:

  • Bahjat El-Darwiche is a partner with Booz & Company in Beirut. He specializes in communications, media, and technology, with expertise in telecom-sector growth strategy, policymaking and regulatory management, digitization business and operating models, and strategy-based restructuring for ICT companies.
  • Milind Singh is a principal with Booz & Company in Dubai. He focuses on sector policy and development strategy for the telecommunications and ICT industries.
  • Sandeep Ganediwalla is an associate with Booz & Company in Dubai. He specializes in analysis, performance, and strategy for the telecommunications and ICT industries.
  • Also contributing to this article were Booz & Company senior partner Karim Sabbagh and partner Roman Friedrich, along with Raul Katz of Telecom Advisory Services LLC.

 

 
 
 
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Resources

  1. Roman Friedrich, Michael Peterson, and Alex Koster, “The Rise of Generation C,” s+b, Spring 2011: How digitization is fostered by people born after 1990: a connected, communicating, content-centric, computerized, and community-oriented cohort.
  2. Art Kleiner, “Philip Bobbitt: The Thought Leader Interview,” s+b, Spring 2004: A long-range view of the evolution of the concept of government, with immense implications for digitization and business leadership in general.
  3. Karim Sabbagh, Roman Friedrich, Bahjat El-Darwiche, and Milind Singh, “Maximizing the Impact of Digitization,” Booz & Company white paper, 2012: The paper from which this article was adapted, with more detail on the relationship between digitization and measures of quality of life and economic growth.
  4. For more thought leadership on this topic, see the s+b website at: strategy-business.com/technology.