China’s e-commerce infrastructure behind Malaysia and Thailand: Economist Intelligence Unit

The Economist Intelligent Unit (The EIU) today unveiled its report Preparing for Disruption: Technological Readiness Ranking 2018-2022, which analyses how future-oriented 82 business environments around the globe can be.

Three major categories were studied with reference to eight indicators.

Access to the internet: internet usage and mobile phone subscription.
Digital economy infrastructure: e-commerce, e-government, and cyber-security.
Openness to innovation: international patents, R & D spending, and research infrastructure.

Surprisingly, Australia (9.71875), Singapore (9.71875), and Sweden (9.71875) top the final ranking list, whereas US (9.4375) ranks 4th. Among the top 10 environments, Hong Kong and Taiwan share the 10th ranking with Austria, Belgium, and South Korea. Mainland China is not on the leading players’ list. A relatively low score is unsurprising given China’s limited access to global content, government-led innovation, low e-government performance, and cyber-security issues.

Technological Readiness Ranking (Image Credit: The Economist Intelligent Unit)

One surprising finding in the report is China’s ranking in e-commerce.

According to the report’s breakdown of scores, China is not the number 1 player in the sector. Among developing countries, China’s e-commerce rankings are behind those of Malaysia and Thailand.

The results may come from both the statistical side and China’s development model side. Calculation biases, proxy selection, data collection, model building and other statistical techniques are likely to influence ranking results.

As technological pursuits in China are very often growing in top-down governance and dynamic market mechanisms, it’s hard for static data and models to capture the full image of the country’s technology ecosystem. And it will be common to see China ranking differently in reports and studies.

The country, however, does rank 7th on the metric of international patents.

Meanwhile, China’s 2017 R&D spending accounts for 2.1% of GDP and has overtaken that of the EU. South Korea and Israel’s figures both exceed 4% of GDP, ranking as the world’s biggest R&D spenders.

According to the report, China receives over three-quarters of total R&D spending from enterprises. This is partially due to blurred lines between governmental sources and private business channels under some circumstances.

The report also shows that China’s Shenzhen-Hong Kong and Beijing are in the world’s top ten dynamic clusters of inventive activity group. Beijing’s active support in administrative, commercial, and technological resources have contributed to the achievements.