July 2010 The Information Dividend: International Information Well-being Index Prepared for BCS, The Chartered Institute for IT, by Trajectory Partnership
Contents 1. Introduction 3 2. Executive summary 4 3. Background 6 4. The Information Well-being index 8 5. Information Well-being index adjusted for GDP 10 6. Hypotheses and implications 13 BCS JULY 2010 2
Introduction BCS, The Chartered Institute for IT, is working to enable the information society. An important aspect of this is helping people understand how their lives can be improved by: A better understanding of information and information technology Improved access to information and information technology Better use of information and information technology One way that the Institute does this is by creating and/or contributing to public debates on major issues of social, economic or political consequence or interest. This index is a continuation of a report entitled The Information Dividend: Can IT make you happier? In that report the Institute sought to stimulate debate about the social contribution of information and IT to the happiness of nations and individuals. This was achieved through widespread media coverage and lively online debate. What the initial report s findings showed was that there is a correlation between access to IT and happiness, especially for women and the socially disadvantaged. Women from developing nations benefit in particular. There is a correlation between access to IT and happiness, especially for women and the socially disadvantaged. This paper; The Information Dividend: International Information Well-being Index, builds on that first report. Looking at 39 countries it compares the level of satisfaction of citizens with their access to and use of IT. Although it is anticipated that it will be the countries with the highest GDPs whose citizens benefit the most from IT, the Institute is aware that policy decisions and other factors will also determine how satisfied citizens will be. How nations with lower GDP but more satisfied citizens compare is of particular interest and may highlight practices and policies which could be adopted elsewhere. Similarly, in the future, how the UK compares will provide an indicator of how much the Digital Exclusion Taskforce has achieved and what remains still to be achieved. Elizabeth Sparrow, President, BCS, The Chartered Institute for IT BCS JULY 2010 3
Executive summary In May this year the Institute s report The Information Dividend: Can IT make you happier? established that there was a positive link between IT access and usage and increased life satisfaction. That report was based on over 35,000 responses to the World Values Survey from around the world. This report builds on those findings by creating the Information Well-being (IWB) Index. The index identifies which countries are getting the most benefit from their IT access and usage. A simple version of the IWB index shows a strong correlation with GDP, with the wealthier countries tending to lead the league table. This is largely because these countries have better IT infrastructure. However, a version of the IWB Index that adjusts for GDP shows a remarkably different league table with Zambia leading the way and affluent countries like Japan, France and Germany moving down the rankings (see table 1 page 5). Those countries that rise up the rankings on the adjusted index are interesting cases because they must be doing something, independent of their affluence, to make sure they get the most out of IT. This may be due to the importance placed on IT within public policy in those countries or other factors. Countries that fall down the rankings on this measure are underperforming in terms of IWB for a country with their level of affluence. These countries might want to consider why they are not delivering greater benefits from IT to their people. Countries that fall down the rankings on this measure are underperforming in terms of IWB for a country with their level of affluence. BCS JULY 2010 4
Table 1: Information Well-being Index Final Ranking Country Initial Ranking Change in ranking (+/-) (Adjusted for GDP) 1) Zambia 30 +29 2) Moldova 24 +22 3) Brazil 12 +9 4) Sweden 1-3 5) Netherlands 2-3 6) Burkina Faso 34 +28 7) Mali 37 +30 8) Uruguay 16 +8 9) Korea, Rep 7-2 10) Chile 14 +4 11) United Kingdom 4-7 12) Australia 5-7 13) United States 3-10 14) Finland 6-8 15) Colombia 23 +8 16) Italy 8-8 17) Ghana 33 +16 18) Argentina 18 0 19) Bulgaria 25 +6 20) Canada 9-11 21) Slovenia 13-8 22) Mexico 21-1 23) Malaysia 20-3 24) Indonesia 31 +7 25) Trinidad and Tobago 19-6 26) France 10-16 27) Germany 11-16 28) Romania 27-1 29) Ethiopia 39 +10 30) Poland 22-8 31) Vietnam 38 +7 32) Japan 15-17 33) India 36 +3 34) Russian Federation 28-6 35) Ukraine 32 +3 36) China 35-1 Source: BCS, The Chartered Institute for IT, 2010 BCS JULY 2010 5
Background In May 2010 BCS, The Chartered Institute for IT, published a report, The Information Dividend: Can IT make you happier? (see http://www.bcs.org/upload/pdf/info-dividend_1.pdf). The report was the first of its kind to explore quantitatively the link between access to and usage of information technology and well-being or life satisfaction. It found (based on 35,000 plus respondents in the World Values Survey) that IT has a positive impact on life satisfaction, even when controlling for income and other factors known to be important in determining well-being. The Information Dividend: Can IT make you happier? research also found that not only did IT have a direct positive impact on life satisfaction, it also had an enabling and empowering role leading to a greater sense of freedom and control which in turn leads to greater life satisfaction. This analysis builds on The Information Dividend: Can IT make you happier? research, which looked at the life satisfaction of individuals from a wide range of countries around the globe. The analysis reported here looks at the national level rather than the individual level. It explores how nations compare against each other in an international index of information well-being. BCS JULY 2010 6
Here Information Well-being (IWB) is defined as the extent to which citizens and consumers are able to use IT to communicate, maintain social ties and keep informed of events. Given the importance of a sense of freedom and autonomy in well-being we have constructed an index that incorporates not only the IT access and usage but also two measures of freedom and autonomy. We have called this the Information Well-being Index (IWB) and it is constructed of 11 different indicators as follows: 1. Population covered by mobile telephony (%) Source, World Development Indicators (WDI) 2. Mobile phone subscriptions per capita - Source, International Telecommunication Union 3. Broadband subscribers (% of total Internet subscribers) Source, WDI 4. International Internet bandwidth (bits per person) Source, WDI 5. Secure internet servers (per million people, 2008) Source, WDI 6. Proportion of respondents saying technology making my life easier Source, World Values Surveys (WVS) 7. Proportion of respondents favouring more emphasis on technology Source, WVS 8. Average sense of freedom and control in life Source, WVS 9. Proportion who see self as autonomous Source, WVS 10. Proportion who have checked news online in last week Source, WVS 11. Proportion who have used a computer in the last week Source, WVS In this report we present the IWB Index in two ways. First we present a simple index based purely on the indicators above. However, this index correlates strongly with GDP (not surprisingly given, for example, the way some of the indicators depend on the quality of IT infrastructure). Second, we present the IWB Index adjusted for GDP. This shows which countries are able to use IT to best effect independent of their affluence. Those countries that rise up the rankings on this measure are interesting cases because they must be doing something, independent of their affluence, to make sure they get the most out of IT. This may be due to the importance placed on IT within public policy in those countries or other factors. Countries that fall down the rankings on this measure are underperforming in terms of IWB for a country with their level of affluence. These countries might want to consider why they are not delivering greater benefits from IT to their people. BCS JULY 2010 7
The Information Well-being Index As mentioned above, Information Well-being (IWB) is defined as the extent to which citizens and consumers are able to use IT to communicate, maintain social ties, and keep informed of events. We have full data for 39 countries and the indicators are standardised, aggregated, and then rescaled from 0-1. We can thus produce a table ranking the best to the worst performers on the index (table 2 opposite). On the basis of this simple index Sweden performs best in terms of IWB, closely followed by the Netherlands and then the United States and the UK. Countries at the bottom of the index include Ethiopia, Vietnam and Mali. This reflects that IWB correlates strongly with GDP per capita, not suprisingly given the infrastructure related components of the index. This is illustrated in chart 1 (page 9). Table 2: Simple Information Well-being Index: Country Rankings IWB Index 1) Sweden 0.98 2) Netherlands 0.97 3) United States 0.92 4) United Kingdom 0.89 5) Australia 0.88 6) Finland 0.86 7) Korea, Rep 0.84 8) Italy 0.83 9) Canada 0.83 10) France 0.80 11) Germany 0.79 12) Brazil 0.78 13) Slovenia 0.75 14) Chile 0.74 15) Japan 0.74 16) Uruguay 0.73 17) Taiwan 0.72 18) Argentina 0.70 19) Trinidad and Tobago 0.64 20) Malaysia 0.63 21) Mexico 0.62 22) Poland 0.61 23) Colombia 0.60 24) Moldova 0.59 25) Bulgaria 0.59 26) Rwanda 0.37 27) Romania 0.55 28) Russian Federation 0.52 29) Serbia 0.52 30) Zambia 0.50 31) Indonesia 0.44 32) Ukraine 0.41 33) Ghana 0.39 34) Burkina Faso 0.38 35) China 0.37 36) India 0.34 37) Mali 0.33 38) Vietnam 0.32 39) Ethiopia 0.16 Source: BCS, The Chartered Institute for IT, 2010 BCS JULY 2010 8
Chart 1: Information Well-being and GDP per capita $35.000 United States GDP per capital ($) $30.000 $25.000 $20.000 $15.000 $10.000 $5.000 $0 Ethiopia Vietnam India Mali China Russian Federation Ukraine Romania 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Source: BCS, The Chartered Institute for IT, 2010 IWB Index Poland Argentina Trinidad and Tobago Chile Malaysia Mexico Bulgaria Colombia Indonesia Ghana Burkina Faso Zambia Moldova Slovenia Canada United Kingdom Germany Australia Japan Finland Italy Sweden France Uruguay Brazil Korea, Rep. Netherlands BCS JULY 2010 9
Information Well-being Index adjusted for GDP Given the obvious and important impact of GDP on the IWB Index, a more informative presentation of the data would be to take account of the impact of GDP. This would show which countries are able to use IT to best effect independent of their affluence as measured by GDP. Those countries that rise up the rankings on this measure are interesting cases because they must be doing something independent of their affluence to make sure they get the most out of IT. This may be due to the importance placed on IT within public policy in those countries or other factors. Countries that fall down the rankings on this measure are underperforming in terms of IWB for a country with their level of affluence. These countries might want to examine why they are not delivering greater benefits from IT to their people. Table 3 (page 11) shows the IWB Index adjusted for GDP. The first column shows the simple IWB Index as before. The second column, labelled IWB predicted shows the level of the IWB that we would have expected on the basis of just GDP. This is done using a regression analysis that relates IWB to GDP per capita only. The third column, IWB (actual minus predicted) shows the difference between actual IWB and that predicted on the basis of GDP alone. For countries with a positive number that means that the actual IWB is higher than we would have expected on the basis of just GDP, while a negative number means that it is less than would be expected. BCS JULY 2010 10
Table 3: Information Well-being Index adjusted for GDP IWB (predicted) IWB (Actual minus predicted) Sweden 0.47 Zambia 0.83 Netherlands 0.40 Moldova 0.80 United States 0.12 Brazil 0.52 United Kingdom 0.17 Sweden 0.47 Australia 0.16 Netherlands 0.40 Finland 0.08 Burkina Faso 0.35 Korea, Rep 0.26 Mali 0.32 Italy 0.03 Uruguay 0.30 Canada -0.03 Korea, Rep 0.26 France -0.09 Chile 0.25 Germany -0.10 United Kingdom 0.17 Brazil 0.52 Australia 0.16 Slovenia -0.05 United States 0.12 Chile 0.25 Finland 0.08 Japan -0.29 Colombia 0.04 Uruguay 0.30 Italy 0.03 Taiwan Ghana 0.02 Argentina 0.01 Argentina 0.01 Trinidad and Tobago -0.08 Bulgaria -0.02 Malaysia -0.06 Canada -0.03 Mexico -0.05 Slovenia -0.05 Poland -0.22 Mexico -0.05 Colombia 0.04 Malaysia -0.06 Moldova 0.80 Indonesia -0.07 Bulgaria -0.02 Trinidad and Tobago -0.08 Rwanda France -0.09 Romania -15 Germany -0.10 Russian Federation -33 Romania -0.15 Serbia Ethiopia -0.21 Zambia 0.83 Poland -0.22 Indonesia -0.07 Vietnam -0.26 Ukraine -0.39 Japan -0.29 Ghana 0.02 India -0.30 Burkina Faso 0.35 Russian Federation -0.33 China -0.49 Ukraine -0.39 India -0.30 China* -0.49 Mali 0.32 Vietnam -0.26 Ethopia -0.21 Source: BCS, The Chartered Institute for IT, 2010 *There is no adjusted data for Taiwan, Rwanda or Serbia BCS JULY 2010 11
This approach to the analysis, which takes account of GDP, results in a strikingly different league table of IWB. Zambia comes top of the list, because it beats expectations for IWB based on its GDP by the most. China is bottom of the league in that it underperforms most in terms of actual IWB relative to that expected for a country with its level of GDP. Some countries remain relatively unchanged in the rankings. Sweden and The Netherlands move to fourth and fifth respectively in the adjusted table (compared to first and second in the unadjusted table). The UK falls from fourth place in the unadjusted table to eleventh place in the adjusted table. The United States falls even further, from third place in the unadjusted table to thirteenth in the adjusted table. Table 4 opposite summarises the changes in rankings between the two approaches to calculating the index, and illustrates the changes when the IWB Index is adjusted for GDP. This sheds further light on the IWB Index, with Mali showing the greatest climb in the rankings (+30) on the adjusted basis, just beating Zambia (+29) into second place. The biggest loser on this basis is Japan, which drops 17 places in the rankings, closely followed by France and Germany which both drop 16 places. Table 4: Information Well-being Index: Adjusted Country Rankings Initial Country Adjusted Change Ranking Ranking (+/-) 1 Sweden 4-3 2 Netherlands 5-3 3 United States 13-10 4 United Kingdom 11-7 5 Australia 12-7 6 Finland 14-8 7 Korea, Rep 9-2 8 Italy 16-8 9 Canada 20-11 10 France 26-16 11 Germany 27-16 12 Brazil 3 +9 13 Slovenia 21-8 14 Chile 10 +4 15 Japan 32-17 16 Uruguay 8 +8 18 Argentina 18 0 19 Trinidad and Tobago 25-6 20 Malaysia 23-3 21 Mexico 22-1 22 Poland 30-8 23 Colombia 15 +8 24 Moldova 2 +22 25 Bulgaria 19 +6 27 Romania 28-1 28 Russian Federation 34-6 30 Zambia 1 +29 31 Indonesia 24 +7 32 Ukraine 35-3 33 Ghana 17 +16 34 Burkina Faso 6 +28 35 China 36-1 36 India 33 +3 37 Mali 7 +30 38 Vietnam 31 +7 39 Ethiopia 29 +10 Source: BCS, The Chartered Institute for IT, 2010 BCS JULY 2010 12
Hypotheses and implications Having previously established a positive link between IT access and usage and increased life satisfaction, the purpose of this report was to highlight any differences in the way individual countries are delivering the benefits of IT access and usage to their populations. The IWB Index shows a wide variation in the experiences of the different countries, particularly when adjusted for GDP. There may be many possible explanations for these differences (and the Institute has plans for further research to investigate these). At this stage a number of hypotheses suggest themselves. First, it is striking that a number of the countries near the top of the adjusted league table have implemented positive public policies to increase IT access and usage. Zambia, for example, was only the second country in Sub-Saharan Africa to pioneer internet use. In 2005 the government set up a `Universal ICT Fund. The evidence so far is that this has had benefits for the country s urban population in particular. Similarly, the Brazilian government has taken a number of initiatives to roll out IT access to its poorer communities. Also, given the connection previously established between IT usage and access, having a sense of freedom and control in one s life and life satisfaction, it is perhaps not surprising to see China, with its tightly regulated internet access, at the bottom of the league table. We plan to explore these hypotheses, among others, in future research into the link between IT access and usage and life satisfaction. BCS JULY 2010 13