Cities rate confidence in digital transformation

  • In a study of 45 cities, firms in Bangalore, San Francisco and Mumbai display the greatest degree of confidence in their city’s digital transformation environment
  • Executives in developed world cities are some of the least confident, with those in Berlin, Tokyo and Yokohama providing the lowest barometer readings of the survey group
  • Almost half of businesses (48%) have considered relocating operations to a city with a more favourable external environment
  • Seven in 10 (69%) executives deem open government data important to their business, yet more than half (54%) think city governments make poor use of the data they collect

According to a new study released today by The Economist Intelligence Unit (EIU), business leaders in 45 cities around the world are relatively confident that they can find the support they need for their digital transformation efforts in the surrounding environment. Many city environments come up short, however, particularly in the supply of digital talent for firms and city governments’ sharing of public data.

In Connecting commerce: Business confidence in the digital environment, commissioned by Telstra, a leading telecommunications and technology company, business confidence in the local environment is particularly high in emerging market cities, which account for seven of the 10 highest readings in the Digital Cities Barometer, part of the report. The latter is derived from a survey of over 2,600 executives conducted across cities in Asia-Pacific, North America and EMEA.

Aside from talent and open data, other vital elements of the digital transformation environment include sources of financing, support structures such as accelerators and innovation labs, local development of new technologies, and ICT infrastructure. Should these fail to meet companies’ needs, many will move elsewhere. Nearly half (48%) of surveyed firms—and 53% in Asian cities —have considered relocating in the past three years to find a more conducive environment.

Digital ecosystems can thrive without the municipal government playing a proactive role, as suggested by the barometer readings in Indian cities. Well-targeted initiatives in areas such as data-sharing, however, can provide a significant boost to companies’ own digital projects. According to 54% of respondents, however, their city government makes poor use of the data it collects. That figure is highest in Asia’s cities.

Charles Ross, the editor of the report, said: “How supportive a digital transformation environment is hinges on many different variables, and its growth cannot be mandated by government. But far-sighted municipal policies in areas such as education, open data, smart city development and support for entrepreneurship can lend considerable momentum to an ecosystem’s growth.”