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What’s the digital health of your city?

Business and Enterprise

Posted on November 20, 2017

4 min read

San Francisco, Berlin, Singapore and Seoul are known for their vibrant technology ecosystems. However, new research by the Economist Intelligence Unit (EIU) highlights business confidence in these cities doesn’t necessarily match their reputation for innovation.

As part of a new ‘Connecting Commerce’ report commissioned by Telstra, the EIU has released the first ever Digital Cities Barometer, a ranking of 45 cities around the world across five key categories relevant to business performance: innovation and entrepreneurship; the financial environment; people and skills; development of new technologies; and ICT infrastructure.

The rankings show mixed results not only for traditionally strong innovation hubs, but also the five Australian cities surveyed – Adelaide, Brisbane, Melbourne, Perth and Sydney. This is despite government support at the national level in the form of the National Innovation and Science Agenda and the state level, such as Innovation SA. Instead, confidence is high in emerging Asian cities like Bangalore, Mumbai and Jakarta.

So what are some of the top performing cities doing that has led to high business confidence in the city’s digital environment, and what value can Australian cities derive from replicating some of this activity?

Grassroots activism and an entrepreneurial spirit

A vibrant digital ecosystem cannot be directed by government alone. A relatively intangible factor that needs to be considered is a city’s entrepreneurial spirit, which leads to activity being initiated at a grassroots level. Take for example the fact that 80 percent of business executives in Bangalore and 74 percent in Jakarta say their city’s ICT infrastructure is ineffective at meeting their companies’ digital transformation needs, as do more than 60 percent of respondents in San Francisco. Yet all three cities are ranked in the top 10 for overall confidence. Raw entrepreneurial spirit is at the heart of many of the world’s cities with soaring digital confidence. For Australian cities, it highlights the importance of having a passionate appetite for digital transformation.

Tapping into digital ecosystems for support

More than 40 percent of respondents in Shanghai (ranked 7th), Guangzhou (ranked 13th) and Singapore (ranked 14th) say innovation labs are helpful in addressing their digital challenges. All three US cities surveyed (New York, Chicago and San Francisco) also boast a plethora of formal and informal networks, communities and other support structures that can provide assistance. The Bay area, in San Francisco, is home to some of the oldest and largest accelerator networks, while in Shanghai the number of co-working spaces reportedly doubled in 2016 to nearly 500. Interestingly, survey respondents in four of the five Australian cities surveyed – the exception being Adelaide which cited innovation labs – point to more traditional structures, such as business associations, as the most helpful external sources of support for their digital initiatives. This suggests Australian cities might benefit by following the lead of confident cities and tapping into less traditional external resources, such as innovation labs.

Effective use of open government data

More than eight in 10 of the survey respondents (83%) say their firm makes at least occasional use of open government data provided by city agencies. The primary value of this data lies in leveraging it to provide new or improved services to customers, or identify new business opportunities. Start-ups in San Francisco, for example, have based their entire business models on the use of this data. One such example is BuildZoom, an online platform that matches homeowners looking to renovate their homes with local contractors. The platform catalogues licensing and building permit data made available by city governments across the US. Interestingly, 57 percent of Australian executives surveyed said their city governments make poor use of the data collected.

Find out how business leaders rate the digital health of your city.


About the Economist Intelligence Unit Connecting Commerce report

The Connecting Commerce report includes the Digital Cities Barometer which is based on a survey of 2,620 executives in 45 cities conducted in June and July 2017. The list of cities includes 23 in Asia-Pacific, 19 in EMEA and three in North America. Eleven industries are represented, with the greatest numbers of respondents coming from professional services, financial services, manufacturing, retail and education. C-level respondents account for 42% of the survey sample, with the balance being other senior executives.