economist Archives

June 22, 2022

Copenhagen, Amsterdam, Beijing, London & Seoul are the top 5 digital cities in the index
European cities ran highly successful traffic management systems, while Beijing applied digital technologies to tackle air pollution and optimise utilities and sharing economy
Involving citizens in design of smart city schemes underpins meaningful inclusion – a key aspect of successful smart city projects
Smart city schemes delivered major public health benefits in areas like telemedicine, covid management and remote monitoring of patients

TOKYO, JAPAN – Media OutReach – 22 June 2022 – The Digital Cities Index 2022, produced by Economist Impact and supported by NEC, is an inaugural ranking of 30 global cities across four thematic pillars: connectivity, services, culture and sustainability. Of the top 10 cities of the index, four are in Europe (Copenhagen, Amsterdam, London and Paris), four are in Asia Pacific (Beijing, Seoul, Sydney, Singapore) and two are in the US (New York and Washington DC).

Copenhagen, Amsterdam, Beijing, London & Seoul performed the best, with successful open data projects and major strides in smart technology-powered sustainability projects like utility management. Cities with very defined goals realised the greatest benefits: European cities ran highly impactful traffic management systems, whereas Beijing made progress using applied digital technologies – tackling air pollution, optimising its utilities and promoting its sharing economy. The Atlantic nation cities led in open data innovation with a boom in travel and mobility apps.

Sustainability was the biggest impact area highlighted by the White Paper, with leading smart cities realising major gains in air quality through smart utility management. Sustainability brought the highest overall scores, with Copenhagen, Seoul and Toronto scoring highest for their use of digital technology to support urban sustainability.

Copenhagen and Singapore were the most connected cities, followed by Zurich, Beijing and Sydney. Singapore’s strategy for developing digital connectivity is built on the premise that AI, 5G and cyber security will drive the country’s growth and innovation post-covid. Smart cities are anticipated to drive economic growth: 5G alone will enable an estimated US$660 billion global mobility and transportation market by 2035.

Unaffordable, unreliable or inaccessible internet services impact other city level goals. Half-a-million households reportedly lack a reliable internet connection in New York City, for instance, disadvantaging low-income children for remote learning. By contrast, Washington DC has offered low-cost or free services and devices to families unable to afford a broadband subscription and Paris has the most affordable mobile data of all the cities analysed.

Ritu Bhandari, manager, policy and insights at Economist Impact, noted: “Smart cities will be safer, cleaner and more inclusive urban landscapes, where citizens enjoy better public health and services, more efficient transport and major economic improvements to be shared as public goods. The index highlights how outlier cities are leveraging technology to improve quality of life for millions of citizens around the world. While we see strong leadership from cities in Western Europe, the table is led by major cities from a wide geographical spread. The most significant improvements were delivered against tightly defined goals – a critical success factor for urban digital transformation.”

Since the pandemic, digital technologies have enabled real progress in public health. In Asia, apps were central to managing covid-19, while telemedicine and real time remote monitoring of chronic patients has marked digitisation everywhere. In New York, for instance, a diabetes-prevention initiative for adults has reduced the risk of type 2 diabetes in high-risk individuals by 58%.

Singapore, São Paulo and New Delhi ranked the highest for their delivery of digital municipal services. New Delhi ranks high in part because of the success of Aadhar, India’s ground-breaking national digital identity scheme. In Korea, Metaverse Seoul, announced in November 2021 by the Seoul Metropolitan Government, will provide citizens with access to government services via the metaverse.

The report’s authors note that involving citizens in the design of smart city schemes underpins meaningful inclusion, a critical success factor for smart city projects, along with delivery against tightly defined goals.

Download the full index results, report and infographic on: economistimpact.com/digitalcities

Digital Cities Index 2022 results:

About Digital Cities Index 2022

The Digital Cities Index (DCI) 2022 is an inaugural ranking of 30 global cities across four thematic pillars: connectivity, services, culture and sustainability. Combining quantitative and qualitative analysis, and including a survey of 3,000 residents spread across all cities in the DCI, the results show how cities are performing in terms of both quantitative metrics like internet speed and qualitative factors such as the presence of strategies, policies and plans for technologies like 5G and AI.

About Economist Impact
Economist Impact combines the rigour of a think-tank with the creativity of a media brand to engage a globally influential audience. We believe that evidence-based insights can open debate, broaden perspectives and catalyse progress. The services offered by Economist Impact previously existed within The Economist Group as separate entities, including EIU Thought Leadership, EIU Public Policy, Economist Events and SignalNoise.

Our track record spans 75 years across 205 countries. Along with creative storytelling, events expertise, design-thinking solutions and market-leading media products, we produce framework design, benchmarking, economic and social impact analysis, forecasting and scenario modelling, making Economist Impact’s offering unique in the marketplace. Visit www.economistimpact.com for more information.

About NEC

NEC Corporation has established itself as a leader in the integration of IT and network technologies while promoting the brand statement of “Orchestrating a brighter world.” NEC enables businesses and communities to adapt to rapid changes taking place in both society and the market as it provides for the social values of safety, security, fairness and efficiency to promote a more sustainable world where everyone has the chance to reach their full potential. For more information, visit NEC at https://www.nec.com

June 3, 2022

As nearly half of banking executives report serving customers via digital channels to a large or great extent, signs point to increasing recognition of fintechs as partners

In a global survey of 300 C-suite banking industry executives, 54% say their financial institutions have faced greater competition over the past three years from digital alternatives. However, these executives also indicate that they are better positioned to compete. Notably, 84% of respondents reported that they have, to some extent or more, the necessary technological tools to create new digital products and services. The survey was conducted for a new report¹ from Economist Impact¹, “Threat assessment 2022: digital competition in global finance,” which was commissioned by WSO2, a leader in digital transformation technology.

In addition to reviewing the competitive landscape, the report examines how banking institutions are addressing cultural change, embracing digital skills, and relying on technology to achieve a competitive advantage. The full report is available here.

Banks Rise to the Digital Competition Challenge

Many of the banking firms have responded to the competition by investing in their digital presence. Among survey respondents, 47% say they are serving customers via digital channels (online or mobile applications) to a large or great extent, and 77% of these executives predict their organization will serve customers via digital channels to a large or great extent over the next two years.

“All signs in the Economist Impact report point to established financial institutions successfully rising to the digital challenge,” said Eric Newcomer, WSO2 chief technology officer. ”A majority of survey respondents say they have the necessary tools, are culturally ready, and have the talent needed to create new digital products and services, which to me represents significant change in the industry dynamic. ”

At the same time, the growth of new digital entrants in the banking sector is shifting views on who is a competitor versus a potential partner. Among executives surveyed, 26% identified increasing competition from banking as a service (BaaS) or embedded finance, such as from non-financial firms including technology companies, and telecoms providers, among others.

Meanwhile, only 12% of survey respondents listed increasing competition from financial technology (fintech) companies—in stark contrast to the widespread fear of competition from fintechs just a few years ago. Notably, the Economist Impact report cites a 2021 report² from banking consultancy Cornerstone Advisors, which found that 48% of banks surveyed had partnered with fintech startups over the past three years.

“The intense competition facing banks is leading to unprecedented digital collaboration,” said Seshika Fernando, WSO2 vice president of banking and financial services. “Banks once jealously guarded their data on proprietary systems to grow their customers and revenue share. Today, they are accelerating their growth by partnering with fintechs to add new services, embedding banking-as-a-service solutions in online retail offerings, and tapping the insights of agencies with big data expertise.”

June 2, 2022

▪ More than three in four consumers expect their countries to become predominantly cashless within the next five years, but this move towards a cashless society is at a crossroads and varies greatly between countries.
▪ Almost four in ten consumers expect their governments or central banks to launch a central bank digital currency (CBDC) in the next three years.
▪ 37% of consumers expect their governments to officially make cryptocurrencies legal tender for transactions in their countries.
▪ Both consumers and institutions see government regulations as a barrier in the move to a cashless society, but there are clear signs this is changing, with frameworks, approaches, laws and pilot projects being introduced in several countries globally.
▪ Institutional investors and corporate treasurers expect consumer demand for digital currencies to increase. This may be intensified by the move to the metaverse, and in particular the rise of non-fungible tokens (NFTs).

HONG KONG SAR – Media OutReach – 2 June 2022 – Digimentality 2022: Fear and favouring of digital currency, a new report from Economist Impact commissioned by Crypto.com, provides a gauge of changes in consumer sentiment toward digital currencies and the trend toward a cashless society.

In 2020 and 2021, Economist Impact conducted surveys to measure the relative acceptance of digital currencies and other digital payment methods, and found that the trend towards a cashless society was growing stronger. A new survey of 3,000 consumers, and another of 150 institutional investors and treasury management respondents was launched in January and February 2022 to assess how sentiment around digital currencies has changed in the past year.

The survey finds that while the share of respondents who report that they always (as close to 100% of purchases as possible) use digital payments instead of banknotes, coins, or credit cards has remained largely similar over the past two years at 24%, more than three in four consumers expect their countries to become largely cashless within the next five years.

In fact, 18% of respondents say the country in which they live will become cashless in the next year or two, compared with 17% in 2021 and 14% a year earlier. In keeping with this trend, only 13% now say their country will never become cashless compared with 19% in 2021 and 28% in 2020.

The significance of governments’ role in this shift toward a cashless society is made clear by the survey results. For instance, among those who believe their country will become cashless, government and the public sector is seen as the biggest driver of this (49% compared with 27% in 2021).

This echoes findings from the institutional survey that regulations can enable acceptance and adoption. On the flip side, government regulations are also picked as one of three main barriers to becoming cashless by more than one in four (27%) of consumers, up from 20% in 2021.

Additionally, 37% of consumers surveyed expect their governments or central banks to launch a CBDC in the next three years. A similar share expects them to make cryptocurrencies legal tender for transactions in their countries.

The optimism around CBDCs is seen among institutions as well, with 65% saying they expect them to replace physical currencies in their countries, up from 56% in 2021. There is also optimism around growing understanding and trust of digital currencies—for example, only 35% consider that a primary obstacle to greater institutional investor or corporate treasury use of open-source digital currencies, down from 47% a year earlier. However, a larger share (41%) view regulations as a barrier this year than they did last year (32%).

Charles Ross, principal at Economist Impact and editor of this report, says: “The results of this year’s research show considerable development in the ecosystem for digital assets and currencies globally. Both consumers and institutions are more optimistic about the move to cashless today than they were a year ago and more interested in digital assets. While some barriers remain—and market fluctuations such as those we have witnessed in the crypto markets in recent months can test expectations—the shift away from physical to digital money is well underway.”

Visit impact.economist.com/projects/digimentality-2022/ for the full report.

March 17, 2020

THE START of February seems an eternity ago. Then, almost all concern about the coronavirus outbreak was focused on China, home to more than 99% of confirmed infections. America had seven known cases and Italy just two. The epidemic had not even received its official name. Less than six weeks later, covid-19, as the disease is now known, has become a global pandemic (for full coverage of the pandemic, see our Covid19 tracker). Italy is under a country-wide quarantine. The virus is spreading rapidly in America. But China is gradually getting back to work, having wrestled its outbreak under control.

Financial markets have also been turned upside-down. In early February, China was the trouble spot, its equities among the world’s worst performers (their decline started after state media reported on January 20th that human-to-human transmission of the virus was possible). American stocks were, almost on a daily basis, climbing to record highs. Their positions have since been reversed. Equities have cratered throughout much of the world. The American stockmarket’s bull run, its longest on record, has come to a shuddering halt. Instead, it is China that stands as the world’s best-performing market of 2020. Granted, the CSI 300 index, a benchmark of China’s biggest companies, is down by about 5% since the start of January. But that looks good when indexes around the world have plunged far more sharply. American stocks are still down by about 15% this year even allowing for the giant rally just before trading ended last week. ChiNext, a board for high-tech companies that is meant to be China’s answer to Nasdaq, is up by more than 10% this year

Source: The Economist

March 17, 2020

Germany partially closed its borders with Austria, Denmark, France, Luxembourg and Switzerland in an effort to slow the spread of the new coronavirus. Although goods and cross-border commuters can still enter and leave the country, other travellers are being turned away. The measures are an abrupt reversal by Germany’s chancellor, Angela Merkel, who had only days ago vowed to avoid such action. Later that day Ursula von der Leyen, the president of the European Commission, proposed a 30-day halt to non-essential travel from across the external borders of the EU (and of members of the Schengen free-travel zone).

Digital Cities Index 2022: European Cities outperformed with open data projects and tightly defined sustainability schemes

More Banking Executives View Fintechs as Partners in Economist Impact Report on Digital Competition in Global Finance Commissioned by WSO2

Consumer Demand for Digital Currencies Expected to Increase, Economist Impact Study Finds

Control of the coronavirus gives China the world’s best-performing stockmarket

More than 80 countries have imposed travel bans to curb the new coronavirus