What Is the Digital Adoption Index (DAI)?

The digital adoption index (DAI) is an index created to measure the adoption rates of technology.

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Originally developed by Microsoft and the World Bank, the tool helps gauge the digital and technological maturity of countries.

The index was introduced in the World Development Report 2016: Digital Dividends.

The reports authors noted that despite widespread technological dispersion across the world, there is great inequality when it comes to:

  • The benefits – or dividends – accrued from these technologies
  • Various countries’ ability to participate in the global economy
  • Job quality within labor markets

The report noted that technology accelerates growth in some areas, while other sectors fall behind. Within job markets, for instance, automation can threaten low-skilled jobs while benefiting higher-skilled jobs.

This uneven distribution of wealth and economic participation goes hand-in-hand with the uneven distribution of digital technology.

Part of the aim of the report – and the digital adoption index – is to measure this technology adoption on a country-by-country basis.

It focuses on three segments:

  • Business
  • People
  • Governments

Each measurement is normalized on a scale of 0 to 1.

The resulting number is the “grade” that determines the level of digital adoption. The purpose of this grade is, as mentioned, to help countries, groups, and individuals gauge their digital progress.

The report uses the digital adoption index to demonstrate the disparity of digital adoption across the globe.

More specifically, though, the report aims to help:

  • Increase digital dividends – growth, jobs, and service
  • Show how digital technology boosts innovation, efficiency, and service inclusion
  • Demonstrate the value of analog components to improve digital progress – regulations, digital skills, and accountable institutions

The conclusion of the report is that these analog components are vital to digital progress. That is, without a conducive environment, digital development cannot be successful.

Ultimately, countries that cultivate these analog conditions will help stimulate digital progress. And, as a result, they will reap the benefits of faster growth, more jobs, and better services.

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