More evidence: in Canada, consumer connectivity is weakest link

The Connectivity Scorecard scores again

The Len Waverman team, they of Connectivity Scorecard fame, have given us a brand new version for 2010 – and as usual, plenty of things to disagree over. But today I’m going to pass on the fine print and go straight to this chart from the Canadian pdf (main Web page).

From the 2010 Connectivity Scorecard

This chart shows gaps in performance between Canada and the corresponding best performing country. The three pairs cover government, business and consumer variables respectively.

The really interesting part is where Canada’s consumer variables stand next to the best countries: significantly worse, especially for infrastructure. The numerical gap in consumer infrastructure (Canada vs the best performer) is double – 0.96 vs 0.48. Our business infrastructure is behind by a much smaller proportion – 0.86 to 0.79. (The Scorecard assigns a higher weight in the final scores to business variables, but that’s another debate.)

With this evidence in hand, would you start designing a national digital strategy devoted to ICTs for business – which never mentioned consumer welfare?

Users not pipes

I really like how these guys are pushing the methodological envelope (all described in gory detail). Waverman sees the value in looking at how people actually use telecomm technologies – a sharp break with the outmoded school of thinking which is content to stop at household penetration numbers (which mean nothing experientially to real-life users). Thus:

“The Connectivity Scorecard that we have designed is an attempt to rank countries according to a measure of what we call “useful connectivity”. “Useful connectivity” or “usefully connected” are phrases that we use often in this report and in our presentational materials. […] The concept of “useful connectivity” is first and foremost an attempt to recognise that the economic value generated by connectivity depends not just on conventional measures such as broadband lines or computers connected, but also on who is using those lines — businesses or consumers — and how well they are able to use the lines […]” (main report, pp. 3-4).

The Scorecard also pays close attention to consumer welfare, an unusual slant in a business-oriented study. More envelope-pushing here too:

“For consumers, “utility” or consumer welfare, is of paramount importance. Consumers can subscribe to telephone service (or broadband service) based upon two considerations: (a) the value that they place on having access to the network, which is often called an “option value”, and (b) the value that they derive from actual usage of that network. Unfortunately, while the economics literature has ample theoretical discussion on the “option value” of access, there is little quantitative guidance about the proportion of consumer welfare derived from access versus the proportion derived from usage. In the absence of such evidence, we gave equal weights to the infrastructure and usage and skills sub-categories for consumers” (main report, p.6, note 4).

And on a less upbeat note:

  • Canada’s rank, 2008 – 4th
  • Canada’s rank, 2009 – 7th
  • Canada’s rank, 2010 – 9th