In digital economies, the new business models of companies – and the associated value proposition for clients – will be more important than the underlying technology that is driving digitalisation, World Economic Forum (WEF) Global Information Technology Report (GITR) editor and Insead global indices executive director Bruno Lanvin said on Monday.

All industries will transform as the length of the path from supply to demand is shortened and companies must act accordingly to remain relevant. Lanvin referred to the “überisation” of all industries, in which on-demand services would increasingly be accessed by a massive number of people and companies, requiring new business models.

He pointed to the music industry in the mid-2000s, which was trending downward before multinational technology company Apple’s iTunes enabled consumers to buy single pieces of music on their devices, which led to the so-called “long tail” phenomenon taking effect. This led to a shift that saw music consumed through digital channels and a mini-boom in the music industry, which led to the music industry changing its business models.

“We need banking . . . but do we need banks?” Lanvin asked, pointing out that many industries could be “überised”, as was happening in the taxi and hotel industries. Even with incremental innovation, a basic service that is widely consumed can induce a change in industry business models.

The GITR 2016 titled ‘Innovating in the Digital Economy’ measured 139 countries around the world on their enabling environments for information technology (IT), their readiness and IT infrastructure, their use of IT systems and the impact of these systems over time.

The report then looked at the amount of digital innovation produced by each country, typically in the form of patents and licences, and then at the potential opportunity for innovation that each country’s profile indicates.

Noting that innovations were, predictably, realised mainly by wealthy countries, Lanvin emphasised that the potential for innovation was remarkably similar across the spectrum of developed and developing countries, but that realising that potential was associated with an enabling society.

Enhancing the capacity of and support for innovators to innovate, specifically supporting small and medium-sized enterprises through enabling IT infrastructure and access, and advanced, aggressive IT policies will translate into more digital innovation.

“Every country in the world has the capacity to become part of global innovation. Lessons from the countries that most effectively innovate, such as Switzerland and Singapore, indicate that the whole of society, including businesses, government and individuals, must support innovation and the use of digital systems.”

Further, the leading role of the business sector in these countries, complemented by strong support from government, translated into greater competitiveness of companies, more jobs and higher growth, highlighted Lanvin.

Noting that South Africa had improved its rankings dramatically from 75 to 65 over the past year, he emphasised that affordable access and top-level IT infrastructure were necessary for a country to participate in the global innovation game.

“The true measure of whether IT is having a meaningful impact on a country is not whether the top 1% of digital companies are using the systems, but whether the IT systems are used in traditional areas of the economy, such as agriculture and mining in South Africa.

“The real digital revolution will only be achieved once the use of the systems pervades the base of the economy, and this is where the acceptance by and culture of innovation of businesses, government and individuals in society comes to the fore.”