Analysis Instead of Summation: Why Indices Are Not Enough for ICT Policy and Regulation

Abstract

This paper demonstrates that analysing ICT indicators, based on benchmarking through the application of a dynamic diagnostic approach with context relevant indicators, provides a far more valid evidence-base for ICT policy and regulation than using the ranking of a country on one of the global ICT indices. Both approaches - composite indices and benchmarking - use the same data but differ in how the data is analysed. Both approaches have shortcomings. However, the benchmarking approach used in this paper is seen as the starting point for further analysis, showing clearly the linkages between individual indicators. Global ICT indices, as they are currently formulated, disguise these linkages by providing a composite measure, encouraging the perception that the index is the end result of the analysis, rather than the beginning. Ranking all countries, from poorest to the richest, leads to an automatically high correlation of an index to GDP per capita, making the latter the best predictor for the index score.

Keywords: Benchmarking, Indices, Global Competitiveness Ranking, Pricing