The frontier technologies readiness index.

 To offer a comprehensive measure of each country’s preparedness for frontier technologies, UNCTAD has devised the frontier technologies readiness index. This combines indicators for ICT deployment, skills, research and development (R&D) activity, industrial capacity and access to finance. First launched along with the Technology and Innovation Report, the index covers 170 countries, including 124 developing countries. 

As in previous years, the index rankings are dominated by developed countries in Europe and North America (table III.1). 

Developing countries generally rank lower, but Singapore stands out in fifth position and performs well across all the index’s dimensions. Some BRICS countries also have good ranking positions, notably China, at 21; the Russian Federation, at 33; India, at 36; Brazil, at 38; and South Africa, at 52.1 Table III.1 also shows the rankings for five subindices.

 Among developing countries, China ranks first in R&D, third in finance and sixth in industry, and India ranks third in R&D. The countries least prepared for frontier technologies are predominantly in Africa and Latin America and the Caribbean. Between 2022 and 2024, the index shows that many developing countries experienced notable improvements. Argentina, Chile, China, North Macedonia and Uruguay, for example, increased their positions in ICT, thanks to significant rises in mean download speeds. Meanwhile, Bhutan, India, Morocco, the Republic of Moldova and Timor-Leste improved their positions in human capital, due to more years of schooling and a greater share of high-skill employment in their working populations. Angola and Barbados made progress in the R&D subindex, with more scientific publications and patents filed on frontier technologies. Armenia, Bahamas, Chad and Maldives moved up in the industry subindex due to higher shares of high-technology manufacturing exports. Trade data fluctuate and short-term changes should therefore be interpreted with caution. Burundi and Timor-Leste registered improvements in the finance subindex, with a higher share of domestic credit going to the private sector as a proportion of GDP that, if channelled toward productive investments, can support the adoption or development of frontier technologies. The frontier technologies readiness index highlights areas for improvement, to enable the development, adoption and adaptation of these technologies. It also shows the strengths and weaknesses of country groups. It is important to emphasize that differences in rankings may not accurately reflect the disparities in underlying capacities. Actual levels of readiness are better indicated by countries’ scores. Figure III.1 presents the average scores across the subindices for developed countries, developing countries and least developed countries (LDCs). As expected, developed countries consistently outperform in all dimensions of the readiness index. However, differences vary across subindices.  

The skills subindex reveals significant differences between country groups. On average, LDCs register scores that are less than half of those of developing countries and less than one third of those of developed countries. The difference between developed and developing countries is narrower on the ICT subindex, although LDCs remain some way behind developing countries. A similar pattern is observed in the R&D and industry subindices, with wide disparities between developed and developing countries, but narrower disparities between developing countries and LDCs. With regard to finance, differences among country groupings are less marked. It might be expected that countries with higher per capita GDP are better prepared for frontier technologies. 

Overall this is true but, as shown in figure III.2, some countries perform far better than their levels of income may suggest, as indicated by their distance from the regression line of the index score on GDP per capita. Among developing countries, outperformers are Brazil, China, India and the Philippines; among developed countries, outperformers are the Republic of Korea, Sweden, the United Kingdom and the United States. There are correspondingly large differences in their rankings for GDP per capita and their rankings for the overall index; for India, 76 places; for China and the Philippines, 49 places; and for Brazil, 41 places.  

These contrasts show that many countries have strong potential to seize the opportunities offered by frontier technologies and boost economic growth and overall development. A common feature of the better performing countries is greater R&D activity and stronger industry capacities, which enable them to keep pace with technological development and eventually lead in some frontier technologies. This highlights the importance of making efforts to improve a country’s innovation ecosystem. Later we will discusse policy efforts that support the adoption and development of AI. 

Outperformers compared to their economic performances show an average R&D score that is almost double with respect to other economies and an industry score that is about 50 per cent higher. It is also notable that the readiness index correlates positively with the number of AI publications (figure III.3). AI publications are among the variables of the R&D sub-findex and some correlation is expected. Nevertheless, the components contributing the most to the index score are those related to skills and industry and all of the subindices correlate positively with AI publications even when controlling for GDP per capita, population size and regional factors. Countries above the regression line produce more scientific knowledge than might be expected by their index score. For example, China, Germany, India, the United Kingdom and the United States show scientific strength in the field of AI.