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About the Market Development Stages

The Digital Economy Score (DES) provides a framework to better understand the level of development of a digital economy with 4 main development stages (Inception, Start-up, Expansion, Consolidation), and also highlights the priorities relevant to the four building blocks: Policy & Regulation, Infrastructure, Innovation and Skills.

The four market development stages

Inception stage (DES up to 24 percent)

The country does not have the foundational digital rails in place (policy and regulation, ID infrastructure, phone ownership, agent network and digital financial services) to allow the development of digital services beyond voice and Internet. There are no providers offering mass-market digital services beyond telecommunication services. Citizens cannot rely on technology to access and use services in finance or other areas.

Moving beyond this stage requires investment from digital finance providers and building of mass-market services as a priority, and also requires the regulators to provide the right permission to providers. This period can take several years and concludes when the CEOs of digital finance providers are on board, systems have been created, products have been tested, pilot projects have been successfully completed, clients have been sensitized, and the regulator either issues “no objections” to providers or issues basic regulatory guidelines for new digital financial services.

Start-up stage (DES between 25 percent and 49 percent)

The country has the relevant foundational digital rails (see above) in place for citizens to access and use some basic digital services, mainly in the payment/finance sector. Several providers are offering mass-market digital financial services reaching the unbanked. Innovation is still in its infancy, with some incubators and starts-ups launching services and with limited use cases leveraging payment services.

Moving beyond this stage requires as a priority for digital finance providers to find the right balance of active customers and active, accessible agents to serve them and reach profitability. Some entrepreneurs see opportunities to leverage digital finance and pilot digital services in different domains (e.g. finance, agriculture, energy, health, education, ecommerce). Some markets remain stuck in this stage for many years until providers address all of the service issues that impede customer adoption and agent activity.

Expansion stage (DES between 50 percent and 74 percent)

With the digital rails in place and digital payment systems becoming widely available and actively used, the innovation ecosystem has started to develop, with various new partnerships and services in a range of domains (e.g. finance, agriculture, energy, health, education, ecommerce). Citizens have started to gain access and use a series of new services on the market beyond digital payment services. Numerous players (providers, fintech, start-ups, entrepreneurs, incubators, etc.) are developing in the market.

Moving beyond this stage requires strong prioritization and support for innovation from government and private sector actors, using the right incentives to foster growth of start-ups, helping them to source the right expertise for their teams, and providing them with access to financing along all stages of development.

Consolidation stage (DES of 75 percent or higher)

Citizens benefits from a large offering of digital services in various domains that are accessible and easy to use. They enjoy a choice of providers. In this stage, providers have moved beyond a focus on access and usage; now they are competing to keep their clients and focusing their attention on how to add value and increase the impact of their services for their clients.

During this stage, citizens have access to, actively use and harvest the benefits of the digital economy in various aspects of their daily lives.

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