Beyond the equal-weight framework of the Networked Readiness Index: a multilevel I-distance methodology

Abstract

Global competitiveness in the 21st century is essentially based on improving business by employing information and communication technologies (ICT). Therefore, it is necessary to establish comparable and reliable ICT statistics for measuring the development of information society. One of the possible solutions is the Networked Readiness Index (NRI). The NRI is the degree of ICT implementation in a country’s economy with the aim of increasing its competitive advantage. In particular, the NRI provides a thorough overview of the top-ranked countries with a highly developed ICT infrastructure. The statistical foundation of the NRI composite index is based on a policy that assigns the same weight to all indicators. Starting from here, our aim was to contribute to the official methodology by providing an alternative weighting scheme. Consequently, our paper presents an alternative NRI framework based on the application of multilevel I-distance methodology. Our approach helps to overcome the issue of employing biased weighting factors in the process of creation composite indexes. We also provide an overview of potential corrections of the official NRI weighting procedure, aimed at sparking debate among researchers and policymakers.