Analysis of the Network Readiness Index (NRI) Using Multivariate Statistics

Abstract

The Network Readiness Index (NRI) is one of the indicators that shows the level of digital development of countries. The NRI for 2021 shows the development of 130 countries, in contrast to the 45 countries covered by the International Digital Economy and Society Index (I-DESI) of the European Union, which measures only the most developed countries. This paper aims to determine the relationship between 12 sub-pillars of NRI. We use Principal Component Analysis (PCA) to perform a mapping of our data to a lower-dimensional space, and further analyse the causal relationships between the principal sub-pillars using partial correlation coefficients, concluding that two of the twelve main sub-pillars can be explained by ten independent sub-pillars. Thereafter, we use cluster analysis to group our objects (i.e. the 130 countries) into clusters.