Australia has slipped down global digital readiness rankings since the pandemic, with the divide between states and territories growing more significant, a new report has found.

The Cisco Digital Readiness Index 2022 placed Australia at 16th out of the 146 countries analysed, down from its 12th ranking the last time the study was conducted in 2019.

Australia’s poor showing can be largely attributed to its large digital divide between some states and territories, with digital readiness varying across the nation.

“Australia continues to be amongst the highest-ranked digitally ready nations but cannot afford to stand still,” Cisco Australia and New Zealand vice-president Ben Dawson said.

“Maintaining existing investment levels puts us at risk of falling behind other countries and increasing the national digital divide.

“As digitisation continues to accelerate, the report highlights the continued need for Australia to focus and invest across all the digital readiness components to capture the opportunities of a resilient, sustainable and equitable society.

“While it is always difficult to predict the future, one forecast that can be made with certainty is that the digital skills and infrastructure required by Australia today will be insufficient for the challenges and opportunities that lie ahead.”

The Digital Readiness Index is a global study conducted by Cisco measuring the “combination of digital capability and infrastructure”.

The study looks at seven components: basic needs, human capital, business and government investment, ease of doing business, startup environment, technology adoption and technology infrastructure.

“Digital readiness helps us to understand how different nations, states and territories are performing and measure their progress towards creating a more prosperous and digitally inclusive society,” Dawson said.

“We can also understand the improvements that are needed to maintain or boost performance.”

It also looks at individual states and territories in terms of similar criteria. It’s the third time such a study has been conducted and the first since the onset of the COVID pandemic, following iterations in 2017 and 2019.

The ACT again came out first in terms of digital readiness for Australian jurisdictions, coming out on top in terms of business and government investment and human capital.

New South Wales placed in second while Victoria was in third, ranking strongly in terms of technology adoption.

South Australia was the most improved Australian jurisdiction, while Western Australia dropped down one spot from the previous analysis. Tasmania slid down to second last out of all the Australian jurisdictions, due to a decline in the ease of doing business.

The Northern Territory was ranked the lowest out of all the Australian jurisdictions, illustrating the digital divide that still exists in the country.

Australia now ranks far below its cross-Tasman rival in terms of digital readiness, with New Zealand placing 8th in the 2022 iteration.

Australia’s decline has been attributed to a drop in student and skilled migration due to the pandemic.

“This highlights the interconnected nature of digital readiness, and the dangers of disengaging from the global community, even for short periods,” Dawson said in the report.

“However, it would be wrong to attribute Australia’s drop in ranking to the pandemic alone, given all nations were impacted by the same event.”

Australia needs to urgently focus on its digital readiness and bridging its digital divide, Dawson said.

“The more important question now is whether Australia can regain and uplift its ranking and that will depend on how it invests in digital readiness to build national prosperity,” he said.

“Australia cannot afford to stand still, as even maintaining existing investment levels risks seeing us fall behind countries that see the benefits of increasing their investment levels.”

The rankings illustrate that a country simply maintaining its investment in digital readiness can see it fall behind the pace on the global stage, Dawson said.

The 2019 version of the report, released in 2020, saw New South Wales place higher than Victoria in second place, with the ACT still on top.

Here is the full list of top 10 countries:

1. Singapore

2. Luxembourg

3. Iceland

4. United States of America

5. Sweden

6. Denmark

7. South Korea

8. New Zealand

9. Switzerland

10. United Kingdom