Digital readiness regimes and development dynamics: The role of governance and skills beyond connectivity

The global diffusion of digital technologies has transformed the nature of the digital divide. While earlier research focused primarily on disparities in access to information and communication technologies, contemporary digital economies increasingly depend on broader institutional and capability-based factors. Existing studies, however, often analyze these determinants in isolation, offering limited insight into how they interact to shape national trajectories. This article introduces the concept of digital readiness regimes, defined as configurations of ICT infrastructure, human capital, innovation capacity, and governance quality. Using a country–year panel covering 164 economies over the period 2010–2023, we identify these regimes through clustering techniques and analyze their persistence and correlates using Markov transition models and multinomial logit specifications. The results indicate strong persistence and limited reconfiguration across regimes. Skills, regulatory quality, and connectivity are associated with differentiation from the lowest-readiness configurations, while membership in the technology-specialized group is primarily linked to innovation capacity and high-technology export specialization. The analysis identifies three mechanisms shaping these patterns: absorptive capacity for adopting new technologies, regulatory capacity affecting market contestability, and institutional coordination supporting innovation and learning. The findings contribute to a more integrated understanding of digital transformation and the digital divide by showing how infrastructure, capabilities, and governance interact in shaping countries’ positions in the global digital economy.