U.S. Leads 64-Nation Ranking of IT Competitiveness
The U.S. leads the world in information technology (IT) competitiveness but like other top players must guard against losing its edge, the Economist Intelligence Unit (EIU) said Wednesday. The EIU is part of the Economist magazine. Its white paper, The Means to Compete: Benchmarking IT Industry Competitiveness, gauged the IT industry environment in 64 nations, ranking countries according to sector performance. The findings are meant as a “road map” for governments, said Business Software Alliance (BSA) President Robert Holleyman, whose organization sponsored the study.
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The report eyed six attributes of IT competitiveness: (1) A stable, open business environment that encourages competition. (2) The presence of an advanced IT and communications infrastructure. (3) Availability of future- minded IT talent and skills. (4) Strong intellectual property rights protection. (5) Robust support for innovation. (6) “Carefully calibrated” government support. The U.S. was first overall, followed by Japan, South Korea, the U.K. and Australia.
The U.S. is unique in having an IT environment that melds scale and quality in areas that spur competitiveness such as education, infrastructure and encouragement of innovation, EIU said. Western European countries also rate highly, as do Japan, South Korea, Australia and Taiwan. However, “none of the leaders are without weaknesses,” the report said. Western Europe’s labor market is restrictive, the report said. U.K. companies do not generate the number of patents that the U.S. and some Asian countries do, and European research and development investment lags. U.S. take-up of high speed broadband, mobile phone and data services has fallen behind that of other developed countries, EIU said.
The study highlighted the fact that an IT boom in China and India cannot be guaranteed to run indefinitely just because they have huge workforces, low wages or other attributes, Holleyman said in an interview. Their industry environments contain “glaring weaknesses” which both nations must repair as their cost advantages erode, the study said.
Competitive and non-competitive countries stand apart from one another based on their legal regimes, the EIU said. Competition requires IP rights enforcement, an area where the U.S. and Western Europe excel, it said. Online protections count, too; of the 20 highest scoring nations, 13 are in Western Europe, where the European Union has standardized electronic signature and data privacy rules, the EIU said. Europe, Asia and the U.S. coordinate efforts to fight spam and cybercrime. By contrast, some countries, among them China, are weak on IP rights enforcement and lack data protection and anti-spam laws, the report said.
Some countries already have significant advantages and could catch up to the leaders if they fill in the blanks, Holleyman said. Challenges to China and India are likely to come from Russia, Brazil, Malaysia and Vietnam, as well as from smaller markets like Chile, Estonia and Lithuania, the EIU said. However, it said, they will have to develop niche markets in software development or services, rather than trying to compete directly with more established players.
Talented IT workers are in short supply everywhere, a situation that will worsen as the skills needed change, the report said. Future workers will need more than technical knowledge; they will have to know project and business management as well, it said. So far, only a few countries, including the U.S., Singapore and Australia, have tried to adjust their training accordingly, it said.