Global Economics

Who's on Top in Tech-Readiness?


While Nordic nations still win top marks in surveys, oil-producing countries are waking up to the need to adapt their economies to the digital age

The Middle East isn't known as a hotbed of technological achievement. But in the seventh annual Global Information Technology Report released on Apr. 9 by the Geneva-based World Economic Forum (WEF) and French management school INSEAD, the region demonstrated the most improvement in its tech-readiness and expertise of any in the world.

Soumitra Dutta, a professor of business and technology at INSEAD and co-editor of the report, says oil-producing countries have woken up to the fact that diversifying their economies will prove "absolutely critical" in the coming years. "They have to rely on people and on knowledge-based industries," he says. Other countries in the region, especially Egypt and Jordan, also now understand that technological prowess will prove vital to their global competitiveness.

That's the underlying message of the Global Information Technology Report (http://www.weforum.org/gitr), which assesses 127 economies on scores of factors ranging from the cost of mobile phone calls and available Internet bandwidth to the quality of higher education. Not just a catalog of technical specifications, the report weighs these measures to determine which economies are best positioned to compete in the information-intensive 21st century economy.

Northern Lights

The conclusion, as in previous studies, finds Nordic countries grabbing five of the top 10 slots, with Denmark and Sweden placing No.1 and No.2 for the second year running. Credit widespread Internet usage, supportive government policies, and good education. The U.S. came in at No.4, up three positions from last year (BusinessWeek.com, 3/28/07). Although the U.S. gets top marks in innovation and education, it's pulled down by "red tape and rigidities" that stifle its business environment, according to the report.

By coincidence, on the same day the WEF report came out, a rival ranking from the Economist Intelligence Unit (EIU) assessing the "e-readiness" of countries around the world also was released. The EIU study (www.eiu.com/sponsor/ibm/e-readinessrankings2008) used a similar method but also weighed how well economies have sustained their momentum from previous years. It too noted the continued dominance of Nordic and other Northern European countries among the world's most technically advanced, but ranked the U.S. No.1 in light of improved access to fixed and wireless broadband and its more innovation-conducive environment. The U.S. also ranked No.1 in last year's (BusinessWeek.com, 5/11/07) World Competitiveness Yearbook prepared by IMD, a Lausanne (Switzerland) business school

Contrary to the results from the WEF, the EIU report also found that some Scandinavian countries are losing their edge because of the strain of maintaining high levels of investment in tech infrastructure. The surprise up-and-comers on the EIU list include Austria (ranked No. 10) and Australia (No. 4). Hong Kong—ranked 11th by the WEF—placed second in the EIU study.

Eastern Promise

Singapore, the only Asian nation ranked in the WEF's top 10 last year, was joined this year by South Korea, which advanced an impressive 10 spots to No. 9. "It's such an inspiration," says Irene Mia, senior economist for the Global Competitiveness Network at the WEF and co-editor of the report. Government investments in technology infrastructure and education starting 30 years ago helped South Korea develop from a relatively poor country into an Internet powerhouse, home to Samsung (SSNGY), LG Electronics (LGEJY), and the world's first social-networking site, Cyworld.

While no Middle Eastern country was ranked by the WEF among the top 10 economies at the forefront of technological infrastructure, they did rise significantly in the rankings this year. Egypt, No. 63 in the study, climbed 17 places—the biggest jump in the sample—due in part to efforts to become a locale for outsourcing and offshore operations. Jordan rose 11 places to No. 47, reaping the rewards of its Jordan Education Initiative launched in 2003. Saudi Arabia and Oman, new to the study, entered the rankings fairly high up, at 48th and 53rd respectively.

Despite plenty of praise for achievers, the WEF report also raises a concern that the need for e-skills worldwide will outgrow the supply, especially in fast-emerging economies like China and India. A new study by INSEAD professor Bruno Lanvin included in the WEF report, called ":Building E-Skills for the Information Age,": finds that educational systems—particularly in North America and Western Europe—are failing to spark interest in the study of information technology. Lanvin says too many young people see tech mainly as a hobby, whether via online games or social networking sites such as Facebook and MySpace (NWS).

The image of IT jobs, too, is in need of a makeover if countries want to fill their ever-growing need for e-expertise, Lanvin says. A champion for the cause, such as environmentalists have in Al Gore, might turn things around. "Maybe our civilization cannot handle two big battles at the same time," he says, referring to the fight against global warming. "We need an Al Gore of e-skills. We need a Bono of e-skills."

For a look at the WEF's 2008 ranking of the 10 most technologically advanced economies, click here.

Fishbein is a reporter in BusinessWeek's Paris bureau .

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