For countries seeking to develop globally competitive information technology sectors, the secret to success isn’t much of a secret: You need a healthy business environment, first-rate IT infrastructure, dynamic human capital, robust research and development, a strong legal environment, and adequate public support for industry development.
The United States, even while grappling with a multi-year economic downturn, continues to set the global standard as the most competitive country in IT because of its strength in these foundation areas for technology innovation.
That somewhat counterintuitive finding is among the topline conclusions of the 2011 IT Industry Competitiveness Index, developed by the Economist Intelligence Unit and released today by the Business Software Alliance.
The reason for America’s continued leadership in the IT sector, according to one of the experts interviewed in this year’s study, is that “advantage begets advantage.” Along with other frontrunners in the global field — including Western European stalwarts such as the United Kingdom and its Scandinavian neighbors, and Asian powers such as Singapore, Taiwan, and Japan — America is reaping the benefits of years of investment in IT fundamentals.
But the field of competition is becoming more crowded as new players rise steadily to meet the standards that the leaders have set. India, for example, has leapt 10 spots in this year’s overall rankings by posting strong scores on indicators of human capital and research and development. Others, such as Singapore, Mexico and Poland, have climbed in the rankings by showing new levels of strength across the board, proving that investment begets advantage, too.
Meanwhile, countries that are treading water or drifting off course offer cautionary tales about the consequences of cutting corners or neglecting the fundamentals of IT competitiveness. China, for example, has seen its progress slow considerably compared to previous years, partly because of its poor enforcement of intellectual property rights. Canada has slipped for relaxing its standards in the same area. And the report points warily to “labor rigidity” in some European countries. These examples suggest that to neglect the fundamentals is to languish or be left behind in a sector that is unquestionably critical for long-term economic growth.
BSA has sponsored the IT Industry Competitiveness Index four times since 2007. With this year’s edition, we are proud to offer a deeper and richer presentation of the data on an interactive microsite, which you will find at www.bsa.org/globalindex. Along with the briefing paper pictured above, it also features dynamic ranking tables, detailed country summaries, industry case studies, and video interviews with IT experts. I encourage you to visit the site and explore the findings.