Singapore is the world's top economy in exploiting global IT developments, according to the world Economic Forum’s Global Information Technology Report 2004-2005. The US ceded its top spot and dropped to fifth place, while the Nordic countries continued their impressive track record. Asia performed extremely well this year, as did Estonia, South Africa and Israel in their respective regions.
In the interview below, the Forum’s Chief Economist and Director of the Global Competitiveness Programme, Augusto Lopez-Claros, explains the results of this year’s Report.
Singapore is the star performer in this year’s GITR. What were the decisive factors that pushed it up to first from last year’s eighth place?
Singapore overtakes the United States, topping the rankings of the Networked Readiness Index for the first time. The main factors that explain such an exceptional performance are to be found in Singapore’s excellent ICT infrastructure and regulatory environment. A third factor is the readiness and willingness on the part of the three main stakeholders (i.e. governments, business communities and households) to adopt new technologies and to fully benefit from ICT.
In particular, Singapore is the best performer worldwide in terms of the quality of mathematics and science education, affordability of telephone connection charges, and government prioritization and procurement of ICT. Singapore also scores extremely highly in other areas, such as the affordability of internet access.
As for ICT usage, the country leads the world in terms of the prevalence of foreign technology licensing, government success in ICT promotion, and the availability of government online services.
Why did the US drop to fifth place from the top spot which it held for three years?
This is more a result of other countries’ improvement of their relative position, rather than the result of an actual erosion of the US’s ICT performance. But the US did record a relatively poorer performance this year in all three components of the Networked Readiness Index. On the positive side, it consolidated its global leadership in the business readiness component as well as in variables such as the quality of scientific research institutions and business schools, availability of training opportunities for the labour force, buyer sophistication and venture capital availability.
What do you attribute the Nordic countries’ continued excellent performance this year to?
The Nordic countries again top the rankings this year, with Iceland, Finland, Denmark and Sweden in the second, third, fourth and sixth place respectively. Iceland, in particular, recorded an impressive ICT performance, climbing from 10th position in 2003 to second out of 104 economies in 2004, which represents the greatest improvement among the top performers.
Such a development does not come as a surprise as Nordic countries have consistently shown very high ICT penetration and usage rates and come out among the top performers over the last four years.
Besides having an excellent macroeconomic, regulatory and infrastructure environment, those countries share a commitment by their governments, business communities and households to ICT use. In addition, they are constantly innovating.
As a result, Sweden, Finland and Denmark outrank some of the larger European economies in the number of US patents registered per million population, a frequently used indicator of a nation’s innovation record.
Asian and Pacific economies on the whole also scored well. How can this region’s growing success be explained?
Indeed, Singapore is not the only success story in Asia. A look at this year’s rankings shows that other Asian countries are doing very well on ICT developments:
Hong Kong (7) and Japan (8) have entered the top ten for the first time and Australia, Taiwan, New Zealand, Korea and Malaysia are quite well positioned, at 11, 15, 21, 24 and 27 respectively. India and China have significantly improved their positions to 39th and 41th respectively (from 45th and 51st in 2003).
Taking into account Asia’s growing importance as a major ICT player, this year’s Report includes a country study on Taiwan. Taiwan has achieved an impressive ICT performance over the last 20 years, diversifying its productive structure away from agriculture to technology-intensive industries and emerging as one of the world’s leading manufacturers of ICT products and a source of inspiration to other countries even outside Asia.
What does the Booz Allen Hamilton chapter investigating the future of outsourcing include?
Outsourcing is a defining trend of today’s patterns of production having extended from peripheral business activities to core ones, such as the ICT sector.
Booz Allen Hamilton uses its experience with a wide industry range to identify the best outsourcing practices. Their contribution to this year’s Report, in a chapter entitled "Next Generation IT Outsourcing: Profits or Perils" is therefore a very useful tool for business leaders across the world faced with outsourcing decisions.
The GITR also looks at the issue of Internet in the provision of government services and its importance for European competitiveness. What is the role of ICT in achieving the Lisbon Strategy goals?
As a part of its efforts to make Europe the world’s most competitive knowledge-based economy by 2010, the Lisbon Agenda put a special emphasis on fostering ICT penetration and use at the government, business and household level.
Although the mid-term assessment has revealed that the Lisbon goals are unlikely to be implemented in time, significant progress has been made at strengthening the role of ICT in European societies, as Cisco’s contribution to this year Report points out. "Net Impact: European e-Government" is a chapter that builds on the findings of a Cisco-sponsored research project - the Net Impact series - aimed at understanding the investments and best practices in ICT that foster productivity improvements in public organizations.
Cisco’s contribution provides a very useful analysis on how ICT should be used to improve public sector efficiency and the delivery of services to the general public.
The GITR has assessed the networked readiness of economies for 4 years now. What is the primary aim of the Report and how can it be useful to economies?
The important lesson of the GITR lies in the fact that it demonstrates the important role of ICT in boosting the efficiency of an integrated global economy, as well as boosting growth prospects in developed and developing nations.
Achieving such benefits depends on the cooperation of government, business and individuals. For example, it is not just the government’s responsibility to create the market environment and draw up regulations.
The first pillar of the GITR captures aspects of an economy’s environment for ICT development, such as the regulatory regime, legal framework and available infrastructure.
The second pillar looks at actual levels of networked readiness of the three main stakeholders in the economy: individuals, businesses, and governments. The third pillar examines the actual levels of ICT usage by these three groups.
