Ministry of Innovation / Business of Technology

World Economic Forum releases annual IT rankings; US plummets from the top

According to the World Economic Forum, the US is no longer the top country …

Europe has pulled into the lead when it comes to the effective use of information and communication technology (ICT), according to a new report from the World Economic Forum. Denmark and Sweden top the list, while the US has slid all the way to seventh place after holding the top spot in 2005-06.

The WEF's Global Information Technology Report (GITR) has been published annually since 2002 and uses a Networked Readiness Index (NRI) to measure the degree to which countries are able to take competitive advantage of their ICT resources. The NRI attempts to quantify each country's ICT capabilities across three dimensions: the readiness of governments, businesses, and individuals to effectively utilize ICT; the general ICT regulatory, business, and infrastructure environment; and usage of available technology by the above stakeholders.

Denmark has been steadily climbing towards the number one spot in the GITR, and the report credits government policy there—and in other top-ranked countries—along with a good system of higher education that produces technology-savvy graduates.

"Nordic countries have shown how an early focus on education, innovation and promotion of ICT penetration and diffusion is a winning strategy for increased networked readiness and competitiveness," said WEF Senior Economist and report coeditor Irene Mia. "Denmark, in particular, has benefited from very effective government e-leadership, reflected in early liberalization of the telecommunications sector, a first-rate regulatory framework and large availability of e-government services."

Higher education is keeping the US in the game; public policy that hinders technological innovation and overbroad regulation are responsible for the drop in rankings. "Much of the slip can be attributed to a relatively complex political and regulatory business environment," according to Soumitra Dutta, Dean of External Relations at INSEAD and another report coeditor.

Dutta also believes that the US is falling behind the curve when it comes to adopting emerging technologies. He points out that the US is only ranked 48th when it comes to mobile subscribers. "If you look at the usage of technology in US business," opines Dutta, "it is not what would one would expect."

Top 10 countries by Networked Readiness Index
Source: World Economic Forum (full list available as a PDF)

Country 2006-07 rank 2005-06 rank
Denmark 1 3
Sweden 2 8
Singapore 3 2
Finland 4 5
Switzerland 5 9
Netherlands 6 12
United States 7 1
Iceland 8 4
United Kingdom 9 10
Norway 10 13

The biggest movers were the Netherlands, Sweden, and Mexico (at 49). Estonia leads Eastern Europe at position number 20, up from 23 in the last report. In Latin America, the top countries were Chile (31, down from 29), Mexico (49, up from 55), and Brazil (53, down one position). The most populous Asian countries saw significant drops. China plummeted eight positions to 59 while India slid four places to 44. According to the WEF's report, China's slide is due primarily to lack of innovation and the inefficient integration of ICT into value chains.

Looking at the bigger picture, it appears that the rest of the world is catching up to the US when it comes to the efficient use and deployment of technology. Countries that are able to combine effective public policy with infrastructure improvements and technical know-how will continue to prosper according to the World Economic Forum's technology ratings.

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