Key findings
* Denmark takes first place; Scandinavia claims four of top five spots
* Singapore makes leap to 7th place, leads in Asia-Pacific region
* Early Internet adopters, including the US and Australia, trail in broadband uptake
* EU accession countries poised to make quick advances
* Developing countries leverage e-assets to competitive advantage
Global prospects for the information and communications technology (ICT) industry look sprightlier than they have for a while. Enterprises are taking advantage of Internet protocol-based services, mobile-phone usage is mushrooming in developing and developed economies alike, and broadband is taking off. But despite the proliferation of cheaper, more reliable technologies, the global e-business environment remains uneven, according to the 2004 edition of the Economist Intelligence Unit e-readiness rankings,conducted in co-operation with IBM’s Institute for Business Value. (See table below or visit eb.eiu.com/err2004 to download a free report of the rankings.) Countries that are able to coordinate development programmes across different agencies and learn from global best practices will make swifter advances, the report concludes.
Since 2000, the Economist Intelligence Unit has published an annual e-readiness ranking of the world’s 60 largest economies. A country’s “e-readiness” is a measure of its e-business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. We have made two additions to this year’s ranking: broadband penetration as a scored criterion; and in recognition of the European Union’s eastward expansion, Estonia, Latvia, Lithuania and Slovenia have been added to the four accession countries already in the annual ranking (Czech Republic, Hungary, Poland and Slovakia).
The Economist Intelligence Unit developed the criteria for the e-readiness rankings with IBM Institute for Business Value. “Economic development is largely predicated on the effective and innovative use of technology,” said Peter Korsten, director, IBM Institute for Business Value. “The e-readiness rankings provide valuable insight into how governments can influence the rate and nature of adoption of technology and applications. Equally, they provide business leaders with information that can help guide decisions on where to invest to grow their companies.”
Among the main conclusions suggested by this year’s rankings:
Scandinavia dominates. Scandinavia—Denmark (in 1st place), Sweden (3rd), Norway (4th) and Finland (5th)—has emerged as the region to beat in our annual rankings, overtaking earlier adopters including the US, Australia and Canada. The UK came second. (In the 2001 rankings, the top four countries were, in order, the US, Australia, the UK and Canada.) What sets Scandinavia apart is the extent to which the Internet has reshaped business transactions, the eagerness with which citizens have incorporated Internet technology into their daily routines, and the extent to which Scandinavian governments have driven development.
Asian contenders step forward. Singapore (7th) has made the greatest advance in this year’s ranking, up five places over last year. Like its neighbours, Hong Kong (9th) and South Korea (14th), Singapore is a world leader in broadband rollout and benefits from strong government-industry cooperation.
Broadband has an impact. To reflect its role as an e-business driver, we have modified our scoring methodology to include broadband penetration, replacing an indicator on fixed-line rental rates. For most countries—particularly the top-ranked ones—the change has had a dampening effect on overall scores, because broadband adoption is still very low. With the exception of Spain (21st) and Israel (22nd), which have excelled on other criteria such as IT investment, the scores for all top 25 countries have slipped, largely due to this change in methodology. In a digital world, new technology will constantly move the goalposts.
Coordination and competition pay off. Governments that coordinate with industry associations, with the ICT service and manufacturing sectors, with local governments, and with other national governments, show that learning from each other and progressing toward common goals is the fastest and cheapest way to e-readiness. The European Union is showing what coordination can accomplish. And for the ever-competitive Asian tigers, observing and emulating best practices in neighbouring countries is standard practice.
EU entrants stand to gain. This year’s EU accession countries—Estonia (26th), the Czech Republic (27th), Hungary (30th), Slovenia (31st), Latvia (34th), Poland (36th), Lithuania (38th) and Slovakia (39th) (as well as Cyrus and Malta, not included in our ranking)—already have decent infrastructure and e-business environments. In Estonia, the majority of Internet users are broadband subscribers, and all public schools have broadband access. These countries will immediately benefit from the EU’s coordinated approach to development.
Developing countries leverage e-assets. Countries that have all Internet enablers working in tandem (complete technology infrastructure, and favourable policy, business and social environments) are the most e-ready. But even where some of these pieces are missing, proactive governments and smart businesses can use the Internet to improve services and create new opportunities. Examples include e-government advances in Mexico (39th) and Romania (50th), and the creation of software and outsourcing niches in India (46th), South Africa (32nd) and Bulgaria (42nd).
Economist Intelligence Unit e-readiness rankings, 2004
2004
e-readiness ranking (of 64) 2003 ranking Country 2004
e-readiness
score (of 10)a 2003 score
1 2 Denmark 8.28 8.45
2 3 (tie) UK 8.27 8.43
3 1 Sweden 8.25 8.67
4 7 Norway 8.11 8.28
5 6 Finland 8.08 8.38
6 3 (tie) US 8.04 8.43
7 12 Singapore 8.02 8.18
8 3 (tie) Netherlands 8.00 8.43
9 10 (tie) Hong Kong 7.97 8.20
10 8 Switzerland 7.96 8.26
11 10 (tie) Canada 7.92 8.20
12 9 Australia 7.88 8.25
13 13 Germany 7.83 8.15
14 16 South Korea 7.73 7.80
15 14 Austria 7.68 8.09
16 15 Ireland 7.45 7.81
17 17 (tie) Belgium 7.41 7.78
18 19 France 7.34 7.76
19 17 (tie) New Zealand 7.33 7.78
20 20 Taiwan 7.32 7.41
21 23 Spain 7.20 7.12
22 25 Israel 7.06 6.96
23 21 Italy 7.05 7.37
24 22 Portugal 7.01 7.18
25 24 Japan 6.86 7.07
26 n/a Estoniab 6.54 n/a
27 (tie) 26 Greece 6.47 6.83
27 (tie) 27 Czech Republic 6.47 6.52
29 28 Chile 6.35 6.33
30 29 Hungary 6.22 6.23
31 n/a Sloveniab 6.06 n/a
32 31 (tie) South Africa 5.79 5.56
33 33 Malaysia 5.61 5.55
34 n/a Latviab 5.60 n/a
35 36 Brazil 5.56 5.25
36 30 Poland 5.41 5.57
37 35 Argentina 5.38 5.41
38 n/a Lithuaniab 5.35 n/a
39 (tie) 34 Slovakia 5.33 5.47
39 (tie) 31 (tie) Mexico 5.33 5.56
41 37 Colombia 4.76 4.86
42 40 Bulgaria 4.71 4.55
43 42 Thailand 4.69 4.22
44 38 Venezuela 4.53 4.75
45 39 Turkey 4.51 4.63
46 46 India 4.45 3.95
47 41 Peru 4.44 4.47
48 45 Saudi Arabia 4.38 4.10
49 47 Philippines 4.35 3.93
50 43 Romania 4.23 4.15
51 51 Egypt 4.08 3.72
52 (tie) 50 China 3.96 3.75
52 (tie) 44 Sri Lanka 3.96 4.13
54 54 Ukraine 3.79 3.28
55 48 Russia 3.74 3.88
56 49 Ecuador 3.70 3.79
57 52 Iran 3.68 3.40
58 55 Nigeria 3.44 3.19
59 53 Indonesia 3.39 3.31
60 56 Vietnam 3.35 2.91
61 58 Algeria 2.63 2.56
62 57 Pakistan 2.61 2.74
63 59 Kazakhstan 2.60 2.52
64 60 Azerbaijan 2.43 2.37
a The tendency of 2004 scores to be lower than 2003 scores is mainly due to a change in our methodology to include broadband penetration, which is still very low in most countries.
b Estonia, Latvia, Lithuania and Slovenia are new to the annual rankings and were not ranked in 2003. The year-on-year drop in rank for countries below these is due largely to the addition of four new competitors.
Source: Economist Intelligence Unit
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