Economy: Global Information Technology Report 2005-2006

The United States tops the rankings of The Global Information Technology Report 2005-2006’s “Networked Readiness Index” for the third time in five years, maintaining its position as a leader in the area of innovation and confirming its position as an information and communication technology powerhouse. It is followed by Singapore and the Nordic countries, while Portugal climbed from rank 30 to 27, out of 115 countries. For more info in Portuguese check newspaper Publico of March 29, 2006 (paying). Portugal does better than other southern European countries like Spain, Italy and Greece (ranked 31, 42 and 43 respectively).

With record coverage of 115 economies worldwide and published for the fifth consecutive year, the report has become a respected assessment of the impact of information and communication technology (ICT) on the development process and the competitiveness of nations. It is produced by the World Economic Forum in cooperation with France's INSEAD and is sponsored this year by Cisco Systems. All ranking exercises of this type have an element of arbitrariness, depending on how the indexes are compiled. However, the leaders tend to be roughly the same whatever the criteria in the recent years, with the same countries featuring regularly in the top 10. It must however be noted that some results are surprising (as is the case with Argentina – see bellow) and I have difficulty in accepting the report’s total credibility and independence.

The report proposes the Networked Readiness Index (NRI), which measures the propensity for countries to leverage the opportunities offered by ICT for (economic) development and increased competitiveness. The index rates each economy for its broad ICT environment, such as regulation and infrastructure, the readiness of community’s stakeholders (individuals, businesses and governments) to use ICT, such as education quality and spending on research and development, and use of ICT in practice. Augusto Lopez-Claros, director of WEF’s global competitiveness network, said: “The US has been for many years an ICT powerhouse, and its sustained ability to harness these technologies so effectively…provides a standard of measurement for other countries wishing to rapidly improve the living standards of their citizens.”

After the US, the Nordic countries and other usual European countries, some Asian and Pacific countries do extremely well with Taiwan, Hong Kong, Korea, Australia and Japan very well placed (ranks 7, 11, 14, 15 and 16, respectively). India maintains its 40th place while China strangely drops 9 positions to 50th place, widening the performance gap with respect to India. The highest ranking Latin American countries are Chile (29), Brazil (52) and Mexico (55), while Argentina is only 71! . Personnally, having had the chance to visit Argentina and Chile recently, it doesn't seem to me that this difference reflects reality in those countries and makes little sense. Argentina seemed to me very developed in terms of ICTs uptake, and not worse than Chile in any case, as regards use of internet, websites for everything; I had access to mobile phone services everywhere throughout the country and even in remote areas, which was not the case in Chile. The difference between Chile (29) and Argentina (71, behind countries like Mexico, Egypt, Pakistan or Indonesia, to name but a few) doesn't make much sense, in my view. And that doesn't contribute, in my undertsanding, to give credibility to this report and this index. It’s just a reference...

Some extracts:"The global economy is being changed in profound ways by the onward march of science and technology. Technological change has, of course, always been a central engine of economic growth, but what is significant about the past decade is the acceleration in the pace of change and, as more and more countries have made efforts to improve their macroeconomic and policy environments, technology and technological innovation appear to have entered a “golden age”, a time when they are emerging as the key drivers of growth and development. Indeed, the competitiveness of nations has come more and more to depend on the presence of vibrant ICT sectors, on the related technological readiness of the three main national stakeholders: government, businesses, and individuals, and on their ability to adopt emerging new technologies. This is especially true for countries, whose level of development places them near the technological frontier, and whose prospects for continued competitiveness lie fundamentally in their innovation potential and technological skills.
There are, to be sure, still many basic battles to be won in the developing world, addressing fundamental issues of development, from reducing poverty levels and the incidence of disease to enhancing opportunity and the quality of life for large segments of the world’s population.But, as economists are prone to point out, what matters most is what happens “at the margin,” and at the margin technologies today—particularly information and communications technologies (ICT)—are increasingly playing the central catalytic role in pushing the development process forward.
The Global Information technology Report 2005–2006 appears at a time of growing concern about a range of emerging global challenges.The world’s population is projected to exceed 8 billion by 2025, 2 billion more than at the outset of the 21st century.This will have fairly direct implications in a number of key areas, from energy consumption, to job creation, to management of the global environment. How countries are able to adapt to the fast pace of change and cope with the challenges that are implicit in the emergence of an increasingly complex global economy will depend heavily on how adept they will be at formulating intelligent policies, and modernizing the institutional framework which forms the basis of modern societies. It is becoming evident that the more successful countries are those in which governments, businesses, and civil society have evolved mechanisms that facilitate consultation and cooperation, and which lead to giving a high priority to boosting education and training. (…) Future prosperity seems increasingly to be as much a function of investment in human capital and the technologies that will enhance productivity, as it is of investment in physical capital and infrastructure.(…)