World Economic Forum - press release
SINGAPORE OVERTAKES THE UNITED STATES IN THE WORLD ECONOMIC FORUM'S GLOBAL INFORMATION TECHNOLOGY REPORT
Ranking Places Singapore as the World's Most Successful Economy in Exploiting ICT Developments - US Falls to Fifth Place
Geneva, Switzerland, Wednesday 9 March - The United States has dropped four places and ceded top billing in the World Economic Forum's Global Information Technology Report to Singapore. Released today, the Report ranks Singapore as the top economy in exploiting global ICT (information and communications technology) developments for the first time. The report places Singapore as the best performer worldwide in a number of categories - quality of maths and science education, affordability of telephone connection charges, and government prioritization and procurement of ICT - and gets extremely high scores in other areas, such as affordability of Internet access.
By contrast, the United States drops to number 5 in the ranking. However, the loss in rank is less due to actual erosion in performance with respect to its past history and more to continuing improvements by its competitors. The United States maintains global leadership in the business readiness component of the rankings as well as in variables such as the quality of its scientific research institutions and business schools - which have no peer in the world - and the availability of training opportunities for the labour force as well as the existence of a well-developed venture capital market, which has spurred innovation.
With a total coverage of 104 economies worldwide and published for the fourth consecutive year, The Global Information Technology Report has emerged as the world's leading assessment of the impact of information and communication technology (ICT) on the development and competitiveness of nations. Under the theme "Efficiency in an Increasingly Connected World", The Global Information Technology Report 2004-2005 is released at a time of cautious optimism about the short-term global economic outlook and the emergence of a broad consensus about the central role that ICT plays in boosting growth prospects of developed and developing countries. In line with the World Economic Forum's efforts to expand the geographical coverage of the Report, five new countries from diverse regions of the world (Bahrain, Bosnia and Herzegovina, Cyprus, Georgia and United Arab Emirates) have been included this year.
"It is clear that information and communication technologies will continue to play a growing role in boosting the efficiency of the increasingly integrated global economy, enabling countries to improve resource allocation and boost growth prospects. Singapore is an excellent example of a country that has been able to make in a relatively short period of time enormous progress in putting ICT at the service of improved living standards. Together with a handful of other economies (Taiwan, Israel, United Arab Emirates, Korea, Estonia, among others), Singapore's experience highlights the increasingly central role played by technology as an engine of growth and competitiveness, even beyond the borders of the rich industrial countries," said Report co-editor Augusto Lopez-Claros, Director of the Global Competitiveness Programme at the World Economic Forum.
The Global Information Technology Report 2004-2005 consists of three main parts: the first part presents several analytical studies related to aspects of ICT development, including a case study on Taiwan's impressive emergence over the last 20 years as one of the world's leading manufacturers of ICT products; the second part contains detailed country profiles providing a snapshot of each country's level of ICT development; and the third consists of data tables with country rankings for each variable comprised by the Index. The overall main index of the Report, the Networked Readiness Index (NRI), measures the propensity for countries to exploit the opportunities offered by ICT and establishes a broad international framework mapping out the enabling factors of such capacity.
"There is a strong correlation between ICT spending and productivity, which is demonstrated in this research as a strong correlation between the rankings and global competitiveness," said John Chambers, President and CEO of Cisco Systems, which sponsored the Report. "While ICT usage is a measure of the present, ICT readiness is perhaps a measure of the future. Proactive policies and investments by all levels of government such as encouraging broadband network infrastructures, the education and literacy of citizens and ongoing skills training are all components of the readiness measurement and play an important role in building the foundations of a country's productivity," he added.
Highlights of the Results of the Networked Readiness Index Rankings 2004-2005
* Singapore tops the rankings of the Networked Readiness Index 2004-2005 for the first time. This is primarily due to its superior performance in terms of the ability of individuals and government to tap into the potential of ICT, as well as actual government usage of ICT. Singapore's remarkable performance is a consequence of the government's consistent and continuous efforts in fostering ICT penetration and usage, as well as the quality of the country's educational system and its able use of foreign technology.
* The United States drops to number 5, following a three-year reign at the top. However, the loss in rank is less due to actual erosion in performance with respect to its past history and more the result of other countries scaling up positions. The United States maintains global leadership in the business readiness component of the Networked Readiness Index as well as in variables such as the quality of its scientific research institutions and business schools - which have no peer in the world - and the availability of training opportunities for the labour force as well as the existence of a well-developed venture capital market, which has spurred innovation.
* Nordic countries continue to build up an impressive track record in the ICT area, with Iceland, Finland, Denmark and Sweden in the second, third, fourth and sixth places respectively (and Norway a respectable 13th). Iceland, in particular, achieved the greatest improvement among the top performers, climbing from number 10 the previous year to 2 overall in 2004. Nordic countries have registered consistently high ICT penetration rates and the top ten positions over the last four years. Governments, the business communities and households are enthusiastic users of new technologies and the countries have a distinguished record in technological innovation. Sweden, Finland and Denmark, in particular, consistently outrank some of the larger European economies in terms of the number of US patents registered per million population, a frequently used indicator of a nation's innovation record. They also enjoy an enviable regulatory and institutional environment that has nurtured the growth of the ICT sector.
* Asia and the Pacific do extremely well this year with Singapore at number 1, Hong Kong and Japan entering for the first time in the top ten, at 7 and 8 respectively, and Australia, Taiwan, New Zealand, Korea and Malaysia quite well positioned at 11, 15, 21, 24 and 27 respectively. India and China significantly improve their positions climbing to number 39 and 41, compared to 45 and 51 in 2003, respectively. Japan's top ten performance is noteworthy, given the country's impressive track record in the area of technological innovation, second only to the United States in terms of US patents registered. Estonia leads the central and eastern European countries with a rank of 25 out of 104, thanks to its excellent regulatory framework for ICT. The formerly centrally planned economies in this region tend to rank higher than some of the larger countries in Latin America, with Estonia, Slovenia, Hungary, the Czech Republic and Lithuania, scoring higher than Brazil, Mexico and Argentina, the three largest Latin American economies. Impressive levels of foreign direct investment to central and eastern Europe during the past decade, reflecting comprehensive reforms adopted ahead of EU accession, have played a central role in this process.
* The highest ranking Latin American country is Chile (35), well ahead of Brazil (46), Mexico (60) and Argentina (76). With the exception of Chile, the region as a whole suffers from a poor legal framework for the development of the ICT sector, heavy administrative burdens, low levels of government prioritization for ICT development, low Internet penetration rates and pervasive brain drain, which undermines the potential for faster growth of the economies' ICT sectors. Most countries have thus seen an erosion in their relative ranks within the 104 economies covered.
* South Africa and Tunisia strengthen their dominant positions among the 23 African countries covered by the Index, positioning themselves in 34th and 31st place overall, up from 37th and 40th position last year respectively. Mauritius ranks 47 and Botswana ranks 50. Botswana has improved its position by 5 places. Among the other markets, Israel's performance remains noteworthy, posting a rank of 18 overall showing excellent scores in variables such as levels of technological sophistication, the quality of scientific research institutions, the availability of venture capital and mobile phone penetration. Israel and Taiwan have scientific establishments that have built up impressive track records for technological innovation. Both Israel and Taiwan have an annual number of US patents registered per million population that is second only to the United States and Japan. Also worth mentioning are the cases of the United Arab Emirates (UAE) and Bahrain, both included in the Index for the first time and entering the rankings at 23 and 33 respectively. Notably, the UAE's first-rate performance seems to be led by a successful government strategy in promoting ICT penetration and usage.
A comparison of the Networked Readiness Index scores over the last four years confirms last year's trend of a narrowing digital divide between the most developed and least developed economies.
Soumitra Dutta, Professor of Business and Technology and Dean of Executive Education at INSEAD, co-editor of the Report, explained: "The Networked Readiness Index (NRI) has evolved into an accepted global benchmark of an economy's preparation to participate in and benefit from information and communication technology developments. Beyond the mere provision of an annual international cross-section of networked readiness, the publication of the Report may also be seen as a vehicle whereby governments, businesses and individuals can assess progress on a regular basis."