SOURCE: IBM

April 26, 2007 12:47 ET

Asian Countries Advance in the Economist Intelligence Unit's 2007 E-Readiness Rankings, as the Goalposts of Digital Leadership Shift

LONDON -- (MARKET WIRE) -- April 26, 2007 --IBM (NYSE: IBM)

Key findings

--  Strong government role in promotion and adoption of ICT propel Asian
    countries upward
--  Denmark, the US and Sweden remain on top; Hong Kong and Singapore move
    up
--  Changes in rankings methodology raise the bar of e-readiness
    leadership
    
E-readiness continues to improve around the world in 2007, but achieving it is becoming more complex. To reflect this, the Economist Intelligence Unit has "raised the bar" of e-readiness by modifying its ranking methodology. This change in methodology, along with underlying improvements in individual countries, has led to changes in the league table. Several countries, particularly in Asia, have seen their positions improve, while others have experienced (mostly slight) declines. At the same time, the fundamental tenets of e-readiness remain unchanged, and the leaders in 2006 are still leaders today -- nine of last year's top ten countries remain in that bracket.

Denmark and the US retain their number one and two spots in the rankings (with Sweden also tied for 2nd), but Hong Kong (4th), Singapore (6th), South Korea (16th), Taiwan (17th) and Japan (18th) have experienced a boost in 2007 in both scores and ranks. This is due in no small part to their governments' vision and commitment in pushing digital development, and to continued progress in adoption of broadband and other advanced infrastructure.

Several top-tier countries, meanwhile, experienced a shift in their overall e-readiness performance as a result of the methodology changes. This is mainly due to a sharpened focus on the policy environment and e-government, as well as education and innovation. Among the countries affected were Switzerland (5th), Canada (13th), Germany (19th) and Ireland (21st). Their e-readiness has not declined, but the model refinements have uncovered areas where they and other countries need to improve to maintain progress.

"Technology leadership in the world is becoming a fast-moving target," observes Robin Bew, Editorial Director of the Economist Intelligence Unit. "Those at the top of today's league table cannot be complacent -- changing technologies, and attitudes to technology usage, mean that hard-won advantages can be quickly eroded by nimble-footed rivals."

Since 2000, the Economist Intelligence Unit has published an annual e-readiness ranking of the world's largest economies, using a model developed together with the IBM Institute for Business Value. 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. Increasingly, it is also about how individuals and businesses consume digital goods and services.

"The role of governments in laying the structural and policy groundwork for an Internet-ready economy is essential today as business and society adapt to ongoing globalisation," says George Pohle, Global Leader, IBM Institute for Business Value. "This groundwork, as reflected in this year's rankings, provides a critical path for individuals and businesses to apply these new digital channels in innovative applications -- spurring further economic development."

Other highlights of the 2007 rankings include the following:

--  E-readiness goalposts for countries are shifting. Internet
    connections, for example, must not only be available, they should be fast,
    secure and affordable if people are to use the Web efficiently. And while
    it is important for governments to push high-speed Internet use through
    sound policy, actually delivering services through electronic channels
    provides an indicator of policy success, as does the consumption of other
    online goods and services by consumers and businesses. Accordingly, the
    Economist Intelligence Unit has introduced new ranking criteria in 2007 and
    modified or re-weighted others. The changes have particularly affected the
    assessment of countries' digital infrastructure, the legal and policy
    environment surrounding its use, and how individuals and businesses consume
    digital services.
    
--  The digital divide continues to narrow, even with the model changes.
    Notwithstanding the decline of some countries' scores, the world's overall
    e-readiness is improving perceptibly: a global average score of 6.02 in
    2006 rose to 6.24 this year. And the gap between "haves" and "have-nots" is
    decreasing: the distance between the highest and lowest scoring countries
    dropped from 6.08 points to 5.80 points this year. The score differentials
    between the top, middle and lower tiers also continue to decline.
    
--  Broadband is increasingly affordable, and almost everywhere. One
    factor in the narrowing divide is the absence of a large gap between
    developed and developing markets in broadband affordability, one of the new
    indicators we have introduced in 2007.  The lowest speed of DSL service
    available in west European and North American markets costs households 1%
    or less of median monthly income. In other regions, broadband affordability
    levels are not substantially lower (between 3% and 10% of household
    income). The expanding global use of mobile devices and applications,
    meanwhile, continues to provide a technology "leveller" of sorts between
    developing and developed countries.
    
Economist Intelligence Unit e-readiness rankings, 2007

2007 e-readiness   2006     Country    2007 e-readiness  2006
rank (of 69)       rank                 score (of 10)    score
     1              1        Denmark       8.88          9.00
     2 (tie)        2             US       8.85          8.88
     2 (tie)        4         Sweden       8.85          8.74
     4             10      Hong Kong       8.72          8.36
     5              3    Switzerland       8.61          8.81
     6             13      Singapore       8.60          8.24
     7              5             UK       8.59          8.64
     8              6    Netherlands       8.50          8.60
     9              8      Australia       8.46          8.50
    10              7        Finland       8.43          8.55
    11             14        Austria       8.39          8.19
    12             11         Norway       8.35          8.35
    13              9         Canada       8.30          8.37
    14             14    New Zealand       8.19          8.19
    15             20        Bermuda       8.15          7.81
    16             18    South Korea       8.08          7.90
    17             23         Taiwan       8.05          7.51
    18             21          Japan       8.01          7.77
    19             12        Germany       8.00          8.34
    20             17        Belgium       7.90          7.99
    21             16        Ireland       7.86          8.09
    22             19         France       7.77          7.86
    23             22         Israel       7.58          7.59
    24             --         Malta*       7.56            --
    25             25          Italy       7.45          7.14
    26             24          Spain       7.29          7.34
    27             26       Portugal       7.14          7.07
    28             27        Estonia       6.84          6.71
    29             28       Slovenia       6.66          6.43
    30             31          Chile       6.47          6.19
    31             32     Czech Rep.       6.32          6.14
    32             29         Greece       6.31          6.42
    33             30            UAE       6.22          6.32
    34             32        Hungary       6.16          6.14
    35             35   South Africa       6.10          5.74
    36             37       Malaysia       5.97          5.60
    37             39         Latvia       5.88          5.30
    38             39         Mexico       5.86          5.30
    39             36       Slovakia       5.84          5.65
    40             34         Poland       5.80          5.76
    41             38      Lithuania       5.78          5.45
    42             45         Turkey       5.61          4.77
    43             41         Brazil       5.45          5.29
    44             42      Argentina       5.40          5.27
    45             49        Romania       5.32          4.44
    46 (tie)       43        Jamaica       5.05          4.67
    46 (tie)       46   Saudi Arabia       5.05          5.03
    48             44       Bulgaria       5.01          4.86
    49             47       Thailand       4.91          4.63
    50             48      Venezuela       4.89          4.47
    51             49           Peru       4.83          4.44
    52             54         Jordan       4.77          4.22
    53             51       Colombia       4.69          4.25
    54 (tie)       53          India       4.66          4.04
    54 (tie)       56    Philippines       4.66          4.41
    56             57          China       4.43          4.02
    57             52         Russia       4.27          4.14
    58             55          Egypt       4.26          4.30
    59             58        Ecuador       4.12          3.88
    60             61        Ukraine       4.02          3.62
    61             59      Sri Lanka       3.93          3.75
    62             60        Nigeria       3.92          3.69
    63             67       Pakistan       3.79          3.03
    64             64     Kazakhstan       3.78          3.22
    65             66        Vietnam       3.73          3.12
    66             63        Algeria       3.63          3.32
    67             62      Indonesia       3.39          3.39
    68             68     Azerbaijan       3.26          2.92
    69             65           Iran       3.08          3.15

* New to the annual rankings in 2007.
Source: Economist Intelligence Unit.
Note to editors

Methodology: How the scores were derived

Nearly 100 quantitative and qualitative criteria, organised into six distinct categories, feed into the e-readiness rankings. The six categories (and their weight in the model) are connectivity and technology infrastructure (20%); business environment (15%; the nine criteria used here summarise the 70 indicators covered by the Economist Intelligence Unit's business environment rankings); social and cultural environment (15%); legal and policy environment (10%); government policy and vision (15%); and consumer and business adoption (25%).

The data used in the rankings are sourced from the Economist Intelligence Unit, Pyramid Research, the World Bank and other organisations. Qualitative criteria are assessed by the Economist Intelligence Unit's extensive network of country experts, and their assessments are reviewed by our top economists. For more information on the methodology, please refer to our white paper, available in PDF format, at www.eiu.com/2007eReadinessRankings.

For this and previous e-readiness rankings, the Economist Intelligence Unit worked in co-operation with the IBM Institute for Business Value to build the rankings model. The Economist Intelligence Unit, however, is entirely responsible for the rankings and the content of this white paper.

About the Economist Intelligence Unit

The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of over 650 analysts, we continuously assess and forecast political, economic and business conditions in 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.

About the IBM Institute for Business Value

For more information visit www.ibm.com.

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