SOURCE: IBM

April 20, 2005 05:01 ET

US, Switzerland and Slovakia the Biggest Gainers in Economist Intelligence Unit's Sixth Annual E-Readiness Rankings

LONDON -- (MARKET WIRE) -- April 20, 2005 --


Key findings

--  Denmark retains the top spot among 65 countries, edging out the
    resurgent United States
--  Switzerland, Slovakia and the US register the biggest gains in rank
    from 2004
--  Hong Kong assumes the lead among Asia-Pacific's digital tigers
--  Heavier model emphasis on broadband leads to major score increases for
    top 20 countries
--  Developing countries are held back by an infrastructure deficit, but
    many are making progress
    
For perhaps the first time since the technology bubble burst, the global economy is beginning to feel comfortable in a digital skin. Spending on information and communications technology (ICT) is growing again with some buoyancy in developed markets. In emerging markets, expansion of connectivity -- Individuals' and organisations' access to voice and data communications -- continues on a rapid ascent. Broadband Internet access, meanwhile, is beginning to reach critical mass in several countries and is becoming a catalyst for other improvements in the digital economy. The 2005 edition of the Economist Intelligence Unit's e-readiness rankings, produced in co-operation with IBM's Institute for Business Value, reflects the increasing importance of broadband to countries' digital development. As a result, the world's most developed broadband markets have registered significant score increases over 2004, although only some have moved up in the rankings.

Since 2000, the Economist Intelligence Unit has published an annual e-readiness ranking of the world's 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. Our ranking methodology has undergone significant modification in 2005: many criteria have been reweighted to reflect their increasing importance in determining e-readiness, such as broadband access and mobile penetration. New metrics have also been added, such as innovation and the penetration of public-access wireless "hotspots."

The Economist Intelligence Unit developed the criteria for the e-readiness rankings with the IBM Institute for Business Value. "The e-readiness rankings are very dynamic," says George Pohle, Global Leader, IBM Institute for Business Value. "Leadership requires continued focus, strategic planning and targeted investment, but that is only the beginning. The hard work is in using the leadership to complete a blend of public and private initiatives that yield meaningful improvements for private citizens, businesses and government. That is where the return on these investments are ultimately being achieved."

Among the main conclusions of this year's rankings:

Europe dominates. West European countries take seven of the top ten spots in this year's rankings, and the Nordics occupy four of them. Denmark (in 1st place), Sweden (3rd), Finland (6th) and Norway (9th) remain best in class in key areas of connectivity, such as mobile penetration and Internet use. The first two are also standard-setters in e-government implementation. Broadband development has also helped Switzerland rise to 4th place, and the Netherlands to keep its 8th spot.

America resurgent. The US has recovered the number two position after falling back in the previous year. Not only has the US seen broadband adoption surge forward, but the country remains a global leader in secure Internet server penetration and ICT spending.

Hong Kong leads in Asia-Pacific. Moving up to 6th place, Hong Kong has overtaken Singapore (11th) as the top Asian performer in the rankings, thanks to innovative development of e-business services, a positive legal and policy environment and advances in mobile services. South Korea (18th) remains the world's most developed broadband access market, but refinements to our model have revealed weaknesses in that country's e-readiness armour, such as in Internet security.

Emerging markets have some e-readiness elements in place. All the components of a digital economy -- infrastructure, security, transparency, innovation and skills -- must be properly interlaced to ensure adequate e-readiness. These are still in deficit in most emerging markets, but a few are world-class or near to it in selected areas, the best examples being Estonia (26th), Slovenia (27th) and the Czech Republic (29th) with their strong development of e-government services. India (49th) and China (54th) remain on the lower rungs of the e-readiness ladder, but are making growing contributions to the global digital economy on the strength of a strong ICT skills base (India) and a prodigious ICT manufacturing sector (China).

Economist Intelligence Unit e-readiness rankings, 2005

   2005                                      2005
e-readiness                               e-readiness
rank (of 65)  2004 rank    Country      score (of 10)*  2004 score

   1             1         Denmark          8.74           8.28
   2             6         US               8.73           8.04
   3             3         Sweden           8.64           8.25
   4            10         Switzerland      8.62           7.96
   5             2         UK               8.54           8.27
   6 (tie)       9         Hong Kong        8.32           7.97
   6 (tie)       5         Finland          8.32           8.08
   8             8         Netherlands      8.28           8.00
   9             4         Norway           8.27           8.11
  10            12         Australia        8.22           7.88
  11             7         Singapore        8.18           8.02
  12 (tie)      11         Canada           8.03           7.92
  12 (tie)      13         Germany          8.03           7.83
  14            12         Austria          8.01           7.68
  15            16         Ireland          7.98           7.45
  16            19         New Zealand      7.82           7.33
  17            17         Belgium          7.71           7.41
  18            14         S. Korea         7.66           7.73
  19            18         France           7.61           7.34
  20            22         Israel           7.45           7.06
  21            25         Japan            7.42           6.86
  22            20         Taiwan           7.13           7.32
  23            21         Spain            7.08           7.20
  24            23         Italy            6.95           7.05
  25            24         Portugal         6.90           7.01
  26            26         Estonia          6.32           6.54
  27            31         Slovenia         6.22           6.06
  28            27 (tie)   Greece           6.19           6.47
  29            27 (tie)   Czech Republic   6.09           6.47
  30            30         Hungary          6.07           6.22
  31            29         Chile            5.97           6.35
  32 (tie)      36         Poland           5.53           5.41
  32 (tie)      32         South Africa     5.53           5.79
  34            39 (tie)   Slovakia         5.51           5.33
  35            33         Malaysia         5.43           5.61
  36            39 (tie)   Mexico           5.21           5.33
  37            34         Latvia           5.11           5.60
  38            35         Brazil           5.07           5.56
  39            37         Argentina        5.05           5.38
  40            38         Lithuania        5.04           5.35
  41           n/a         Jamaica**        4.82            n/a
  42            42         Bulgaria         4.68           4.71
  43            45         Turkey           4.58           4.51
  44            43         Thailand         4.56           4.69
  45            44         Venezuela        4.53           4.53
  46            48         Saudi Arabia     4.38           4.38
  47            50         Romania          4.19           4.23
  48            41         Colombia         4.18           4.76
  49            46         India            4.17           4.45
  50            47         Peru             4.07           4.44
  51            49         Philippines      4.03           4.35
  52            55         Russia           3.98           3.74
  53            51         Egypt            3.90           4.08
  54            52 (tie)   China            3.85           3.96
  55            56         Ecuador          3.83           3.70
  56            52 (tie)   Sri Lanka        3.80           3.96
  57            54         Ukraine          3.51           3.79
  58            58         Nigeria          3.46           3.44
  59            57         Iran             3.08           3.68
  60            59         Indonesia        3.07           3.39
  61            60         Vietnam          3.06           3.35
  62            63         Kazakhstan       2.97           2.60
  63            61         Algeria          2.94           2.63
  64            62         Pakistan         2.93           2.61
  65            64         Azerbaijan       2.72           2.43

* Substantial differences between our 2005 and 2004 scores mainly
reflect changes we have introduced in our methodology.
** Jamaica is new to the annual rankings and was not ranked in 2004.
Source: Economist Intelligence Unit, 2005
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 (25%); business environment (20%), using the 70 indicators covered by the Economist Intelligence Unit's business environment rankings; consumer and business adoption (20%); social and cultural environment (15%); legal and policy environment (15%); and supporting e-services (5%).

Since launching the rankings in 2000, we have repeatedly upgraded and refined our methodology. This year, we have reweighted several criteria to reflect their increasing importance in determining e-readiness, such as broadband access, or refined their definition, such as Internet security. New metrics have also been added, such as innovation and the penetration of public-access wireless "hotspots." The majority of data is sourced from the Economist Intelligence Unit and Pyramid Research. 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 http://www.eiu.com/2005eReadinessRankings

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 newspaper. Through our global network of over 500 analysts, we continuously assess and forecast political, economic and business conditions in more than 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

The IBM Institute for Business Value develops fact-based strategic insights for senior business executives around critical industry-specific and cross-industry issues. The Institute, which is part of IBM Business Consulting Services, draws on IBM consultants around the world to identify issues of global interest and to develop practical recommendations with local relevance. With consultants and professional staff in more than 160 countries, IBM Business Consulting Services is the world's largest consulting services organization. This paper is part of an ongoing commitment by IBM Business Consulting Services to provide forward-looking industry and business points of view, and to help companies and industries transform their futures. For more information, visit www.ibm.com/bcs.

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