Chinese Government Takes Rapid Strides in ICT Use

That the Nordic countries again lead the networked readiness index ranking -- for the third time in a row -- in the World Economic Forum's  Global Technology Report 2009 released last week, is no surprise. Given their small sizes and relatively sparse population, top-notch education system, their impressive per capita income, as well as the high importance given by their Governments to adopt ICT in their general competitive agenda, it is quite natural that these countries would frequently be at top of networked readiness list.

What is surprising however, is that the biggest leap in improvement of ICT adoption and networked readiness was taken by a country which had been far lower in the previous year. According to the latest Networked Readiness Index [NRI] of the WEF as reflected in the Global Technology Report 2009, China by ranking 46th this year, leapfrogging 11 positions, thus overtaking India and the rest of the BRIC economies for the first time.

Even more impressive is the fact that in the readiness component of the NRI, the Government Readiness matrix moved up an impressive 9 places (33rd from 42) indicating that, unlike many other developing nations, the government of even a communist-led country has realized the extraordinary capacity of ICT to drive growth and innovation, and is increasing its ICT usage too to render more services and efficiency.

"Anyone who has been following China's rise in the last few years would not find it surprising that China has performed so well," says Irene Mia the co-analyst and co-author of the report who is also an economist at the World Economic Forum. "After all China is the biggest exporter of ICT products and is one of the most dynamic countries in terms of ICT use. Yet the element that is worth noting is the role of the Chinese government to use ICT and putting it at the center of its development agenda to improve its efficiency."

According to Soumitra Dutta, professor of the business and technology studies at INSEAD, France, who is the other co-author of the report, China has been investing very heavily in technology over the last several years, "and the results of that investment is coming upright now."

But although Dutta says that he expects "China to continue to rise in ranking in the next few years," there are nevertheless some weaknesses that China needs to address to make the growth of its ICT use sustainable.

For one, the sheer size of the country makes its existing ICT infrastructure insufficient to sustain a long term growth. That comes in the way of Internet, mobile telephony and PC penetration.

"But the biggest weakness of China is its regulatory environment especially with respect to its intellectual property [IP] protection," says Mia.

The Global Information Technology Report series, produced by the WEF in partnership with INSEAD annually since 2001, is one of the most significant efforts that has helped in raising awareness of the importance of ICT diffusion for overall competitiveness. The Networked Readiness Index, that WEF calculates, identifies the enabling factors that permit countries to fully benefit from ICT advances, stressing the key responsibility of all social actors --individuals, businesses, and governments.

According to WEF, NRI has not only emerged as an important tool for policymakers and even stakeholders to measure the progress of a country's ICT use and adoption, but has also been a facilitator for designing national policies and strategies that aim toward enhanced networked readiness and competitiveness.

The eighth edition of the Report covered a record 134 economies.

Besides the fact that Denmark and Sweden continue to be assessed as the world's most networked economies and along with Sweden, Finland, Iceland, the Nordic region continues to feature prominently in the NRI 2008-2009 rankings, the other siginifacnt development is that the Middle East region is also on the rise.

"This region has progressed rapidly as well due to its stellar increase in Internet penetration," says Mia, "and also the fact that in order to diversify their economy from oil and to modernize their society, the governments in these countries have put ICT at the center of their development agenda."

The other notable features in this year's ranking are the facts that Singapore (ranking 4) was the only Asian country to feature in top 10, while the United States moved up one position (to 5), confirming its pre-eminence in networked readiness in the current times of economic slowdown.

"The US has done very well," says Dutta. 'It is one of the large countries that has always been on the top. It has tremendous strength in terms of attracting talent and a great track record in start-up tech companies. And while US certainly has a challenge in the financial sector, on the whole technology is in a very strong position."