Land of the Wired: U.S. First in IT Use

The United States has regained its position as the most wired nation in the world, according to a report by the World Economic Forum (WEF).

The WEF’s Global biannual “Information Technology” report measures the information and communication technology readiness of 115 countries. Countries are ranked on more than 5 dozen factors, including their communications infrastructure, level of government regulations, quality of schools, availability of venture capital, and the level of business and government usage of the latest technologies. These factors compose what the WEF calls a networked readiness index.

Irene Mia, senior economist at the WEF, says the index, by identifying a country’s strengths and weaknesses in IT, helps governments prioritize their development efforts. “The report provides the perfect platform for public-private dialogue and [emphasizes] the importance of ICT [information and communication technology] for [a country’s] development.”

The United States rose from fourth place in the WEF’s last ranking, published in 2004. More significant, however, is the fact that the United States has held the top position for three out of the past five years, according to Augusto Lopez-Claros, chief economist at the WEF and coeditor of the report.

The WEF also notes that the United States continues to be a leader in technological innovation, which the report attributes to the quality of its universities and cooperation between its research and business communities.

One reason the United States tops the list so often is that U.S. companies are more decentralized and better managed, according to a study by John Van Reenen and Raffaella Sadun of the London School of Economics that is part of the WEF report. As a result, U.S. companies obtain higher returns from their IT investments. In industries that rely heavily on IT, U.S. companies had greater productivity gains than their European counterparts, according to the study.

Singapore, which held the top spot in 2004, dropped to second place this year. The city-state has ranked among the top three most-wired countries in each of the past four years, the report says, because of its economy, its commitment to higher education, and government support for the latest technologies. The government of Singapore recently launched an effort to upgrade its broadband infrastructure and deploy a national wireless network (see “Broadband for Everyone—in Singapore” this page).

Denmark, Iceland, Finland and Sweden have also established themselves as technology leaders, occupying places in the top 10 for the past five years. This year, the countries took third, fourth, fifth and eighth places respectively. These Nordic countries share characteristics similar to those of other IT leaders, the report says. Top-notch universities and flexibility of government regulations in these countries have created an environment that encourages innovation, the deployment of emerging technologies and new business ventures.