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And the winner is . . . Sweden?

By Hugh McKellar, KMWorld executive editor

You heard it. Sweden tops the list. Denmark is second, followed by a tie between the Netherlands and a couple other countries.

What list, you wonder? The Economist’s Economist Intelligence Unit’s fourth annual “e-readiness” rankings. E-readiness is described as the extent to which a nation’s economy is conducive to Internet-based opportunities. In the past two years, the Intelligence Unit has worked in cooperation with IBM, and this year they looked at the 60 largest world economies.

To establish the e-readiness ranking, the researchers use some 100 criteria organized into six major categories. Connectivity and technology infrastructure, which accounts for 25% of the score, assesses the accessibility of individuals and businesses to fixed and mobile telephony, PCs and the Internet. Price, quality and reliability were also rated, as was security of content and transactions over the Internet.

The unit employed 70 business climate (20%) indicators, based on five-year projections, including such items as political stability, economic strength, tax policy, competition atmosphere, the labor market, infrastructure quality and openness to trade and investment.

The unit also gave consumer and business adoption a weight of 20% by measuring the prevalence of e-business practices, such as the percentage of online retail commerce and prevalence of Internet use to overhaul and automate mortar-to-click transactions. IT investment also is a key element in terms of "state spending on IT as a proportion of GDP, level of e-business development,, degree of online commerce, quality of logistics and delivery systems and the availability of corporate financing,” the report indicates.

The legal and policy environment contributed 15% to the e-readiness ranking and considered both the country’s laws dealing with Internet use as well as its overall legal structure. The Economist’s Intelligence Unit sought to examine such issues as ease of registering a new business and private and intellectual property protection. It gave higher ranks to those countries facilitating an Internet-conducive legal landscape, from both policy and enforcement standpoints. Countries seemingly more concerned with censoring content and controlling the Web received lower scores.

Another 15% category in the assessment was social and cultural infrastructure, which deals with literacy and basic education as it refers to the technical skills of the work force and receptivity to Web usage. Also examined were such intangibles as the "national proclivity to business innovation and entrepreneurship.” The final criterion (5%) was e-business support, including consulting, IT services and back-office solutions.

IBM and the intelligence unit note that most countries have improved their rankings over the previous study, largely because of broadband expansion, wide acceptance of mobile telephony and government support of Internet initiatives and legislation. On the other hand, political instability has adversely affected virtually all aspects of business vitality in certain regions. The recent weakening of the U.S. economy and its impact on the global economy dropped scores for a host of the 60 economies in the study.

But that said, only optimism can come from the findings—no country fell behind significantly. Development of IT infrastructure globally is more important than ever, and programs to bring the Internet into schools are on a solid upward curve. There is no reason to believe that should abate over the long term.

By the way, the two nations sharing third place with the Netherlands are the United States and Great Britain.

The fullEconomist Intelligence Unit/IBM study can be downloaded

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