India Ranks 48th In Global IT Competitiveness Index

India ranks 48th in the world in the 2008 IT industry competitiveness index, moving 2 places from its 2007 ranking of 46 in the index. India has an overall score of 28.9 on the IT competitiveness index. These are among the findings of a new study issued by the Economist Intelligence Unit (EIU) and sponsored by the Business Software Alliance (BSA).

The study, now in its second year, assesses and compares the information technology (IT) industry environments of 66 countries to determine the extent to which they enable IT sector competitiveness. Although the top 20 economies remain the same from one year ago, nine countries moved up and 11 went down in the rankings. Three countries in the top five are new: Taiwan, Sweden and Denmark. The top five countries in order of ranking in Asia Pacific are Taiwan, Australia, South Korea, Singapore and Japan respectively.

The EIU examined attributes like supply of skills, innovation-friendly culture, technology infrastructure, enforcement of IPRs, business environment and government support while analysing the IT environments of participating countries.

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Those countries that perform well in these six ‘competitiveness enablers’ generally are home to high-performance IT industries. High performing IT sectors directly contribute more than 5 percent to the gross domestic product of most advanced nations. They also drive momentum in the wider economy by helping organisations and workers to be more efficient and productive.

“This year’s index shows that a country’s IT competitiveness rankings can fluctuate on the index very rapidly” said Keshav Dhakad, chair of the BSA India Committee. “The ability of local governments and IT industries to deliver jobs and a better quality of life through information technology is strongly affected by how they handle the six drivers of competitiveness. The government has made progress, however, there is still a greater need to develop a stronger legal and R&D environment; complemented with a better IT infrastructure to help Indian firms become more competitive and leaders in the technology space. The recent evolutionary trends in the domestic IT industry towards product development for both national and international markets are very encouraging and healthy. It is clear that the demand for IPR, government support and robust infrastructure will only grow as India makes inroads into the world product market to become greater than a billion dollar industry within less than a decade. India cannot afford to lose this opportunity”.

The study finds that India performed strongest in business environment and support for IT industry development with a score of 59.3 percent and 54 percent respectively, which is an encouraging indicator. Areas of improvement include IT infrastructure and R&D environment in the country, which are relatively low in the IT industry competitiveness index.

“There is a strong link between the presence of IT competitiveness enablers and the strength of local technology economies,” confirms Denis McCauley, director, Global Technology Research with the Economist Intelligence Unit. “Governments and industry leaders must pay close attention to these factors if they want to reap the benefits of a globally competitive IT industry.”

Among other findings, the study showed that investing in people is mission-critical for domestic IT industries; competitive broadband markets help cultivate strong IT sectors; a legal environment that protects IPRs and takes a robust approach to cyber crime is essential and globalisation and the Internet will ‘liberate’ R&D in the time to come. Ecosystems, online or otherwise, that bring together talent, technology, venture capital, and good universities, supported by a risk-taking ethos, will be the best incubators of innovation.