In its third annual study into IT sector competitiveness among 66 countries, the Economist Intelligence Unit observed that protectionist instincts are on the rise in many governments’ technology sector policies. The IT sector is viewed by most policymakers as an important engine of growth, and economic stimulus packages have often included measures to help boost domestic IT output.
The 'buy local' provisions attached to some plans fail to recognise the global nature of the IT industry. These and schemes to support 'national champions' or other struggling domestic producers will only prevent more innovative IT firms from being able to compete, and are likely to harm long-term sector competitiveness.
Supporting this view, Denis McCauley, Director of Global Technology Research with the Economist Intelligence Unit says, "Globally, the IT sector has ridden out the economic crisis reasonably well, despite reduced technology spending.”
“Rather than pushing short-term measures designed to expand sector output or support ailing technology firms, policymakers need to remain focused on strengthening the fundamental enablers of long-term sector competitiveness."
Despite the emergence of such protectionist impulses, the US retains its top ranking in the Economist Intelligence Unit’s IT industry competitiveness index in 2009. Other strong performers in the index are Canada and West European countries such as Finland, Sweden and the Netherlands, with the UK at number 6. Each country boasts highly developed and widely accessible IT infrastructure and offers strong support for technology R&D.
In emerging markets, large pools of skilled IT employees remain a significant advantage for China, India, Russia and other countries, but uneven progress in other areas, such as IT infrastructure, holds back their IT sector competitiveness.
The index results are highlighted in a new report, ‘Resilience amid turmoil: Benchmarking IT industry competitiveness 2009’, written by the Economist Intelligence Unit and sponsored by the Business Software Alliance (BSA).
“Information technology offers efficiency gains that benefit nearly every segment of every economy. Support for the long-term development of a competitive IT sector can accelerate the economic recovery and lay a foundation for the technology solutions of the future," says Robert Holleyman, president and chief executive officer of BSA. "In the uncertainty of today’s economic climate, pro-innovation policies that cultivate growth in the technology sector are more important than ever.”