A survey by Professor Leonard Waverman, one of the world’s leading authorities on the impact of broadband, shows there is a continued need for investment in information and communications technology to stimulate return to economic growth

Increased focus on improving infrastructure, broadband penetration and developing the right workforce skills will counter the lingering effects of the current recession, according to the 2010 version of the Connectivity Scorecard.

The results from this year’s study reveal a leadership change in the innovation-driven economies —with Sweden overtaking the US for the top spot.

The Connectivity Scorecard is an annual study of “useful connectivity” in 50 countries around the world, by Professor Leonard Waverman, dean of the Haskayne School of Business at University of Calgary in Canada.

The survey covers 25 countries that are innovation driven or developed, plus 25 classified as resource and efficiency-driven economies — that is, emerging nations — with Malaysia and South Africa in the lead, followed by Chile, Argentina, Russia and Brazil.

According to the Connectivity Scorecard 2010, four Scandinavian countries — Sweden, Norway, Denmark and Finland — are in the top six countries in the developed list. Others in the top 10 are the US at number two, the Netherlands at number five, with Australia, the UK, Canada and Japan in positions seven to 10.

Useful connectivity is defined as the bundle of infrastructure, complementary skills, software and informed usage that makes ICT the key driver of productivity and economic growth. The study was sponsored by Nokia Siemens Networks and written by Waverman in conjunction with the economic consulting group LECG.

“The telecommunications and technology sectors proved to be remarkably resilient during the current global financial and economic crisis,” says Waverman. “Broadband penetration and mobile telephone adoption continued to grow in most economies — developed and developing — as did the adoption of many other ICT technologies.

“Economic recovery and government stimulus packages aimed at boosting broadband deployment and ICT development should provide room for optimism in the coming years.”

This in the third annual Connectivity Scorecard from NSN, but the first to displace the US for the top position.

Lasting gaps

The US, though still a very strong performer, proved not as consistent as Sweden in the past year, says the report. Its continued leadership in business infrastructure was not enough to overcome lasting gaps relative to the very best-performing nations, especially in the area of consumer broadband.

Conversely, Sweden has successfully narrowed the lead on Asian countries, such as South Korea and Japan, in mass-market next-generation broadband infrastructure.

In addition, the country has performed consistently well on all human skills levels — particularly the proportion of highly skilled workers. Frequent use of internet banking, internet commerce and e-government offerings also indicate advanced ICT usage patterns, the report indicates.

Anne Larilahti, head of global policy initiatives at NSN, commented: “It is heartening to realise that countries acknowledge the ICT ecosystem as the ultimate productivity driver for the 21st century.”

“The comparison between the US and Sweden actually brings us to the very essence of the Connectivity Scorecard,” added Waverman. “When we urge countries to step up the use of ICT to better exploit their potential, it is imperative that driving ICT infrastructure to the next level goes hand in hand with investment in human resource training.”

Sweden not only has the best current mix of attributes, but it also shows few signs of losing its lead, he added. “By contrast, there is the beginning of a gap in what was once the essence of US leadership in most industrial and service sectors — education and skills.”

Larilahti added: “It is to highlight the economic role of ICT and how countries can benefit from technology-driven growth that we commission the Connectivity Scorecard study.”

The survey noted the poor showing of southern European economies that is repeated again this year — with Italy, Spain, Portugal and Greece sharing the lowest rankings together with eastern European nations.

Marked gaps

The survey noted “marked gaps” between the bottom five or six innovation-driven economies and their better performing counterparts. While most of the countries in the middle ranks show at least a few areas of the scorecard in which they are substantially strong, it noted that this is not the case for southern and eastern European economies that are still lagging behind on all the dimensions of ICT deployment, uptake and utilisation.

Equally significant are the economic opportunities in these countries precisely because there is so much scope for them to catch up, the report said.

Malaysia maintained its lead among the 25 resource and efficiency-driven economies for the third year in a row. South Africa finished second, helped by strong corporate spending on IT hardware, software and services, while Latin American countries such as Chile, Argentina, Brazil and Mexico all registered relatively strong performances.

As with previous surveys, the Asian giants, India and China, did not perform impressively. China finished at number 17 and India at 21.

These findings might be surprising in light of the economic weight of the two countries, but they also highlight the tremendous economic ground that these sprawling and regionally varied nations still have to cover, said the survey.

Generally, there is a greater degree of convergence between the innovation-driven economies on many metrics such as telephone access, internet usage and broadband penetration, whereas there are fundamental differences between the various resource and efficiency-driven economies, it added.

Global Telecoms Business named Waverman in 2008 as one of the telecoms industry’s most influential people. He is a former professor of economics at the London Business School, where he stirred the industry by showing that mobile telecommunications has a positive benefit for people in developing countries.

His research focuses on how communications networks form a key component of the infrastructure crucial to a nation’s economic growth, along with roads and electricity. The explosion of mobile telephony across the developing world is shrinking the digital divide, Waverman has said, and is providing real opportunity for economic growth in the world’s poorest regions.

Rankings and scores

The scores are determined by the measurement of a series of indicators for each country in two areas — infrastructure and usage plus skills — in the categories of business, government and consumer, with weightings of each of the three specific for each country.

Low scores reflect gaps in a country’s infrastructure, usage or both. For each of the six components of the scorecard, countries are benchmarked against the best in class in their tier; thus if a country was best in all dimensions, it would score a maximum of 10. The scorecard, therefore, measures countries on a relative basis rather than on an absolute basis.

The Connectivity Scorecard is designed to provide a comparison of how countries rank in relation to each other at a given point in time. Waverman and NSN warn that it is hard to interpret the Scorecard in terms of absolute improvements or deteriorations and to make comparisons of scores over time.

In addition, they have made a number of changes to the indicators in the 2010 version to reflect changes in technology and to more precisely capture real-world data.

While direct comparisons are not possible, the study nevertheless offers some comment on country rankings and scores in 2010 compared to 2009, they note. GTB

The full version is available at www.connectivityscorecard.org

The scorecard for innovation driven — or developed — nations
is led by Sweden, followed by the US

Malaysia and South Africa lead the table for resource and
efficiency-driven economies — emerging nations

Source: www.connectivityscorecard.org