The 2005 e-readiness rankings

For perhaps the first time since the technology bubble burst, the global economy is beginning to feel comfortable in a digital skin. Spending on information and communications technology (ICT) is growing again with some buoyancy in developed markets. In emerging markets, expansion of connectivity—individuals' and organisations' access to voice and data communications—continues on a rapid ascent. Broadband Internet access, meanwhile, is beginning to reach critical mass in several countries and is becoming a catalyst for other improvements in the digital economy. The 2005 edition of the Economist Intelligence Unit's e-readiness rankings, produced in co-operation with IBM's Institute for Business Value, reflects the increasing importance of broadband to countries' digital development. As a result, the world's most developed broadband markets have registered significant score increases over 2004, although only some have moved up in the rankings.

Since 2000, the Economist Intelligence Unit has published an annual e-readiness ranking of the world’s largest economies. A country’s 'e-readiness' is a measure of its e-business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. Our

ranking methodology has undergone significant modification in 2005: many criteria have been reweighted to reflect their increasing importance in determining e-readiness, such as broadband access and mobile penetration. New metrics have also been added, such as innovation and the penetration of public-access wireless 'hotspots'.

The Economist Intelligence Unit developed the criteria for the e-readiness rankings with the IBM Institute for Business Value. 'The e-readiness rankings are very dynamic', says George Pohle, Global Leader, IBM Institute for Business Value. 'Leadership requires continued focus, strategic planning and targeted investment, but that is only the beginning. The hard work is in using the leadership to complete a blend of public and private initiatives that yield meaningful improvements for private citizens, businesses and government. That is where the return on these investments are ultimately being achieved.'

Among the main conclusions of this year’s rankings:

Europe dominates. West European countries take seven of the top ten spots in this year's rankings, and the Nordics occupy four of them. Denmark (in 1st place), Sweden (3rd), Finland (6th) and Norway (9th) remain best in class in key areas of connectivity, such as mobile penetration and Internet use. The first two are also standard-setters in e-government implementation. Broadband development has also helped Switzerland rise to 4th place, and the Netherlands to keep its 8th spot.

America resurgent. The US has recovered the number two position after falling back in the previous year. Not only has the US seen broadband adoption surge forward, but the country remains a global leader in secure Internet server penetration and ICT spending.

Hong Kong leads in Asia-Pacific. Moving up to 6th place, Hong Kong has overtaken Singapore (11th) as the top Asian performer in the rankings, thanks to innovative development of e-business services, a positive legal and policy environment and advances in mobile services. South Korea (18th) remains the worlds most developed broadband access market, but refinements to our model have revealed weaknesses in that country's e-readiness armour, such as in Internet security.

Emerging markets have some e-readiness elements in place. All the components of a digital economy—infrastructure, security, transparency, innovation and skills—must be properly interlaced to ensure adequate e-readiness. These are still in deficit in most emerging markets, but a few are world-class or near to it in selected areas, the best examples being Estonia (26th), Slovenia (27th) and the Czech Republic (29th) with their strong development of e-government services. India (49th) and China (54th) remain on the lower rungs of the e-readiness ladder, but are making growing contributions to the global digital economy on the strength of a strong ICT skills base (India) and a prodigious ICT manufacturing sector (China).

Economist Intelligence Unit e-readiness rankings, 2005
2005 e-readiness rank (of 65)	2004 rank	Country	2005 e-readiness score (of 10)*	2004 score
1	1	Denmark	8.74	8.28
2	6	US	8.73	8.04
3	3	Sweden	8.64	8.25
4	10	Switzerland	8.62	7.96
5	2	UK	8.54	8.27
6 (tie)	9	Hong Kong	8.32	7.97
6 (tie)	5	Finland	8.32	8.08
8	8	Netherlands	8.28	8.00
9	4	Norway	8.27	8.11
10	12	Australia	8.22	7.88
11	7	Singapore	8.18	8.02
12 (tie)	11	Canada	8.03	7.92
12 (tie)	13	Germany	8.03	7.83
14	12	Austria	8.01	7.68
15	16	Ireland	7.98	7.45
16	19	New Zealand	7.82	7.33
17	17	Belgium	7.71	7.41
18	14	S. Korea	7.66	7.73
19	18	France	7.61	7.34
20	22	Israel	7.45	7.06
21	25	Japan	7.42	6.86
22	20	Taiwan	7.13	7.32
23	21	Spain	7.08	7.20
24	23	Italy	6.95	7.05
25	24	Portugal	6.90	7.01
26	26	Estonia	6.32	6.54
27	31	Slovenia	6.22	6.06
28	27 (tie)	Greece	6.19	6.47
29	27 (tie)	Czech Republic	6.09	6.47
30	30	Hungary	6.07	6.22
31	29	Chile	5.97	6.35
32 (tie)	36	Poland	5.53	5.41
32 (tie)	32	South Africa	5.53	5.79
34	39 (tie)	Slovakia	5.51	5.33
35	33	Malaysia	5.43	5.61
36	39 (tie)	Mexico	5.21	5.33
37	34	Latvia	5.11	5.60
38	35	Brazil	5.07	5.56
39	37	Argentina	5.05	5.38
40	38	Lithuania	5.04	5.35
41	n/a	Jamaica**	4.82	n/a
42	42	Bulgaria	4.68	4.71
43	45	Turkey	4.58	4.51
44	43	Thailand	4.56	4.69
45	44	Venezuela	4.53	4.53
46	48	Saudi Arabia	4.38	4.38
47	50	Romania	4.19	4.23
48	41	Colombia	4.18	4.76
49	46	India	4.17	4.45
50	47	Peru	4.07	4.44
51	49	Philippines	4.03	4.35
52	55	Russia	3.98	3.74
53	51	Egypt	3.90	4.08
54	52 (tie)	China	3.85	3.96
55	56	Ecuador	3.83	3.70
56	52 (tie)	Sri Lanka	3.80	3.96
57	54	Ukraine	3.51	3.79
58	58	Nigeria	3.46	3.44
59	57	Iran	3.08	3.68
60	59	Indonesia	3.07	3.39
61	60	Vietnam	3.06	3.35
62	63	Kazakhstan	2.97	2.60
63	61	Algeria	2.94	2.63
64	62	Pakistan	2.93	2.61
65	64	Azerbaijan	2.72	2.43
* Substantial differences between our 2005 and 2004 scores mainly reflect changes we have introduced in our methodology.
** Jamaica is new to the annual rankings and was not ranked in 2004.
Source: Economist Intelligence Unit, 2005

For more information on the methodology, please refer to our white paper, available in PDF format, at http://www.eiu.com/2005eReadinessRankings