Singapore most IT competitive APAC market

Strong investments in human capital and other fundamentals help city-state overtake Australia to become most IT competitive in region and third globally, new BSA report finds.
Written by Jamie Yap, Contributor

SINGAPORE--Strong investments in human capital, particularly IT employment and enrolment in higher education, have helped Singapore emerge as the No. 1 Asia-Pacific market in terms of IT competitiveness, and third globally, a new report revealed.

The Business Software Alliance's (BSA) Global IT Competitiveness Index, which was released Tuesday, noted that besides Singapore, six other Asia-Pacific countries--Australia, Taiwan, Japan, New Zealand, South Korea and Hong Kong--made it on the top 20 list, too.

The region's strong showing proves that investments in IT do pay off, said Roger Somerville, senior director of government and policy for BSA Asia-Pacific.

Somerville, who was speaking at the media briefing here Tuesday in conjunction with the launch of the Index, added that the seven countries, out of 17 Asian economies surveyed, on the list is a "high proportion" when compared with previous editions.

Commissioned by the BSA and conducted by the Economist Intelligence Unit (EIU), the Global IT Competitiveness Index benchmarked 66 countries in the world according to six criteria: overall business environment; IT infrastructure; human capital; research and development; legal frameworks; and IT industry support.

Globally, the United States continued to lead with 80.5 points while Finland came in next at 72.0. Singapore took third spot with 69.8, overtaking Australia, which was the top Asia market in the previous study released in 2009.

Investments in IT pay off
Commenting on the findings, Somerville said the main reason why established IT powerhouses continue to cling on to leadership positions, even as other emerging markets raise their game, is because "advantage begets advantage".

He explained that despite its current fiscal difficulties, the U.S. economy remains top on the Index as its long, sustained periods of past investments in the six criteria "are still paying off" and have become "self-churning".

"Such economies with solid IT fundamentals won't topple off suddenly," he added.

That said, Somerville noted that this year's results clearly highlighted how "investment begets advantage" as well, since the countries which saw the most improvement in rankings were the ones which pumped significant resources into their IT initiative.

In fact, most of these countries came from the Asia-Pacific region, he pointed out. Singapore, in particular is a role model of how investing in IT brings benefits. The city-state's competitiveness is largely based on its human capital ranking such as IT employment and enrolment in higher education, he revealed.

Singapore also has a positive business environment and is a regional leader in intellectual property (IP) laws and other forms of legal protection, Somerville added.

The BSA executive also said of the six criteria, there is no one criterion that will singlehandedly boost an economy's IT competitiveness.

Citing China as an example, Somerville said it has spent a great deal on IT infrastructure, or as he puts it "things that money can fix", such as PC ownership and broadband penetration. While such investments have helped, he said no economy can focus on "just ensuring everyone has a mobile phone".

So China is now looking at the "softer side" of the criteria, including how people can be innovative and improving its IP and legal environment, he noted.

Overall, while Western economies still performed strongly in the index, Asian economies are fast improving and could potentially reshape the global IT marketplace, Somerville said.

"There is a movement or expansion of IT competitiveness from the bastions to emerging economies, where investments in the right places begets advantages and [act as] an escalator [to move up the ranks]," he concluded.

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