Despite being home to some of the most innovative tech firms in the world, the U.S. is slipping behind other nations in technology adoption and usage, according to the World Economic Forum.
Over the past decade, information and communications technology (ICT) has flourished around the world, but some countries have been quicker to adopt and implement new advances than others. Although the U.S. has been a driving force in the development of innovative technologies, its competitive ranking among other technologically advanced nations has begun to slip due to a range of social, economic and governmental conditions.
According to a new report from the World Economic Forum (WEF), the U.S. ranks fifth in networked readiness — a measure of a country's capacity to benefit from new technologies in competitive strategies and daily life — out of 138 countries listed. This is the U.S.'s second straight year at fifth place, down from third place in 2008-2009.
The annual WEF report evaluates countries according to 71 key economic and social indicators, including the level of governmental bureaucracy in a state, the diversity of new patents, the rate of mobile phone subscriptions and the availability of venture capital, among many others. The nations tracked by the report this year account for a combined 98.8 percent of the world's gross domestic product.
As in the 2009-2010 edition, Sweden is No. 1 on the list, taking the top spot in 12 of the 71 indicators and ranking in the top 10 among 35 others, giving it "one of the best climates for technological adoption and innovation." The country features one of the densest rates of technological penetration, with 90 percent of the population using the Internet on a regular basis and new technologies displaying a strong influence on business models, products and services. Sweden also has the fourth highest rate of new patent applications.
For the second consecutive year, Singapore is No. 2 on the list, while Finland has taken third place (up from sixth the previous year) and Switzerland remains at fourth. Rounding out the top 10 are Taiwan in sixth place (up from 11th place), Denmark in seventh (down from third), Canada in eighth (down from seventh), Norway in ninth (up from 10th) and South Korea ranks 10th (up from 15th).
"Innovation and ICT have proven a crucial lever for long-term growth, with countless social and economic benefits and the capacity to significantly improve people's life around the world," Alan Marcus, senior director and head of information technology and telecommunications at the WEF, said in an announcement of the findings. "Countries fully integrating new technologies and leveraging the new data revolution in their development and growth strategies are laying the foundations for competitive, resilient economies for the future."
Despite being the world's largest economy and pioneering many of the biggest breakthroughs in Internet technology, the U.S. appears to be lagging behind some of the other developed nations after having slipped two positions on the list in the previous edition of the WEF report. A number of factors are responsible for hindering its technological competitiveness.
"The country ranked particularly poorly in an area the WEF calls 'environment for ICT,' which measures the business, regulatory and infrastructure conditions necessary to support ICT companies and ventures," Forbes.com explains. "Since 2008, the U.S. has dropped from no. 3 globally to no. 10 to no. 14 in this category. That's a sign... that the U.S. may lack policies and business conditions that foster the development of ICT."
Compared to other countries, the tax rate on ICT in the U.S. is considered high, as are the monthly prices for cell phones and business and home phones, while the U.S. also scores relatively low in math and science education, coming in at No. 52 worldwide. These factors all contributed to the U.S.'s ranking this year.
However, the WEF data is based on proportional contributions to global ICT, meaning that U.S. tech exports and the nation's rate of new advances have not dropped in absolute numbers, but have only declined relative to other countries' shares. Moreover, U.S. businesses are still ranked among the highest levels for ICT readiness (No. 6) and usage (No. 3).
Traditional leaders of technological innovation and adoption remain on top of the list, but emerging markets are rapidly gaining ground. Some of the largest gains for future years are being forecast for rising Asian economies, or "Asian Tigers," as the WEF refers to them.
"While industrialized countries continue to lead the way, emerging economies are catching up fast and promise strong growth over the next decade," the Wall Street Journal's Tech Europe blog notes. "According to the report, most of the IT-related growth will come from emerging markets, as China and India, which are currently ranked 36th and 48th, have still a long way to go."
Apart from enhancing global networking capabilities and boosting business efficiency, the accelerating rate of new technology adoption and use is expected to have a profound impact on individual workers and citizens for the foreseeable future.
"Improvements in the speed and quality of broadband, as well as more interactive technologies, will have massive implications for productivity gains and new opportunities for individuals," Reutersreports. "The impact of such changes has been felt most recently in the Middle East and North Africa where political unrest has been facilitated in part by online social networks."
