World's Best Countries for IT

U.S.: Top of the Heap—For Now

The U.S. creates the most supportive environment in the world for information technology firms, according to a study by the Economist Intelligence Unit conducted for the Business Software Alliance. The world's largest economy still does the best job in incubating innovative startups and developing top engineering talent, the study finds. Yet the U.S. is slipping.

The study ranks 66 countries by IT competitiveness, measuring six factors: the supply of skilled workers; the strength of intellectual property laws; the openness of the economy; the development of a tech-friendly infrastructure; government leadership; and an innovation-friendly culture. The countries that perform well in all six, the study found, are those with IT sectors that contribute more than 5% to a nation's gross domestic product.

The most important of the six is a country's research and development environment, measured by the number of IT-related patent registrations; this makes up 25% of a country’s score. IT infrastructure—the availability of broadband, secure servers, computer use, and market spending on hardware—accounted for 20%. Another 20% of the score is devoted to human capital, which measured the number of university students as a percentage of the college-aged population; enrollment in science programs; tech employment as a percentage of the total workforce; and the school system’s ability to train tech workers with business skills.

*New to Index

Rank 1 : U.S
Last Year's Rank: 1
Score: 74.6

The U.S. tops the index thanks to its role as a pacesetter in encouraging innovation and developing talent, but Europe and Asia are narrowing the gap. Some of the world's largest tech companies—from computer maker Hewlett-Packard (HPQ) to chipmaker Intel (INTC) to Internet leader Google (GOOG)—are based in the U.S.


Rank 2 : Taiwan
Last Year's Rank: 6
Score: 69.2



Taiwan rises to second place mostly on the strength of its R&D environment and on its ability to nurture technology talent.


Rank 3 : Britain
Last Year's Rank: 4
Score: 67.2



Britain is second in the world behind Norway in support for IT industry development and leads Western Europe overall. Telecom giants Vodafone (VOD) and British Telecom (BT) are based in London.

Rank 4 : Sweden

Last Year's Rank: 7
Score: 66.0



Sweden made improvements in its business environment and IT infrastructure; the country is also a prolific generator of patents.


Rank 5 : Denmark
Last Year's Rank: 8
Score: 65.2



This northern European country rose three places on improvements in human capital and IT infrastructure.


Rank 6 : Canada
Last Year's Rank: 9
Score: 64.4



Canada scores high on most metrics, though it lags on R&D. The country improved three positions mostly on improvements in the area of human capital.


Rank 7 : Australia
Last Year's Rank: 5
Score: 64.1



Second only to Taiwan overall in the APAC region, Australia fell two positions in part because of its low score on R&D, where it ranks 20th.


Rank 8 : South Korea
Last Year's Rank: 3
Score: 64.1



Home to such tech heavyweights as LG Electronics, South Korea scores high for its business environment, and third in the world for support of IT industry. The country ranks second only to the U.S. in the area of human capital.


Rank 9 : Singapore
Last Year's Rank: 11
Score: 63.4



Singapore is second only to the U.S. in terms of development of human capital, and it ranks third in IT industry development; the city-state's legal environment ranks 15th.


Rank 10 : The Netherlands
Last Year's Rank: 12
Score: 62.7



Home to electronics giant Philips Electronics, the Netherlands jumped two places from last year largely on the strength of its business environment and high-quality infrastructure; it scores low on R&D.