India ranked 44th in IT competitiveness: Study

BANGALORE, INDIA: India ranks 44th in the world in the 2008 IT industry competitiveness index, moving 4 notches up from its 2008 ranking of 48 in the index, said a study released today. India has an overall score of 34.1 on the IT competitiveness index. These are among the findings of a new study undertaken and issued by the Economist Intelligence Unit (EIU) and sponsored by the Business Software Alliance (BSA).

The study, now in its third year, assesses and compares the information technology (IT) industry environments of 66 economies, to determine the extent to which they enable IT sector competitiveness.

Keshav S Dhakad, chair of the BSA India Committee, said India has maintained its ability to develop strong talent and maintain a conducive business environment.

“This year’s ranking is indicative of the progressive initiatives taken by the government & the industry on human capital and support for IT development,” he added.

“In today’s economic climate, it is critical that governments in the Asia Pacific continue to support the growth of a strong technology sector. The IT sector remains an important engine of economic growth, and economies in the region that are supporting innovation and taking steps to stimulate technology sector output are placing themselves in a strong position to accelerate economic recovery,” said Jeffrey Hardee, BSA vice president and regional director, Asia Pacific.

“Additionally, the study shows that economies that have strong legal frameworks for the protection of intellectual property (IP) are generally the IT leaders and score higher in the index. In contrast, economies where IP protection has not been well enforced are not traditionally seen as innovators. Some rely instead on their low-cost labor markets to remain competitive but this is hard to sustain over time,” Hardee added.

He said that by improving on the factors that contribute to IT competitiveness, Asian economies will not only improve their ranking but also generate long term economic growth.

Category wise, India has shown improvement in its R&D environment, moving from a score of 0.6, last year to 22.0 this year. It has also shown strong performance in the business environment and encouraging improvements in the legal environment. India still continues to have the advantage of human capital. However fluctuating performance in IT infrastructure needs improvement, a press release said, citing the study.

In the fast growing markets like India, large pools of skilled IT employees remain a significant advantage but uneven progress in other areas, such as IT infrastructure remains a drag on sector competitiveness. As the Internet becomes all pervasive, slow uptake in broadband and PC penetration has had a significant impact on the IT infrastructure in India.

Within Asia Pacific, India ranks amongst the top ten countries, with the top three positions held by Australia, Singapore and Japan. As in India, robust IP protection and broadband penetration are some of the key concerns in the Asia Pacific region.

The study considered six factors to work together to create a sound environment for the IT sector. They are: an ample supply of skilled workers, an innovation-friendly culture, a world-class technology infrastructure, a robust legal regime that protects intellectual property, a stable, open, and competitive economy, and government leadership that strikes the right balance between promoting technology and allowing market forces to work.