Korea Falls to 8th in IT Competitiveness
By Kim Tong-hyung
Staff Reporter
South Koreans passionately claim that the country represents the world's most competitive in the information technology (IT) industry. However, researchers from the international business journal, Economist, think not.
A recent report by the Economist Intelligence Unit (EIU) identified Korea as the world's eighth-ranked IT industry in 2008, dropping five spots from its previous ranking and trailing another Asian economy, Taiwan, which finished second behind the United States.
The EIU ranked 66 countries in the report, titled ``How Technology Sectors Grow: Benchmarking IT Industry Competitiveness 2008,'' based on the six categories of business environment, infrastructure, human capital, legal environment, research and development (R&D) environment, and government support.
The U.S. topped the list for the second consecutive year, scoring 74.6 points out of 100, Britain finished third with 67.2, while Sweden (66) and Denmark (65.2) rounded out the top five. Singapore was another Asian country in the top 10, finishing ninth with 63.4.
Japan (62.2), which finished second in the 2007 list, suffered the steepest drop on the index by finishing 12th.
The shift among Asian countries had much to do with the EIU's decision to change the methods for assessing patents, which explains Taiwan's rise in the standings and the slips of Korea and Japan, according to authors of the report.
Previously, the EIU index utilized patent figures covering the entire economy of a country. However, in the recent report, the EIU researchers attempted to estimate IT-specific patents by evaluating the share of a country's IT output, or the value of hardware and software production, in its gross domestic product (GDP).
Japan, for example, has fallen back in the category of R&D environment largely because the EIU believed the country's IT-related patents represented a smaller share of total patents than in other Asian economies such as Korea and Taiwan.
Korea (64.1) was still identified among the world leaders in developing talent for the IT industry, finishing fifth behind the U.S., Singapore, Britain and Ireland in that category.
Korea, and other Asian economies Taiwan and Japan, also remained leaders in the index for R&D and technology production.
The country finished second in the category for R&D environment with 59.9, but the gap with first-place Taiwan, which scored 74.3, was glaringly evident. Japan, at third place, scored 37.6 in the category.
Although the three East Asian countries were recognized for their innovation on the technology side, none finished in the top-20 for overall business environment, which factors government commitment in attracting foreign investment, protecting private property rights and providing consistency in regulations.
And, perhaps surprisingly, Korea also missed out of the top-20 in IT infrastructure, which factors the level of broadband Internet access as well as hardware and software adoption in government, businesses and customers.
Switzerland, the U.S., and Canada were the top three in that category, while Asian economies Hong Kong, Singapore, Japan and Taiwan also made the top 20.