India moves up to 44th in Global Index of IT competitiveness

Despite the economic slowdown having negatively impacted information technology (IT) companies worldwide, India has been able to move four notches up in the 2009 Global Index of IT Competitiveness, undertaken and issued by the Economist Intelligence Unit and sponsored by the Business Software Alliance (BSA).

In a similar exercise conducted annually by the World Economic Forum’s 2008-09 Networked Readiness Index, India was ranked 54 (out of 134 countries) — four positions down from 50 (out of 127 countries) in 2007-08, based on ICT-conducive environment, degree of preparation needed to use information and communication technology (ICT) and the actual use of ICT.

In the current survey, however, India has an overall score of 34.1, which assesses and compares the IT industry environments of 66 economies on parameters which include the R&D environment, business and legal environment and IT infrastructure.

The six factors, according to the report, that work together to create a sound environment for the IT sector comprise an ample supply of skilled workers, innovation-friendly culture, 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.

As for government leadership, the report highlighted that protectionism and support for ‘national champions’ will hinder recovery efforts and longer term sector competitiveness. So, governments must strike a balance between support that encourages industry growth and investment, and that which introduces unfair market practices and protectionism that can harm competitiveness.

“India has shown strong improvement in its overall IT competitiveness ranking, which is a very positive indicator of progress. The country has maintained its ability to develop strong talent and maintain a conducive business environment, which is reflective in the six drivers of competitiveness," said Keshav S Dhakad, Chair of the BSA India Committee.

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 and continues to have the advantage of human capital. However, the development of a sound IT infrastructure and enhancing the R&D environment in the country still remain areas needing strong improvement.

Within the Asia Pacific, India ranks amongst the top 10 countries, with the top three positions held by Australia, Singapore and Japan. “Robust IP protection and broadband penetration are some of the key concerns in the Asia Pacific region,” added Dhakad.