The UK is amongst the strongest global environments for IT competitiveness, according to new research by the Economist Intelligence Unit (EIU).

The EIU’s IT industry competitiveness index ranks countries according to factors including skills, innovation, technology infrastructure, legal framework and government support as well as a competition-friendly business environment.

The UK was ranked fourth behind South Korea and Japan with the US topping the index on the strength of its combination of scale and quality in the key areas that promote IT competitiveness.

The report claims to be the first attempt to compare countries' performance in building an environment for IT industry competitiveness; 64 countries are covered across seven regions.

Only four of the top 22 countries in the EIU index are not among the world's top countries in terms of IT labour productivity.

Chief among the challenges to remaining competitive are ensuring a steady supply of talent for the industry, and securing the right level of support from government to promote competition and innovation, says the report.

EUI global technology researcher Denis McCauley notes a strong link between the presence of IT industry competitiveness enablers in countries and the strength of their IT sector.

‘Governments and industry leaders must pay close attention to these enablers if they wish to boost the global competitiveness of their IT industries,’ he said.

The report also finds that in most cases IT sector success cannot compensate for major environmental weaknesses. India and China have been able to use workforce size and low wages so far but need to improve the business environment as their cost advantage decreases.

Also, the IT skills gap will grow unless educational systems adjust training curricula, because IT skills requirements are radically changing. IT employees require project and change management skills as well as business analysis and communication skills.
The report finds future competition to the skills availability of India and China will include emerging markets such as Russia, Brazil, Malaysia and Vietnam, all of which are likely to carve niches in software development and services.

A country’s legal regime is an important differentiator according to the report. The US and Western Europe lead in the degree of protection afforded and in enforcement.