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European countries, including other Nordic nations Denmark and Iceland, occupy most of the top 10 spots
Sweden may be better known for cars and couches than computers, but when it comes to access to broadband and cellular networks, it's tops. The Scandinavian country leads the world in "technological readiness," according to the World Economic Forum.
To rank high on the list — one of 12 included in the WEF's annual Global Competitiveness Report — countries need to have tech-friendly government policies as well as high tech usage.
In the ranking, the WEF focuses on information and communication technologies (ICT), such as cellular connectivity and broadband Internet, noting that "ICT has evolved into the 'general-purpose technology' of our time … responsible for a large part of productivity increases."
Rankings are based on a combination of hard data from organizations like the International Telecommunications Union and responses to the WEF's Executive Opinion Survey on topics such as business adoption of technology and laws relating to ICT. About 11,000 business executives in 131 countries participate in the survey.
The technology index is designed to show which countries are adopting technology to become more productive (and thus more competitive). A country need not have actually invented these technologies, just made them widely available. The WEF measures invention skills separately in a complementary "innovation" index.
That paves the way for Sweden to excel. Though home to few ICT multinationals besides telecom supplier Ericsson, the country boasts high broadband Internet penetration and a business-friendly environment, says Dr. Irene Mia, a senior economist at the WEF. It's a formula that has kept Sweden at the top of the ranking for two years.
Nordic countries in general did well this year, with Iceland finishing second and Denmark fifth. Like Sweden, they benefit from government support of technology and a strong focus on education and innovation. Education is both a precondition and an enabler for leveraging technology, notes Mia. Both countries improved their showing this year — Iceland climbing from No. 4, Denmark from No. 10.
Canada failed to make the top 10, ranking 13th in the technological readiness category.
Switzerland (No. 3), the Netherlands (No. 4) and Luxembourg (No. 10) rounded out the strong European showing in the top 10. Switzerland stands out, says Mia, for ranking highly despite lackluster government support for ICT initiatives. Its success is driven by the efforts of businesses and individuals, she says.
Two Asian countries made the top 10: Hong Kong at No. 6 and South Korea at No. 7. In contrast to Switzerland, the Korean government champions ICT and has heavily subsidized broadband construction, notes the WEF. Hong Kong's rank—its highest ever—reflects its increasingly wired citizenry and government. It got a further boost from its business-friendly policies.
Near the bottom: the United States, which scored well in ICT usage, but rated poorly on regulatory issues. After dominating the tech index for years, the U.S. dropped to No. 5 in 2006, No. 8 in 2007 and is currently No. 9.
It's still doing better than Australia, Israel, Singapore and the U.K., which fell off the top-10 list this year.
The WEF isn't the only group seeking to measure countries' technological savvy. The Organisation for Economic Co-operation and Development (OECD) publishes an annual report on broadband growth and policies among its member countries. Leonard Waverman, a London Business School professor, heads a "Connectivity Scorecard" study that ranks 25 countries based on methodology similar to the WEF's. In the U.S., the Federal Communications Commission and the Information Technology & Innovation Foundation, a nonpartisan think tank, also try to quantify technology use.
Mia says the WEF encourages these studies and recently began gathering experts from other organizations to discuss the gathering of ICT statistics.
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