U.S. Ranked 7th in Technological Innovation
A new report has dropped the U.S. to 7th place in world rankings for technological innovating,
The US has lost its position as the world’s primary engine of technology innovation, according to a report by the World Economic Forum. The US is now ranked seventh in the body’s league table measuring the impact of technology on the development of nations. A deterioration of the political and regulatory environment in the US prompted the fall, the report said.
Countries were judged on technological advancements in general business, the infrastructure available and the extent to which government policy creates a framework necessary for economic development and increased competitiveness. The Networked Readiness Index, the sixth of its kind published by the World Economic Forum with Insead, the Paris-based business school, scrutinised progress in 122 economies worldwide.
Despite losing its top position, the US still maintained a strong focus on innovation, driven by one of the world’s best tertiary education systems and its high degree of co-operation with industry, the report said. The country’s efficient market environment, conducive to the availability of venture capital, and the sophistication of financial markets, was also given recognition.
Denmark is now regarded as the world leader in technological innovation and application, with its Nordic neighbours Sweden, Finland and Norway claiming second, fourth and 10th place respectively. “Denmark, in particular, has benefited from the very effective government e-leadership, reflected in early liberalisation of the telecommunications sector, a first-rate regulatory environment and large availability of e-government services,” said Irene Mia, senior economist at World Economic Forum.
AP reports that the study, which ranked the United States number one in the previous six editions, attributed the fall mostly to “increased political and corporate interference in the judicial system” and “also cited the United States’ low rate of mobile telephone usage, a lack of government leadership in information technology and the low quality of math and science education.”
Foreign Policy‘s Christine Chen responds,
Remember a few years back, when European and Asian countries were developing their third-generation (3G) technologies for mobile phones, which were leaps and bounds ahead of the U.S.? The United States is still playing catch-up. It seem that allowing market forces to run amok may not always result in the best technology. A more regulated environment for mobile technology in Europe and Asia allows for more unity in technological advances, whereas in the United States, competing standards can cause logjams. The same logic applies to some other aspects of IT as well, such as broadband penetration. It turns out government involvement can be a good thing, if it’s efficient and well-informed.
But how does one know whether “it’s efficient and well-informed”? Indeed, how often does anything government does meet that standard? Further, a government-imposed standard may well be more efficient in the short run–multiple standards are undeniably messy–it by definition disincentivizes innovation. It’s quite possible, even likely, that the end result of competition will be a much better product.
While it may well be that there are six countries that have a more conducive environment for technology that the U.S.–and certainly places like Denmark, Sweden, and Finland strike me as reasonable competitors in that regard–I’m highly dubious of a methodology that could have us fall six places in one year. Certainly, our educational system has not collapsed in that time span, let alone enough to have had an impact on the technology industry.