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.

Global Information Technology Report Summary Table The top spot went for the first time to Denmark, followed by Sweden.

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.

Global Information Technology Report Cover The Global Information Technology Report resource page is here and the rankings table is here in PDF format. There are several video clips of the contributors giving summaries.

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.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Anon says:

    There is no question that standardization has an influence on innovation, but, as a CS professor at a research university, it is not at all clear to me what the overall effect is. Standards enhance overall penetration of a given underlying general technology, but at the same time they stifle further developments.

    For example, the success of TCP/IP (over the European OSI protocols, I might add) contributed significantly to the development of the Internet and the WWW. On the other hand, it is that very success and entrenchment that make it difficult to switch to technically better protocols.

    From my level, innovation comes from getting three things right: (1) funding, (2) people, and (3) incentives. Standards have an effect, but are not a crucial one. Get the above three right, and we’ll work around any standardization issues, or we’ll focus our energies on emerging areas where the existing standards don’t stand in our way.

    And we are generally leery about top-down, committee-driven standards, and prefer bottom-up, usage-driven standards.

  2. Perry says:

    The survey is about technological infrastructure rather than innovativeness or competitiveness. Denmark and Switzerland are not on the map at all in technology development, and the most serious competitors on this front are the Koreans and also the Chinese (whose aggressiveness partially compensates their still-evident lack of leading-edge expertise).

  3. This appears to be a conclusion in search of a rationalization, with the conclusion being that state-managed activities (the EU model) are of course better than unfettered free markets (the Anglo-Saxon model). If this were even remoately true wouldn’t the brain drain from Europe to the US be reversing?

  4. Tom says:

    James

    Do not worry about this survey, once George Bush leaves office we will magically rise back up to the first position. Especially if a Democrat is in the White House.

  5. fuistemon says:

    Nice to see that Denmark is now the leader in integrating Microsoft and Cisco products so that its citizens can use Google and Amazon!

  6. Andy says:

    Do not worry about this survey, once George Bush leaves office we will magically rise back up to the first position. Especially if a Democrat is in the White House.

    The chances of this are fairly strong, stronger than the lame snark that the poster is trying to express in a sadly typical right wing manner.

    Besides the fact this this survey is largely about infrastructure, not research, W.’s administration has indeed defunded a lot of basic research at NSF, and a lot of the remaining research money has been directed to more applied science and/or “homeland defense” R&D.

    Of course, it’s easier to blame the MSM or Clinton or the Easter Bunny than to ask a scientist about such things.

  7. Tano says:

    How is it possible that “socialist” countries can establish environments more suitable to innovation than the US?

  8. JohnG says:

    Well if you have factors like “lack of government leadership in information technology” then of course socialist countries are going to get a bump up.