A study commissioned by the Business Software Alliance, “The means to compete: Benchmarking IT industry competitiveness”, and conducted by Economist Intelligence Unit from November to April this year and scored more than 60 countries on a scale of one to 100 for factors such as a country's business environment, innovation, technology infrastructure, legal framework and government support.

Topping the list was the US in first place with the most positive environment for IT firms in the world followed by Japan, with South Korea coming in third trailed by the UK in fourth place. The survey found that countries with a skills-rich labor force were more likely to move up the rank in competitiveness, as all but four out of the top 22 countries in the competitiveness index are also among the world's top countries in terms of IT labor productivity.

"There is a strong link between the presence of IT industry competitiveness enablers in the countries and the strength of their IT sector," Nash said. "Governments and industry leaders must pay close attention to these enablers if they wish to boost the global competitiveness of their IT industries."
The study also noted that China and India are among the few countries with IT sectors that can compensate for major weaknesses in their business environment due to unique factors, such as workforce size and low wages. Nonetheless, they will need to pay attention and improve on their competitiveness enablers, as their cost advantages will erode and greater innovation will be required of their IT.