Second Annual Study Ranks Canada High in Human Capital Development, Lower
on Intellectual Property Protection
TORONTO, Sept. 16 /CNW/ - A new study conducted by the Economist
Intelligence Unit and sponsored by the Business Software Alliance finds Canada
ranks sixth in the world in IT industry competitiveness, moving three places
from its 2007 ranking of nine. Despite high scores in the areas of IT
infrastructure and development of human capital, the study also found Canada
lags behind other countries including Australia, Germany and the U.K. when it
comes to fostering a legal environment for stronger intellectual property
Now in its second year, the IT Competitiveness Index assesses and
compares the information technology (IT) industry environments of 66 countries
worldwide to determine the extent to which they possess the conditions
necessary to support a strong and competitive IT industry. Although the top 20
economies remain the same from one year ago, nine countries moved up and 11
went down in the rankings. Canada ranks sixth in the overall index, with the
top five spots going to the U.S., Taiwan, UK, Sweden and Denmark.
"Canada's rise to a higher spot on the index shows that a country's IT
competitiveness can improve significantly in a short period of time," said
Michael Murphy, Chairman of the BSA Canada Committee. "The ability of local
governments and IT industries to deliver jobs and a better quality of life
through information technology is strongly affected by how they handle key
drivers of competitiveness. While it's encouraging to see Canada ranks
relatively high overall in IT competitiveness, the study shows more can be
done to improve the country's legal environment for the IT industry, which
would help address concerns around intellectual property rights."
The study findings were calculated based on six distinct factors, or "IT
competitiveness enablers," which create a sound environment for the IT sector,
including: an ample supply of skills; an innovation-friendly culture;
world-class technology infrastructure; a robust legal regime that protects
intellectual property, such as patents and copyrights; an open, competitive
economy; and government leadership that strikes the right balance between
promoting technology and allowing market forces to work. Countries that
perform well in these areas generally are home to high-performance IT
industries. High performing IT sectors directly contribute more than 5% to the
gross domestic product of most advanced nations and also drive momentum in the
wider economy by helping organizations and workers to be more efficient and
Canada's sixth place on the index is based on its performance in the
- Canada is among the leaders in the category of IT communications and
infrastructure, third only after the U.S. and Switzerland by virtue
of widespread Internet adoption and strong IT spending by businesses
and consumers, resulting in high levels of computer penetration (87
for every 100 people).
- Well educated workers and high regarded universities moved Canada up
three spots to number eight in the category of human capital,
slightly behind the UK (3), South Korea (5) and Australia (6), but
well ahead of other G8 countries including Italy (17), France (22)
and Germany (24).
- A higher software piracy rate than other Western countries (33 per
cent in 2007) place Canada's legal environment for the IT industry
13th in the world this year, well behind Australia (2), Germany (6)
and France (12).
- With a low-risk operating environment and open economy, Canada ranks
14th in the world for the overall attractiveness of its prevailing
and forecast business environment. However, high corporate tax rates
and a high level of dependency on the U.S. economic trends place
Canada behind countries including the UK (5), Australia (7) and
- Canada's environment for research and development ranked 18th in the
world, with private sector spending on R&D relatively low compared to
- In the category of government support for IT industry development,
Canada ranks fourth, equal to the U.S. and slightly ahead of
Australia (6), for fostering an environment whereby investment
capital is readily available to IT industry and other entrepreneurs.
"There is a strong link between the presence of IT competitiveness
enablers and the strength of local technology economies," confirms Denis
McCauley, Director, Global Technology Research with the Economist Intelligence
Unit. "Governments and industry leaders must pay close attention to these
factors if they want to reap the benefits of a globally competitive IT
Other findings of the research include:
- Investing in people is mission-critical for domestic IT industries.
Sourcing talent will be among the toughest challenges IT producers
will face in the coming years.
- Competitive broadband markets help cultivate strong IT sectors.
Without fast, reliable, and secure Internet access, technology firms
cannot interact effectively with partners and the research community,
nor can they sell their services online.
- A legal environment that protects intellectual property rights (IPR)
and takes a robust approach to cybercrime is essential. The US,
Australia and Western European countries have the most effective
systems in place to address IP protection and cybercrime, but gradual
improvements are also evident in tough places like China.
- Globalization and the Internet will 'liberate' R&D. Ecosystems,
online or otherwise, that bring together talent, technology, venture
capital, and good universities, supported by a risk-taking ethos,
will be the best incubators of innovation.
For more information on the index results and methodology, see "How
technology sectors grow: Benchmarking IT industry competitiveness 2008,"
available at www.eiu.com or www.bsa.org/globalindex.
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The
Economist Group, publisher of The Economist. Through our global network of
over 650 analysts, we continuously assess and forecast political, economic and
business conditions in 200 countries. As the world's leading provider of
country intelligence, we help executives make better business decisions by
providing timely, reliable and impartial analysis on worldwide market trends
and business strategies.
The Business Software Alliance is the foremost organization dedicated to
promoting a safe and legal digital world. BSA is the voice of the world's
commercial software industry and its hardware partners before governments and
in the international marketplace. Its members represent the fastest growing
industry in the world. Working with its partners in Canada and other countries
worldwide, BSA educates consumers on software management and copyright
protection, cyber security, trade, e-commerce and other Internet-related
issues. BSA member companies in Canada include Adobe Systems, Apple, Autodesk,
Avid, Bentley Systems, Borland, CNC Software/Mastercam, Microsoft, Mindjet,
McAfee, Monotype Imaging, PTC, Siemens PLM, SolidWorks, Sybase, Symantec, and
Company names herein may be trademarks of their respective owners.
For further information:
For further information: Melita Vega, Hill & Knowlton, for BSA, (416)