The Best E-business Countries

W here is the best place to conduct e-business? Right here in the good ol' USA, according to a major study conducted by the Economist Intelligent Unit (EIU) and its subsidiary, Pyramid Research. New rankings highlight the importance of smart government policy in promoting e-business.

Dot-coms have become not-coms and the stock market has plummeted, so global e-business must be in trouble, too? Wrong! Just as far-sighted companies are pushing ahead with e-business initiatives, so are countries continuing to embrace the Internet as an ideal conduit to the global marketplace. For many, indeed, e-business represents a chance not only to connect with the rest of the world but also to catch up.

"E-readiness" represents the ability to which a country's business environment is conducive to Internet-based commercial opportunities. It takes in a wide range of factors, from the sophistication of the telecom infrastructure to the security of credit card transactions and the literacy of the population.

E-readiness rankings are useful not only for executives using the Internet to expand into new markets; they also provide an invaluable point of reference for the countries themselves. They are designed to give both national policy makers and information technology (IT) executives of multinational firms insight into the true market conditions for new Internet services around the world.

So just who is ahead in the e-business race? The U.S., predictably, comes in first. But, there are surprises elsewhere.

English-speaking countries are in the top four slots: Australia is second, followed by Great Britain and Canada. The Nordic countries claim four of the next five places thanks to sophisticated telecoms, high mobile-phone penetration and gadget-savvy populations.

Elsewhere, the ratings are not so clear-cut. Asia, as expected, is a study in contrasts, with standouts such as Singapore (7), Hong Kong (13) and Taiwan (tie for 16) and lagging countries like Vietnam (58) and Pakistan (60 - last place). Although countries in Eastern Europe and South America are in the middle of the rankings, Hungary (28) is far different from Ukraine (tie for 52) and Chile (29) is way ahead of Ecuador (tie for 50). Even Africa and the Middle East, where scores are generally low, boast aspiring digital economies such as South Africa (35) and Egypt (tie for 40).

While the exact rankings of various countries may differ, the general conclusions clearly indicate that North America, Northern Europe, Australia and Singapore are becoming the true leaders of the global e-commerce economy, and they are potentially the most valuable e-services markets.

There also are some surprises. Japan, despite its high-tech economy, languishes in 18th place, categorized as only a "contender" rather than an e-commerce leader.

"Their technological and economic progress is legion, yet it suffers from some underlying obstacles," said Pyramid's Denis McCauley. "Japan has some serious problems with connectivity, especially delivering broadband services and global content."

Meanwhile, the world's other major global powers, Russia and China, are way off the leadership scale in 42nd and 49th places, respectively. These shortfalls in potential might be partly the result of the dominance of the English language among the EIU rankings.

"It reinforces the view that the language of the global Internet is English," McCauley says. "Look at any Web site. If there are two languages, one of them is English."

The EIU report comes to three key conclusions:

- Liberal national policies on e-development and competition are paramount, especially in telecommunications. - Business agility trumps economic size and wealth. - Diversity is the global rule.

Which country ultimately will win the global battle for e-commerce supremacy? Global e-readiness rankings point the way for corporate executives using the Internet to expand into new markets. The challenge now is to focus international e-commerce investments where they will make the most difference.