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Daily Dutch News in English

Netherlands drops in IT competitiveness ranking

The Netherlands has dropped to number 10 from 5, in terms of information technology (IT) competitiveness globally, according to the 2011 IT industry competitiveness index.

The drop for the Netherlands is due to the limited focus on innovation and research.

The U.S. remains the world’s most competitive nation for information technology companies, while the country’s IT infrastructure still ranks behind other nations, according to a study.

The IT Industry Competitiveness Index benchmarks 66 countries on a series of indicators covering the critical foundation areas for IT innovation; overall business environment, IT infrastructure, human capital, research and development (R&D), legal environment, and public support for industry development.

This year’s index finds that countries traditionally strong in IT are maintaining their positions of leadership in part because advantage begets advantage— they have built up solid foundations for technology innovation through years of investment, and they are continuing to reap the benefits. But the global field of competition is becoming more crowded as new challengers, especially in developing economies, raise their games to meet the standards the leaders have set.

India and China currently lie mid-rankings but both countries have gained ground in the Index since its inception. Having built competitive IT industries in the services and manufacturing sectors, both countries face a threat to their low-cost labour advantage as wages rise and commoditising businesses move to other emerging markets. As innovation gathers pace, the enforcement of intellectual property rights is likely to improve.

Europe continues to look attractive in terms of IT infrastructure and the legal environment, among other factors. However, the continent is failing to keep pace with other regions when it comes to human capital with suggestions rigid labour market regulations and a poor climate for investment in next generation broadband networks could slow the development of the IT sector in the future.