Study: E-Commerce Flourishing in Northern Europe

Silicon Valley is still the epicenter of the digital explosion and the United States remains the world leader in e-commerce, but Sweden and other northern european countries lead the rest of the world, according to two new surveys.

The Economist Intelligence Unit (EIU), a firm that conducts industry analyses, ranked the top 60 countries in the world in terms of readiness for conducting e-business.

The EIU survey examined the “connectivity” factor in combination with various economic factors, including the strength of the economy, political stability, and regulatory, tax and trade policies. The connectivity factor is based on a quantitative and qualitative assessment of a particular country’s communications infrastructure.

The five countries most prepared for e-commerce, according to the survey, are the United States, Sweden, Finland, Norway and the Netherlands, in that order. The United Kingdom, Canada, Singapore, Hong Kong and Switzerland ranked in the number six through ten slots.

The United Kingdom’s largest partners in the European Union placed relatively low on the list: Germany came in 13th, France placed 14th and Italy ranked 19th. Surprisingly, Japan placed 21st, while India and China ranked 50th and 51st respectively.

“E-business needs more than a large or robust economy to flourish,” the study said. “Connectivity, or the readiness of the communications infrastructure to handle Internet traffic, is also vital.”

Third World Gap

Third-world countries in Africa, the Middle East and Asia dominated the lower rankings. The bottom 10 of the 60 countries studied were China, Sri Lanka, Ecuador, Vietnam, Pakistan, Kazakhstan, Algeria, Iran, Nigeria and Iraq.

“Countries at the top of the league stand to reap the benefits from the new networked economy, while those at the bottom will struggle to compete in the digital age,” the study concluded. “Companies looking to realize the global promise of the Internet and enter far-flung markets can judge from a country’s position in the rankings how easy that move is likely to be.”

The EIU, an arm of The Economist Group, published the results in its EIU ebusiness forum, a site sponsored by such high-tech companies as Bain & Company, Baker & McKenzie, Cambridge Technology Partners, Cap Gemini, Dell Computer, Deutsche Bank, Intel and Oracle.

Digital Geography

Sweden’s Internet economy also ranked high in a recent study conducted by Wired magazine. In its July issue, the magazine presents a list of the 46 locations “that matter the most in the new digital geography.”

Stockholm, Sweden is ranked the third “most influential high-tech hub” in the world, behind Northern California’s Silicon Valley and Boston, Massachusetts.

The magazine used several criteria, including the ability of nearby universities and research centers to train workers and develop new technology, the presence of established companies to provide expertise and economic stability, the population’s “entrepreneurial drive to start new ventures,” and the availability of venture capital in the country.

According to Wired, venture capital funding reached $3 billion (US$) in Boston in 1999, second only to Silicon Valley.

Israel and North Carolina

Israel came in number four on the Wired list because it is “one of the fastest growing high-tech centers in the world, boasting a $99 billion economy and managing $1 billion in venture capital last year,” the magazine said.

The Raleigh-Durham-Chapel Hill area of North Carolina — where North Carolina State, the University of North Carolina and Duke spend more than $600 million a year on research and development — came in fifth. Rounding out the Wired top ten were London, England; Helsinki, Finland; Austin, Texas; Bangalora, India, and San Francisco, California.

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