U.S. Leadership in IT Industry is Growing, Even in Tough Economic Environment

U.S. facing intense competition from several foreign markets

WASHINGTON, Sept. 17 /PRNewswire-USNewswire/ -- The Economist Intelligence
Unit's annual study, sponsored by the Business Software Alliance (BSA),
reveals that countries in Asia, Latin America and Europe are taking deliberate
steps to improve their technology environments, although the U.S. remains the
leader in providing the most competitive conditions for the information
technology (IT) industry.

The United States still ranks first in the world in the annual IT Industry
Competitiveness Index, which was conducted by the Economist Intelligence Unit,
the business information arm of The Economist Group. The United States scored
a 78.9 out a possible 100 in the index. However, the U.S. lost ground to
competitors in a number of areas, while Finland jumped from 13 in the 2008
rankings to number two in 2009 and surpassed the United States in the quality
of its business environment.

The study, now in its third year, assesses and compares the IT industry
environments of 66 economies to determine the extent to which they enable IT
sector competitiveness. The ten highest-ranked countries in the 2009 study are
the U.S., Finland, Sweden, Canada, Netherlands, United Kingdom, Australia,
Denmark, Singapore, and Norway.

Two countries in the top 20 on the 2009 index showed significant advances:
Finland and the Netherlands. Finland, ranked 13th in 2008, moved into second
place based on its strong performance in the research and development
category, particularly patents. The Netherlands, ranked 10th in 2008, moved to
fifth place based on its strong infrastructure, primarily resulting from
pervasive broadband deployment.

Robert Holleyman, president and CEO of the BSA, notes that even amidst the
current economic turmoil the strength of the IT industry in the U.S. and
abroad remains strong. "Even in today's uncertain economic climate, the long
term prospects of the IT industry remain competitive," Holleyman said. "The
fact that the U.S. tech sector is helping to lead the way to recovery is a
testament to the importance of technology to both industry and consumers and a
telling indication of what will drive our economic growth in the long term,
making it even more important for our policymakers to create the right
environment for competition and innovation.

"The report also identified some of the key challenges that the U.S. faces in
its efforts to retain its leadership position," continued Holleyman. "In
particular, we need to improve our IT infrastructure by invigorating broadband
deployment, develop technology-neutral IT policies, avoid the siren call of
protectionist market practices, and expand access to highly qualified,
technically proficient employees to invent, design, and produce complex and
innovative products."

Six Key Competitiveness Enablers

According to the Economist Intelligence Unit, six factors combine to create a
sound environment for the IT sector, including an ample supply of high-skilled
workers; an innovation-friendly culture that supports R&D; world-class
technology infrastructure; a robust legal environment that protects
intellectual property (IP) such as patents and copyrights; an open,
competitive business environment; and government leadership that strikes the
right balance between promoting technology and allowing market forces to work.

"Globally, the IT sector has ridden out the crisis reasonably well, despite
reduced technology spending," says Denis McCauley, director of global
technology research with the Economist Intelligence Unit. "Rather than pushing
short-term measures designed to boost sector output or support ailing IT
producers, policymakers need to remain focused on strengthening the
fundamental enablers of long-term sector competitiveness."

According to the study, the United States combines breadth and depth in the
six competitiveness categories, with special strengths in the quality of its
IP protection laws, business environment, and its highly-educated workforce.
However, the report also highlights areas where U.S. global leadership is
challenged, including:

-- Infrastructure: The U.S. was ranked 7th in the world this year, down
from 2th last year. Despite having strong PC penetration -- the U.S.
has
an estimated 86 desktop and laptop computers for every 100 people --
broadband connectivity is moderate. Some parts of the country need
better access to high-speed networks -- an issue that is being
addressed
by the economic stimulus bill approved earlier this year.
-- Workforce: Technology firms in the United States have a strong demand
for highly skilled talent. Immigration policies in the U.S. have
tightened due to security concerns, which constrain the flow of
talent.
Immigration restrictions on skilled workers should be eased or the
U.S.
could lose its attractiveness as a destination for talent from abroad.

-- Openness: The U.S. economy is in the midst of a recession and must
avoid
embracing "America first" policies that limit global access to
the market and invite reciprocal limitations by our trading partners.
U.S. policymakers should strive to open markets and protect
intellectual
property at home and abroad.

Other key findings of the research include:

-- Despite economic turmoil, the IT industry in the U.S. remains strong,
even in the midst of an economic recession. Many governments around
the
world view the IT sectors as an important engine of economic growth,
and
many are taking measures to stimulate sector output as a means of
accelerating economic recovery.
-- Robust intellectual property protection remains essential to IT sector
competitiveness. The top ten countries in this year's index all
have strong intellectual property protection that enable their IT
industries to flourish.
-- A strong approach to cyber security is essential for economic and
technological advancement. Cyber criminals are international threats
that are becoming more advanced. A public-private partnership is
essential to thwart cyber crime. Governments should ensure that steps
to
secure cyberspace are taken without placing mandates on technology.
-- Protectionism will hinder economic recovery efforts worldwide. The IT
industry is a global industry and "buy local" provisions are
slowing the global marketplace. Governments must avoid the siren call
of
protectionist market practices that will only hinder recovery and harm
long-term sector competitiveness.

-- Broadband networks are becoming essential to nations'
competitiveness. The importance of broadband continues to grow as more
IT services and applications are delivered over the Internet.
Broadband-rich countries in Western Europe, North American, and
developed Asia are at an advantage. Conversely, the slow march of
broadband in emerging markets, including those with large IT sectors
such as India, Brazil, and Russia, could impede their IT industry
growth.

Top 20 countries in IT competitiveness
--------------------------------------
Country Score 2009 Rank 2008 Rank
------- ----- --------- ---------
United States 78.9 1 1
------------- ---- - -
Finland 73.6 2 13
------- ---- - --
Sweden 71.5 4 6
------ ---- - -
Canada 71.3 4 6
------ ---- - -
Netherlands 70.7 5 10
----------- ---- - --
United Kingdom 70.2 6 3
-------------- ---- - -
Australia 68.7 7 7
--------- ---- - -
Denmark 68.6 8 5
------- ---- - -
Singapore 68.2 9 9
--------- ---- - -
Norway 67.1 10 14
------ ---- -- --
Ireland 66.9 11 15
------- ---- -- --
Japan 65.1 12 12
----- ---- -- --
Israel 64.3 13 16
------ ---- -- --
Switzerland 63.5 14 11
----------- ---- -- --
Taiwan 63.4 15 2
------ ---- -- -
South Korea 62.7 16 8
----------- ---- -- -
France 59.2 17 20
------ ---- -- --
Belgium 59.2 18 22
------- ---- -- --
New Zealand 58.8 19 17
----------- ---- -- --
Germany 58.1 20 19
------- ---- -- --

Source: Resilience amid turmoil: Benchmarking IT industry competitiveness
2009, is available free of charge at www.bsa.org/globalindex

For further information please contact:

Business Software Alliance
Americas: Lars Anderson, +1-202-346-8811 or Amos Snead, +1-202-346-8831 or
media@bsa.org.

Economist Intelligence Unit
Denis McCauley: +44 (0)20 7576 8237 or denismccauley@eiu.com

About the Business Software Alliance
The Business Software Alliance (www.bsa.org) is the voice of the world's
commercial software industry and its hardware partners before governments and
in the international marketplace. BSA members include Adobe, Apple, Autodesk,
Bentley Systems, CA, Cadence, Cisco Systems, Corel, CyberLink, Dassault
Systemes SolidWorks Corporation, Dell, Embarcadero, HP, IBM, Intel, Intuit,
McAfee, Microsoft, Minitab, Quark, Quest Software, Rosetta Stone, SAP,
Siemens, Sybase, Symantec, and The MathWorks.

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.

SOURCE Business Software Alliance

Lars Anderson of Business Software Alliance, +1-202-346-8811, media@bsa.org