Where's the best place to do e-business?

It's comes as no surprise that the US has the world's most prepared economy for "e-business", but a new set of global rankings grading 60 of the world's nations on their ability to facilitate e-commerce offers some unexpected ratings further down, including Australia at 16th position.

Of the 60 countries covered by the Economist Intelligence Unit (EIU), Australia beat its biggest trading partners Japan (21st), South Korea (24th), and others in the region including Malaysia (32nd), Indonesia (38th) and China (51st), while, three compact economies - Sweden (2nd), Finland (3rd) and Norway (4th) - cluster just behind the US. While some Australians have been particularly incensed to find their country ranked lower than many western European countries, there were queries as well from the UK, which ranks 6th out of 60, but ahead of its largest EU partners (Germany at 13th, France at 14th, and Italy at 19th).

This suggests e-business needs a large or robust economy to flourish, but the true explanation lies in the study's methodology, which gives as much weight to "connectivity" - telecomms infrastructure, and the ease and cost of accessing the Internet - as it does to the general business environment. This approach leaves Australia, for instance, looking slightly less "e-business-ready" than the ultra-connected trio of Sweden, Finland and Norway.

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. Companies looking to realise the global promise of the Internet and enter far-flung markets can judge from a country's ranking how easy that move is likely to be.

In evaluating the general business environment, the EIU screened 70 different indicators covering criteria such as economic strength, political stability, regulatory climate, taxation policies and openness to trade and investment. The resulting "business environment rankings" measure the expected attractiveness of the general business environment over the next five years.

The resulting rankings offer the best proxy now available to judge a country's relative preparedness for the Internet era, claims the EIU. They suggest some mind-clearing conclusions:

* It is simplistic to say that the Internet is a borderless network and lets businesses instantly go global. The rankings show a huge range among countries in the conditions for e-business. Companies ignore these differences at their peril.

* Size isn't everything. Some very big countries - China, Indonesia, India, Russia - come far down the e-business-readiness league table. This does not mean that there are no opportunities for doing e-business there. In such large markets, there are almost bound to be pockets of e-promise: take India's software industry. Yet India's 50th place in the rankings is a reminder of the backwardness, red tape, power outages and poor telecomms infrastructure in the country as a whole.

* Connectivity counts. It's the high rating for connectivity that catapults the Nordic countries up the ratings. This conclusion underlines the urgency of telecomms deregulation and, in many cases, the need for significant sums of foreign investment in countries lower down the rankings list.

Global rankings

1 US

2 Sweden

3 Finland

4 Norway

5 The Netherlands

6 UK

7 Canada

8 Singapore

9 Hong Kong

10 Switzerland

11 Ireland

12 Denmark

13 Germany

14 France

15 Belgium

16 Australia

17 New Zealand

18 Austria

19 Italy

20 Israel

21 Japan

22 Spain

23 Chile

24 South Korea

25 Portugal

26 Argentina

27 Taiwan

28 Thailand

29 Poland

30 Hungary

31 Czech Republic

32 Malaysia

33 Greece

34 Mexico

35 Brazil

36 South Africa

37 Slovakia

38 Indonesia

39 Turkey

40 Saudi Arabia

41 Bulgaria

42 Venezuela

43 Romania

44 Russia

45 Ukraine

46 Philippines

47 Peru

48 Colombia

49 Egypt

50 India

51 China

52 Sri Lanka

53 Ecuador

54 Vietnam

55 Pakistan

56 Kazakhstan

57 Algeria

58 Iran

59 Nigeria

60 Iraq

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