US is the world’s best market for IT firms

US is considered the best market for IT firms to do business

The US is the best market for IT firms to operate in despite growing protectionism worldwide, according to research from the Economist Intelligence Unit.

According to the study, which looked at 66 countries, “buy local” policies adopted by some nations fail to recognise the global nature of the IT industry and hamper the development of promising IT firms as well as the long-term growth prospects for the sector.

"Rather than pushing short-term measures designed to expand sector output or support ailing technology firms, policy-makers need to remain focused on strengthening the fundamental enablers of long-term sector competitiveness," said the director of global technology research at the Economist Intelligence Unit, Denis McCauley.

The survey suggests that, despite the increasing protectionism, the US ranks first in terms of IT industry competitiveness this year, followed by Canada and European countries such as Finland, Sweden and the Netherlands.

Benefits seen in the IT environment in the US include a highly developed and widely accessible IT infrastructure and strong support for technology research and development, says the study.

The development of high-quality technology talent ensured by a constantly developing educational environment is another attraction.

On the skills aspect, the report maintains that while the recession has eased competition for talent, the fight for highly-skilled staff will resume once economies recover, so co-ordinated efforts among governments, universities and IT firms are needed to improve the quality of technology training.

“In Europe and North America, governments must work with companies to encourage more young people to choose mathematics and science-based subjects at universities,” it adds.

According to the study, while emerging markets such as Russia, China and India offer large pools of skilled manpower, under-developed areas such as IT infrastructure – deemed essential as more IT services and applications are delivered over the web – are hindering their IT sector competitiveness.

Another area of focus in the report is the need for robust intellectual property (IP) protection, which is strong in most developed markets, while progress is “slow but steady” in emerging economies such as Brazil, Egypt and Vietnam.

“As innovation gradually becomes more important than low-cost labour to IT firms in China and India, IP enforcement is expected to improve in these countries as well,” says the report.