UK IT sector becoming less competitive

Flying the flag for UK IT

The UK IT industry has dropped from third to sixth in a league table of IT industry competitiveness.

Despite this, the annual research by the Economist Intelligence Unit (EIU) shows that the UK remains well ahead of other major European economies France (17th up from 20th), Germany (20th down from 19th) and Italy (24th, up from 25th) in the state of its IT sector.

The US retains the top spot as the most globally competitive IT industry, followed by Finland, Sweden, Canada and, leaping up from 10th to 5th, The Netherlands.

"Globally, the IT sector has ridden out the crisis reasonably well, despite reduced technology spending" said Denis McCauley, EIU director of Global Technology Research.

"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."

The study shows that countries with well developed broadband networks have an advantage in their tech sector. It also says that while the recession has eased skills shortages worldwide, a lack of IT talent will remain a problem and countries need to invest in skills development.

“IT offers productivity and efficiency gains that benefit nearly every segment of every economy. Support for the long-term development of a competitive IT sector can accelerate the economic recovery and lay a foundation for the technology solutions of the future," said Robert Holleyman, chief executive of the Business Software Alliance, which sponsored the report.