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ICT globalisation survey: UK's tops - 'cos we don't care who buys our firms

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Internet Security Threat Report 2014

The UK has topped an industry ranking of countries on ICT globalisation. But before PM David Cameron and co start patting themselves on the back, they should consider this stand-out performance is entirely down to the UK's willingness to sell its promising tech to the highest bidder rather than nurture it to maturity.

An Economist Intelligence Unit report, sponsored by Huawei, measured 20 countries on a variety of measures to construct the ICT Globalization Index. The report declared “The link between ICT globalisation and economic growth is strong.” The most economically developed countries also tended to be the most open.

So, it should be reassuring to the Reg’s UK readers that the country topped the charts, with an index of 69.6 out of a possible 100. The Netherlands took the number two spot, with 60.3; Germany was number three with 56; the US was number four on 53.3; while France rounded out the top five with 52.8.

However, the UK’s overall spot flattered its performance in individual segments. On openness to ICT trade it came in third at 58, while the Netherlands and China took the top spot with 68.8 and 68 respectively.

On the crucial issue of R&D globalisation, the UK came in eighth place, with 61.3, while Canada, the US, Australia, Taiwan and Japan all took scores in the 70s.

And on “overall strength of the IT environment", this sceptred Isle took third place, with a less-than-zingy 53.2

It was purely the UK’s willingness to countenance foreign ownership and investment of its tech assets which propelled it to the top spot overall. It garnered an incredible 91.7 out of a 100 on this measure. The Netherlands took the second spot with just 54.2. The US, that driver and beneficiary of globalisation, clocked in at fifth place, with 45.6 on the foreign ownership measure.

“It’s not so much [that the UK is] stronger than the others in R&D etc,” said the EIU’s Christopher Clague, with some understatement.

This was the first time that the EIU had carried out the exercise, so there are no comparisons. However, Clague declared that “ICT globalisation is at a crossroads”, so presumably it’s inconceivable that globalisation could go into reverse.

One contributor to this was the fact that benefits of ICT were not always immediately visible, for example the way ICT can underpin progress in sectors like health.

A more high-profile issue is concern over cyber security issues, whether real or feigned. These range from concern over allegations of state-sponsored cyber-attacks, such as those levelled at China, to the turmoil over the US’s alleged compromising of security and privacy detailed by Edward Snowden. All of these can easily be coupled to protectionist stances.

Clague identified persistent “tensions” between the political and economic classes over the role of ICT and further moves towards globalisation. Not surprisingly, the report noted that “foreign investment in the ICT sector is often a politically charged topic” (though clearly not in Britain) and added “cyber security can also be viewed as a modern version of the much older practice practice of invoking national-security reasons to protect and nurture domestic industries in the face of foreign competition.”

While economists generally saw the benefits of globalisation, “politicians take a different view”, he said, and have to “cover themselves”. This may take the form of a genuine effort to nurture home-grown solutions, or simply be kowtowing to populist sentiment.

But, presumably speaking from an economic standpoint, Clague said “We’ve seen the benefits” of globalisation. Right now, though, the view from the High Street and/or Downing Street might be rather different.

The full report can be read here. ®

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