Report: Key Nations Not Ready for New Economy

Unless certain key countries take steps to improve their "E-Readiness," world economic expansion will stagnate, according to a report released Tuesday by global policy and technology consulting firm McConnell International.

The report, "Risk E-Business: Seizing the Opportunity of Global E-Readiness," rates the e-readiness -- defined as the capacity to participate in the global digital economy -- of 42 critical economies. The report concluded that 23 of them, including China, Indonesia and South Africa, require substantial improvement in at least two significant areas before e-business and e-government will flourish.

"The networked world is under construction," said Bruce W. McConnell, president of the Washington, D.C.-based firm. "Smart companies will get in on the ground floor, but they should wear hard hats. The foundations are still unfinished. Many countries have not yet created the conditions that permit full participation in the digital economy."

McConnell International chose countries that it felt represented the source of the next phase of world economic growth. The selected nations comprise nearly three-quarters of the world's population and a quarter of the world's gross domestic product.

Connectivity is Key

According to the study, full participation in the new economy requires the availability of both wired and wireless communication services, affordable and reliable network access, and an underlying infrastructure that supports business-critical computer operations.

Few of the economies assessed have the infrastructure necessary to be full participants in the Web community. Twenty-five countries -- including Egypt, Russia, China, India and Mexico -- require substantial improvement in their connectivity.

"The broad benefits of e-business and e-government will not be available without substantial investments in infrastructure," the report warned. "Critical to that climate, and to affordable communications service, is the ability to compete."

Conditions are marginally better in the remaining 17 countries rated, with 11 already demonstrating improvement.

E-Leadership Critical

The survey also found a need in most countries for stronger e-leadership. More government and industry pacesetters that will take their countries more quickly into the new economy must emerge, the study said.

"The technology permits countries to leap from the old to the new economy," McConnell said. "But if the gulfs between aspirations and accomplishments widen much more, it will be hard to make that leap. E-business will thrive in the countries that take the proven steps to progress."

One country that has made great strides in e-leadership is Estonia, which the survey says has benefited greatly from a close relationship with its Scandinavian neighbors. Twenty-eight percent of the country's citizens are currently online, a number that should rise due to a proposal approved in February by the Estonian Parliament that guarantees Internet access, just as any other constitutional right, to all citizens.

Where the Need is Greatest

Of the four regions surveyed -- the Americas, Asia, Central and Eastern Europe, and the Middle East/Africa -- the Middle East/Africa presents the greatest challenge to e-business.

The biggest obstacle is the region's thin infrastructure, which the survey says remains an "enormous barrier to improvements in other areas." The African continent is home to nearly 15 percent of the world's population, but possesses just two percent of the world's total number of telephones and less than 0.1 percent of all Internet users.

Some governments within the region have started to realize that they need to hop on the Internet bandwagon if they want to bring prosperity to their nations. One of the earliest to realize the potential of the Internet was Ghana, which in 1994 was the first West African nation to connect to the Internet.

Ghana has recently connected to two public-private sector projects designed to link key government ministries and agencies using a wide area network. If the plan works, it could create a model for Ghana's sub-Saharan neighbors.

McConnell International currently manages the United Nations-sponsored Information Technology Coordination project.