Croatia 54th in global competitiveness rankings in the use of information and communications technologies

ZAGREB, 15 April 2015 – The National Competitiveness Council today published the results of the most recent research of the World Economic Forum (WEF) on information technology. According to the results, Croatia is in 54th place out of 143 countries in its competitiveness in the use of information and communications technologies (ICT). This ranking is a drop of eight places from its position in 2014.

The Global Information Technology Report 2015 shows that emerging and developing economies are not successfully using the potential of ICT to initiate social and economic changes and to catch up with the development of advanced countries. The report emphasizes the ever greater gap between countries that use the Internet in their economic and social milieu and those that are not using the potential of ICT. This year’s report highlights the extremely high correlation between the use of ICT by individuals, companies, and government and the ability to enhance its social and economic impacts. It also emphasized the importance of government leadership in creating a good regulatory and business environment with a competitive ICT market as a fundamental condition for all countries.

The report provides a comprehensive and reliable evaluation of the influence of ICT on the competitiveness of a country and the living standards of its citizens. The Network Readiness Index relies on six principles:

  1. A quality regulatory and business environment, which is important for taking advantage of ICT and its effects.
    2. ICT readiness measured by the availability of ICT, skills and infrastructure as prerequisites for achieving its effects.
    3. Broad social engagement of all stakeholders enables the complete effect of ICT – government, the business sector and citizens.
    4. The use of ICT should not be a goal in itself. The impact that the use of ICT has on the economy and society in general is important.
    5. The established promoters of development – the environment, readiness, the level of development and the use of ICT – by their interaction make a greater impact on the economy. A greater impact creates a greater stimulus for countries to improve the general conditions and readiness to use ICT, by which a development cycle is created.
    6. A framework of network readiness gives clear guidelines for the required policies.

“We cannot be satisfied with Croatia’s overall ranking, concern encourages a negative trend. The significant fall in the rankings is a consequence of an absence of systematic solutions. We again have to state that the influence of the environment is important, and it is not being changed by the required reforms. The time has come for us to act in that direction. If we do not, we will continue to fall behind the more advanced countries of the world,” stated Ivica Mudrinić, President of the National Competitiveness Council.

Like last year, Singapore, Finland, Sweden, the Netherlands, Norway and Switzerland are the leading countries in the world in their readiness to use ICT. Japan registered a significant shift of six places. Hong Kong and South Korea fell from eighth to 14th place and from 20th to 12th place, respectively.

  Rank 2012 Rank

2013

Rank

2014

Rank

2015

Singapore 2 2 2 1
Finland 3 1 1 2
Sweden 1 3 3 3
Netherlands 6 4 4 4
Norway 7 5 5 5
Switzerland 5 6 6 6
USA 8 9 7 7
United Kingdom 10 7 9 8
Luxembourg 21 16 11 9
Japan 18 21 16 10

The advancement of new markets in the use of ICT is disappointing. The Russian Federation is the highest ranked of the BRIC countries in 41st place. It is followed by China (62nd), which maintained its position from last year, while the other countries fell considerably in the rankings. South Africa dropped five positions to 75th place; Brazil is in 84th place, which is a decline of 14 places, and India is in 89th place after losing six places.

Of the Central European countries, Slovakia (59th) held its position from last year and Poland (50th) rose four places, while Slovenia (37th) and the Czech Republic (43th) fell one place and Hungary (63rd) fell six places.

The position of Croatia

This year, Croatia registered a decline in the rankings from 46th to 54th place, which places it among medium-developed countries. Its average score of 4.3 is at the same level as last year and shows that we are standing still and not doing enough in the segments for reforms, encouraging innovation, and the computerization of public administration.

Source:  Global Information Technology Report 2015, World Economic Forum

Of the countries of Southeastern Europe, Serbia (77th) recorded an improvement of three places, Macedonia (47th) of six places, Greece (66th) of eight places, while Romania (63rd) jumped 12 places. Bulgaria (73rd) maintained its position from last year, while Bosnia and Hercegovina was not included in the research this year.

Source:  Global Information Technology Report 2015, World Economic Forum

Network Readiness Index – structure and methodology

1. ENVIRONMENT
Political and regulatory
Business and innovation
 
 
2. READINESS
Infrastructure
Accessibility
Skills
 
3. USAGE
Individual
Business
Government
 
4. IMPACT
Economic
Social

 

This year’s methodology for preparing the Network Readiness Index is comprised of four sub-indexes divided into 10 pillars. The index uses 53 variables, 26 of which are made up of quantitative data gathered from available international sources, such as the World Bank, the United Nations, and the International Telecommunications Union (ITU). The other 27 variable include data collected from the polling of businessmen.

Profile of Croatia

It can be concluded that Croatia is not sufficiently using its well-developed existing ICT infrastructure because it lacks the necessary reforms and the inclusion of ICT in higher quality services to the business sector and residents.

The fundamental reason for Croatia’s lower ranking compared to last year is a decline of 10 places in the sub-index Usageand a fall of 9 place in the sub-index Impact.

Source:  Global Information Technology Report 2015, World Economic Forum.

Source:  Global Information Technology Report 2015, World Economic Forum.

  1. ENVIRONMENT
    The sub-index Environment has remained at the same level. The Business and Innovation Environment is unchanged, while on the other hand, the Political and Regulatory Environment improved slightly by one position. This change was not enough to improve the overall ranking.

Poor rankings were registered in the efficiency of the legal system in disputing government regulations (137th), the efficiency of the legal system in resolving disputes (133th), the acquisition of advanced technology by the government (128th) and access to venture capital (110th).

  1. READINESS
    The Readiness Index is in a mild decline. The pillar for Accessibility fell by six positions and the pillar for Skills by four. A positive shift of seven positions was observed in Infrastructure.

Poor rankings were recorded in the indicators for the quality of the educational system (97th) and the production of electrical energy (73rd).

Readiness is a sub-index, where Croatia is ranked best because of the coverage of mobile networks (1st) and competition on the Internet and telephone markets (1st).

  1. USAGE
    Under this sub-index there is a noticeable difference between the very good Individual use of ICT (39th) and very poor Business (92nd) and Government (83rd) use. The latter’s use of ICT fell by a considerable 18 places, primarily because of poor indicators for the quality of on-line services of the government and the success of the government in promoting ICT (109th).

The use of ICT by the business sector worsened its position by 11 place, mostly because of a low capacity for innovation (123rd) and inadequate schooling of employees (128th).

  1. IMPACT
    The sub-index Impact also reveals poorer results – 11 positions lower than last year. The pillar Economic improved by four positions, but Social impact fell from 66th place to a poor 80th place. That decline to a great extent is a consequence of a decline under the indicator for the quality of government on-line information to citizens by 36 positions and the indicator for the quality of on-line services for citizens (97th).

“Croatia is recording a growth of employment in ICT, but the changes to systems that rely on ICT have not been fast enough or of a sufficient quality. The government must influence positive changes through the reform of public administration and the educational system, and by creating a stimulative financial framework for and promotion of the industry – we need a complete ecosystem that will enable the systematic development of ICT as one of the rare propulsive industries in Croatia,” commented Adrian Ježina, President, of the HUP-ICT Association, about this year’s report.

The entire report can be downloaded at www.weforum.org.