InformationWeek

he more you export, the more you invest in leading-edge IT. That's one of the findings of the InformationWeek Research Global IT Strategies 2001 study of 894 IT and business professionals.

The study compares export leaders--defined as companies that distribute products or services to six or more countries--to export laggards. Much of the investment the leading export companies make in IT is toward E-business, from Web-based E-commerce and supply-chain networks to electronic marketplaces. This focus seems to be paying off. Export leaders that sell services say they get a higher percentage of their revenue (14%) from global E-business than the export laggards (8%). The same holds true for exporters of products, which account for 13% of leaders' revenue vs. 7% of laggards'.

Specifically, leading-edge exporters of products invest more in E-business technology and strategy. A full 42% of the leaders, compared with 26% of the laggards, say they're improving their electronic supply chains. Also, 42% of leaders say they participate in an E-marketplace, as opposed to 32% of the laggards. The leaders are also more likely (44% vs. 37%) to integrate E-business into their back-office or legacy systems.

Export leaders in the services market are also investing more in E-business. More than one-third (38%) of the leading service exporters are improving their electronic supply chains, as opposed to only about a quarter of the laggards; 46% of the leaders are participating in an E-marketplace, as opposed to 30% of laggards; and 43% of the leaders are integrating E-business operations with their back-office or legacy systems, while only 37% of the laggards are doing so.

A study by the Technology Policy and Assessment Center at Georgia Tech found that IT is helping developing countries--especially in Asia--become bigger exporters. While the United States is still the world's No. 1 exporter, the "Asian Cubs"--China, India, Indonesia, Malaysia, Thailand, and the Philippines--are moving up alongside traditional regional leaders, the "Asian Tigers" of Singapore, South Korea, and Taiwan, thanks largely to IT, according to Georgia Tech.

Like the link between exporting and IT, the link between exporting and competitiveness is strong, but not completely defined. "It's hard to know whether you're competitive because you're exporting or whether you export because you're competitive," says Martin Baily, former chairman of the Council of Economic Advisers and currently a senior fellow at the Institute For International Economics, a Washington think tank. The same could be said of IT--it's hard to know if leading exporters got that way because of investing in IT or if exporting necessitates that investment. "We know if you participate in a global market, it improves your productivity, because it provides exposure to global best practices," Baily says.

Governments can't hope to spur economic growth just by encouraging technology. "Countries can't just use technology to short cut their way to development," says Daniel Rosen, a visiting fellow at the Institute For International Economics. To succeed in a global economy, he says, countries must reduce fiscal spending and have both an exchange-rate policy and a good competition policy, among about a dozen macroeconomic policy stances.