02:35 PM

U.S. Internet Leadership Is Slipping

A study by the Economist Intelligence Unit says the United States now ranks sixth in E-readiness.

With the commercialization of the World Wide Web a decade ago, the United States easily surpassed all other nations as the leader in Internet use. As the popularity of the Web grew internationally, Americans' use of the Internet grew faster, in part, because unlike the citizens of most other foreign nations, they weren't paying by the minute to access the Internet, which curtailed Net growth abroad.

Not so today. America's leadership in citizens' use of the Internet is slipping, according to a study issued this week by the Economist Intelligence Unit, the business information arm of the Economist Group, publisher of The Economist magazine.

The U.S. ranks sixth on this year's E-readiness list of 50 developed countries. E-readiness measures a nation's E-business milieu to determine how open it is to Internet-based opportunities. The United States was the undisputed leader when the E-readiness ranking first surfaced in 2000, a position it lost last year to Sweden when the United States fell to third place. As the United States slides further, other developed countries, particularly the four Scandinavian nations and Britain, advance. America needn't worry, though. "It's no Bangladesh here," says James Cortada, a research at the IBM Institute for Business Value, which cosponsored the study.

The Economic Intelligence Unit bases its E-readiness rankings on each countries' technology infrastructure, general business environment, degree to which E-business is being adopted by consumers and companies, social and culture conditions that influence Internet usage, and the availability of services to support E-businesses.

It's not that the U.S. Internet use is in decline--it isn't--but other countries are making bigger strides in E-readiness. For instance, the study gives strong marks to nations that adopt broadband, and the United States continues to have a large base of dial-up users. In Europe, many recent Internet converts have skipped dial-up and gone directly to broadband, specifically digital subscriber lines, and the per-minute charges abroad have mostly vanished.

Many foreign governments strongly advocate broadband; The U.S. government remains passive in encouraging broadband use. In addition, DSL offered through national telephone companies dominates as a broadband option in Europe. Here, competition between cable and DSL muddles broadband growth. Also, many foreign governments use the Internet to collect taxes and deliver government services, and their citizens like that, Cortada says. True, E-government has made strides in the United States. "The Bush administration is doing all the right things to continue to promote the use of IT much the way the Clinton administration did," Cortada says. "I'm very proud of what my government has done." Still, many Americans balk at employing online government services. The E-readiness report cites a recent study that says 42% of Americans feel uncomfortable with the idea of E-government.

The criteria used by the Economist Intelligence Unit assess countries' technology infrastructure--this is where broadband comes in--their general business environment, the degree to which E-business is being adopted by consumers and companies, social and culture conditions that influence Internet usage, and the availability of services to support E-businesses.

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