The US has dropped to fifth place as an IT economy, according the World Economic Forum’s (WEF) Global Information Technology Report 2004-2005.

The annual survey looked at 104 countries, and measured "the degree of preparation of a nation or community to participate in and benefit from ICT developments", from which was extrapolated a "network readiness index".

Using this method of measurement, Singapore got the top spot, followed by Iceland, Finland, and Denmark and then the US. By contrast, the 2003-2004 report put the US in top position, up one place from the previous year.

The 2004-2004 report also showed Germany falling from 11th to 15th place, so the US wasn’t the only industrial power losing out. The UK put in a good performance, rising from 15th to 11th position.

It doesn’t appear that the US is doing anything wrong, more that other countries are moving up. Factors taken into consideration when assessing a country include regulation, government policy, education, economic situation, quality of scientific research, and penetration rates for different types of new technology.

If we are to take the report at face value, the regions to watch in future will be Asia, Eastern Europe, with small, oil-rich Gulf states also on the rise. It also appears to be the case that smaller countries have a number of advantages which allow them to use ICT (Information and Communications Technologies) to out-compete their larger rivals.

The WEF is best known for its prestigious talking shop, held each year in Davos, Switzerland, and open only to the global business and political elite. As its name would suggest, the economic impact of technology comes first in the organisation’s estimation, a bias that reveals the limitations of this report. Without doubting the thoroughness of the research, it makes little mention of the way innovation and economic growth affect issues of inequality, the environment, and political tension.

That said, one interesting trend the authors detect is a narrowing of the gap between developed and developing ICT economies.