The UK has been ranked the sixth best place to run an IT business. But Britain is better than other European nations when it comes to developing IT talent.
The US is still the best environment in the world for IT suppliers to prosper.
The Economist Intelligence Unit's Resilience Amid Turmoil report, which was sponsored by the Business Software Alliance, benchmarked the competitiveness of the IT industry in 66 countries.
The UK has dropped from third in last year's report.
Top 10 best locations for IT businesses
- US (last year 1)
- Finland (last year 13)
- Sweden (last year 4)
- Canada (last year 6)
- Netherlands (last year 10)
- UK (last year 3)
- Australia (last year 7)
- Denmark (last year 5)
- Singapore (last year 9)
- Norway (last year 14)
India, which boasts large IT suppliers and has a deep IT talent pool, was ranked 48.
The UK needs to improve in areas such as IT research and development, with relatively weak scores in public and private investment in R&D and the number of IT patents registered in the UK, according to the research.
But the report said, "The UK outshines other European countries in the human capital category, which measures the supply of IT talent, as well as the education system's capacity to train technology professionals with the necessary business, language and IT competencies."
Francisco Mingorance, senior director of public policy, Europe for BSA said the IT industry should be supported through the recession. "In today's economic climate, supporting a strong technology sector is more important than ever. Governments are realising that technology can play a pivotal role in driving the economic recovery and generating long-term growth. The goal of the Digital Economy Bill should be to stimulate an even stronger UK IT industry, and BSA encourages lawmakers to focus on the key enablers of IT competitiveness."