The ranking, which is up from 18th place last year, was revealed in the World Economic Forum’s (WEF) Global Information Technology Report 2015 released today.

It shows Australian businesses have much to learn from their European counterparts, with seven countries making the top 10 of the world’s most advanced ICT economies, while an example much closer to home – Singapore – topped the ranking, bumping Finland to second place. Other economies in the top 10 include the US (7) and Japan (10).

The report was compiled in association with more than 150 of the WEF’s partner institutes, including the Australian Industry Group. Its CEO, Innes Willox, acknowledged the ranking’s improvement as positive news for Australia’s economic development, but said more should be done to return to the top 10, which Australia last made more than a decade ago.

“The improvement in Australia’s rankings is most welcome especially as it follows a period of deterioration over the decade to 2014.  However, it also serves as a reminder of our fall from 9th place in 2004,” he said.

“We should be doing more to ensure we return to a leading position.  This is particularly important for Australia where achieving top-ranking ICT capabilities can do so much to counter the tyranny of distance.

“Australia should have a firm aim to regain our top-10 standing by 2020 by accelerating the development of our digital capabilities as part of the general overall emphasis we need to place on lifting productivity and competitiveness.”

Looking at the report’s four key categories, Australia generated mixed results dropping three places to 17th in the environment sub-index, which gauges the friendliness of a country’s market conditions and regulatory framework in supporting entrepreneurship, innovation and ICT development.

Australia also tumbled down one spot to 20th place in the usage sub-index – down from a peak of 11th in 2007-2008. However, improvements were made in the readiness and impact sub-indexes, where Australia respectively climbed two spots to 7th place and one spot to 19th place.

The readiness sub-index measures the extent to which a country has in place the infrastructure and other factors, such as affordability and skills, to support the adoption of ICT across businesses and the wider community. The report suggests the better ranking compared with last year’s performance was mainly driven by a large improvement in mobile ICT affordability. The impact sub-index measures the broad economic and social impacts accruing from ICT.

In light of the results, the report made recommendations for Australian governments and businesses to improve their digital competitiveness, starting with advice on regulatory settings.

“Australia’s relative performance on laws relating to ICT (eg electronic commerce, digital signatures and consumer protection) deteriorated from 3rd place in 2003-2004 to 28th place in 2014-2015,” Willox commented.

“It is very important that any proposed laws and regulations impacting ICT (including new approaches to taxation of online transactions) address the current concerns and needs of businesses, while still allowing them to remain competitive in a fast moving and increasingly well connected environment.”

A need for more business ICT innovation and staff training was also highlighted following a drop in Australia’s global ranking.

“Australian business dropped to 27th place globally in terms of its capacity to innovate in 2014-2015, down from 23rd in 2013-2014, but remains better than the low of 35th place in 2006-2007,” Willox said.

“In addition, Australia is ranked 30th for the extent of staff training, which the WEF interprets as a proxy for the capacity of management and staff to innovate. These results suggest there is further room for Australian businesses to increase their efforts to integrate ICT into their day-to-day operating environment.”

Finally, the report advised a review of the country’s fixed broadband internet affordability, which has already sharply improved from 101st place last year to 76th place this year, likely thanks to the government’s construction of the National Broadband Network.

It also suggested improvements in the quality and availability of ICT education, and more focus on science, technology, engineering and mathematics teaching in schools to support the growing demand for skilled ICT workers, which has been rising at around 19% per annum in recent years.

The WEF’s Global Information Technology Report 2015 can be found here https://files.weforum.org/u5o1xfgs6q.