Third edition of Ericsson’s Networked Society City Index ranks New York, Stockholm and London highest in terms of their ability to use ICT to benefit business Individuals, rather than businesses or institutions, drive development resulting from ICT maturity Report concludes that businesses benefit from ICT when there are clear legal and fiscal frameworks, simple and fast procedures and predictable conditions

Today, Ericsson (NASDAQ:ERIC) released the third edition of its Networked Society City Index and report, which analyzes ICT-driven benefit creation in 25 of the world’s largest cities. Whereas the two previous editions focused on the benefits that ICT generated for cities and citizens respectively, this edition explores the benefits for businesses. By covering additional indicators used to analyze business life in these cities, a correlation was drawn between ICT maturity and the ability to use ICT to benefit business. New York, Stockholm and London emerged as the top three cities in the ranking.

The report lists some of the positive effects that ICT has on innovation and entrepreneurship. Firstly, ICT leads to an increased number of entrepreneurial opportunities. For example, it enables new product innovations such as music and video streaming, e-commerce and cloud services. Secondly, ICT improves access to markets – for example, by enabling entrepreneurs and specialized niche firms to reach larger geographical markets. Thirdly, ICT reduces the cost of transactions between firms – for example, by minimizing the need to be located geographically close to suppliers, partners and customers.

Patrik Regårdh from Ericsson’s Networked Society Lab says: "We see the individual – rather than city institutions or businesses – as the drivers of development resulting from ICT maturity. Governments follow by adapting to citizens’ changing behavior, while businesses primarily adopt ICT innovations to increase internal efficiency. More importantly, government decisions help steer the business sector’s ICT development. Therefore, changes in policy, regulation and planning, paired with research and support for taking risks and funding, are some of the key factors for driving progress. These factors are crucial in helping organizations of all sizes to connect, collaborate and compete more effectively."

The positive correlation between ICT maturity and economic development is widely supported by numerous academic reports and case studies. For example, in a report issued by the Stockholm School of Economics in 2012, it was concluded that a 1 percentage point increase in broadband penetration increases new business registration by 3.8 percent.

In addition to the top-three ranking cities, New York, Stockholm and London, the following cities are also part of the index: Beijing, Buenos Aires, Cairo, Delhi, Dhaka, Istanbul, Jakarta, Johannesburg, Karachi, Lagos, Los Angeles, Manila, Mexico City, Moscow, Mumbai, Paris, São Paulo, Seoul, Shanghai, Singapore, Sydney and Tokyo. 28 indicators have been used to measure the total benefits in the index for each city: The indicators can be categorized into two dimensions: cities’ ICT maturity and benefits from ICT investments from both a social, economic and environmental point of view.

Notes to editors

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