@CloudExpo Authors: Liz McMillan, Zakia Bouachraoui, Yeshim Deniz, Pat Romanski, Elizabeth White

Related Topics: @CloudExpo, Containers Expo Blog

@CloudExpo: Article

Cloud Computing & The World's IT Laggards

We've Identified the World's Most Dynamic IT Countries--Now Let's Look at the Other Side

There's a cheerful theory among physicists known as the "heat death of the universe," originated by Lord Kelvin (he of the Kelvin scale) in the 19th century.

The theory holds, in essence, that the universe will some day "run out of gas." Absent an infusion of new energy, it will eventually distribute its existing energy (ie, its heat) so uniformly over such a vast space that things will simply stop working; everything will be too weak to function.

This theory reminds me of the state of many nations today. Absent an infusion of new energy, they are muddling about while more dynamic nations are catching up, even passing them by.

As you consider international markets for Cloud Computing technology, which might not be as healthy as they appear on the surface?

The Tau Index
Last fall, I integrated some general measures of economic health into something I call the Tau Index, to find the most kinetic, most dynamic IT environments on earth.

Recently, I added a Press Freedom dimension, to see if Egypt and Tunisia would pop up-and sure enough, they did.

So it only seems fair to look at the other part of this list, the laggards, the ones who may have a heat death in their future. I started by trying to answer these three questions:

  • What countries seem to be under-investing in IT?

  • Are there places where income distribution is so fair that the game now is simply to maintain the status quo?

  • What places are closed loops, ie, have no infusion of new energy into their systems?

Under-investors. According to World Bank figures, the top five countries by IT expenditures are the United States, Japan, China, Germany, and the UK. No surprises there.

But if you look at IT expenditures as a percentage of a nations' economy, the top five are instead Morocco, Malaysia, Senegal, South Africa, and Hong Kong. The US drops to #14, and China all the way to #40.

Adjusting this percentage to account for income equality-ie, IT is no doubt more fairly distributed in Sweden than in India-I found a top five of Morocco, Hungary, the Czech Republic, Bangladesh, and Japan, with Sweden finishing sixth. The US rated #27, and China #55.

In other words, it looks like the US and China are actually under-investing in IT. The size of their economies makes them big spenders in absolute terms, but not world leaders in relative terms. Other laggards include Mexico, South America (including Brazil), Turkey, and Indonesia.

Also in this look, Japan (at #5) and Canada (at #18) rated surprisingly high and Germany (at #23) surprisingly low. Europe was all over the place. I'll examine all this in a later article.

Status-Quo. The countries with the most equitable income distribution in the world are those in Scandinavia, the Baltic region, the former Soviet Bloc states, and Japan.

Russia is not in this group; neither is the United States. China is near the bottom, down there with Mexico and Venezuela.

Scandinavian nations (along with Switzerland and The Netherlands) are routinely listed as having the best quality of life, healthiest populations, and highest levels of development. But are they continuing to invest aggressively in technology?

Looking at how much countries spend on a per-person (per capita) basis, Switzerland actually leads the world, followed by the United States. Norway, Sweden, and Denmark all crack the top ten, along with Finland, the Netherlands, and Hong Kong.

But looking at IT investment as a percentage of the overall economy, only Sweden cracks the top 20, investing 6.8% of its GDP into IT. Compare this to 7.3% for the US.

Finland invests 6.5%, The Netherlands 6.2%, Denmark 5.1%, and oil-rich Norway only 3.9%. Will these numbers improve, or are these nations happy enough with what they have to be more aggressive? In other words, are they heat-death candidates?

China (5.2%), Brazil (4.7%) and India (4.0%) are hardly superstars in this view. Clearly, they're all still grappling with endemic poverty on a large scale as they work to improve their overall economies. I would expect to see these numbers rise soon.

Closed loops. Having lots of babies and allowing lots of immigrants are the two keys to infusing new energy into the system. Without these two things, a country turns itself into a closed loop, and becomes a heat-death candidate.

Everyone knows that Japan's population is shrinking. Although it's is being aggressive with its IT spending, will the country's economy ever truly grow again?

Japan's not alone. Germany is shrinking, too. South Korea, although heavily populated, is now growing very slowly. Much of Eastern Europe (including Russia) is shrinking, and most Western European growth levels are very small. With aging populations, one can envision some fizzling futures out there.

China's growth rate is now less than half the world's level, which in this case is a positive sign.

Some countries continue to grow quickly. India. The Philippines. Most of Africa. They're not closed loops, to be sure, but may be growing too quickly.

Several others hover around the world average, including Egypt, Turkey, and Mexico. The United States and Canada are both growing at below world levels, but above European levels. Intuitively, this group seems to be on the mark; not closed loops, but not houses on fire either.

What Does It All Mean?
I haven't integrated all these dimensions into the Tau Index just yet. But it appears that the US, China, India, and Brazil are prime candidates for much more growth in their IT investment levels. The big question about the US is whether it is able, given its debt, unemployment levels, and general malaise.

Sweden seems to be the most aggressive among the world's strong economies, although on a small scale. The UK finishes strong in many categories of the Tau Index, although I haven't mentioned it much.

Latin America, including Brazil, still seems stuck in the starting blocks.

Japan, as always, confounds, and requires more study. Germany's also a paradox; is it primed for growth or headed in the wrong direction? Russia is perhaps not as exciting as BRIC thinkers may imply. Perhaps Poland can pick up some of this slack.

Then there's Australia, which doesn't spend much (4.9% of GDP), doesn't grow much (below the world average), and continues to prosper through its natural resources. How long can that last, really? Maybe its planned national broadband network will wake it up.

More later...

More Stories By Roger Strukhoff

Roger Strukhoff (@IoT2040) is Executive Director of the Tau Institute for Global ICT Research, with offices in Illinois and Manila. He is Conference Chair of @CloudExpo & @ThingsExpo, and Editor of SYS-CON Media's CloudComputing BigData & IoT Journals. He holds a BA from Knox College & conducted MBA studies at CSU-East Bay.

CloudEXPO Stories
Daniel Jones is CTO of EngineerBetter, helping enterprises deliver value faster. Previously he was an IT consultant, indie video games developer, head of web development in the finance sector, and an award-winning martial artist. Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams.
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed how this same philosophy can be applied to highly scaled applications, and can dramatically increase your resilience to failure.
Machine learning has taken residence at our cities' cores and now we can finally have "smart cities." Cities are a collection of buildings made to provide the structure and safety necessary for people to function, create and survive. Buildings are a pool of ever-changing performance data from large automated systems such as heating and cooling to the people that live and work within them. Through machine learning, buildings can optimize performance, reduce costs, and improve occupant comfort by sharing information within the building and with outside city infrastructure via real time shared cloud capabilities.
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
René Bostic is the Technical VP of the IBM Cloud Unit in North America. Enjoying her career with IBM during the modern millennial technological era, she is an expert in cloud computing, DevOps and emerging cloud technologies such as Blockchain. Her strengths and core competencies include a proven record of accomplishments in consensus building at all levels to assess, plan, and implement enterprise and cloud computing solutions. René is a member of the Society of Women Engineers (SWE) and a member of the Society of Information Management (SIM) Atlanta Chapter. She received a Business and Economics degree with a minor in Computer Science from St. Andrews Presbyterian University (Laurinburg, North Carolina). She resides in metro-Atlanta (Georgia).