The UAE has climbed to 25th place in the Global Information Technology Report (GITR) 2013, jumping five places ahead of Spain, Oman and Hungary.
The report, compiled by the World Economic Forum (Wef) and business school Insead, focuses on "Growth and jobs in a hyper-connected world". It assesses the digital ecosystems of 144 countries across the developed and developing world, accounting for more than 98 per cent of the world's GDP. The Networked Readiness Index (NRI) is used to rank each nation according to how they leverage IT and communications to drive economic growth and social development.
Countries are scored across 10 pillars including skills, infrastructure and digital content and economic and social impacts along with the country's market and regulatory framework in ICT.
While the UAE has moved up in the overall rankings, the country scored poorly in affordability and ranked 123rd in internet and telephony competition. It did however jump 30 places to 2nd in government usage of ICT.
Finland came top in the GITR, up from third place last year followed by Singapore in second. Sweden dropped to third place after ranking first last year. "Our 2013 study reveals significant disparities and persistence in the 'digital divide' separating top performers and those still struggling to close the ICT and skills gaps," said Bruno Lanvin, the GITR co-editor and executive director of Insead European Competitiveness Inititiative.
"Our analysis shows how matching investments in ICT with investment in skills and innovation can help economies cross a threshold, beyond which return on investment increases significantly."
The greatest disparity is in the Middle East region.
While the GCC countries enjoy developed ICT markets and infrastructure, other parts including the Levant and North Africa suffer from inadequate infrastructure and have ranked lower in the GITR.
Qatar was the highest-ranking country in the region, rising from 28th place last year to 23rd this year. Bahrain came 29th and Saudi Arabia 31st, Yemen ranked the lowest in the region at 139th place.
"Digitisation created 6 million jobs and added US$193 billion [Dh708.84bn) to the global economy in 2011.
"Although in aggregate positive, the impact of digitisation is not uniform across sectors and economies - it creates and destroys jobs," said Bahjat El Darwiche, a partner at Booz & Company.
He added that "policymakers wishing to accentuate the positive impact of digitisation need to understand these different effects if they wish to act as digital market makers in their economies".
Countries across the region have been investing heavily in internet and broadband infrastructure in a bid to boost their economy and witness the effects of digitisation.
"This report demonstrates that economies that fail to implement comprehensive national broadband strategies risk losing ground in global competitiveness and may fall behind in the delivery of societal benefits from ICTs," said Robert Pepper, the vice president for global technology policy at Cisco, which sponsored the GITR.
This week both of the UAE's telecoms operators - Etisalat and du - provided access to voice over internet protocol service (VoIP) Skype to their customers, a watershed decision in terms of greater affordability and increased competition for the sector.