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Greece & The Role of IT

Our Rankings Show Greece Lagging

We've been researching national IT dynamics for the past few years at the Tau Institute, covering more than 100 nations. We believe that aggressive adoption of IT on a national basis is the key to sustained economic and societal growth.

We also realize that larger forces can derail the most aggressive commitments and best intentions. The largest force is violence, whether local and endemic, terroristic, or a function of war. A second major force is overarching economic strategy, which is not explicitly violent but can continue to cause great disruption and distress.

Making Your Bed
Thus, we arrive at the Euro crisis, Greece, and the Procrustean Bed. The fundamental challenge within the Eurozone, known from the start, is that of yoking several unlike nations into a single economic sled.

The Euro was largely driven by German Chancellor Helmut Kohl, who saw a common currency between his nation and France as a way to eliminate the possibility of future wars between the two, and thereby achieve a long-term peace that Europe had not seen previously. The Maastricht Treaty of 1992 shortly followed the unification of Germany in 1990, both occurring during Kohl's time as Germany's leader.

But the common currency didn't end with the two largest (and similar) economies of Europe as members. The Maastricht Treaty allowed many other nations to become part of the Eurozone, if they promised to adhere to certain criteria.

Thus came a number of smaller and poorer nations with economies that were quite dissimilar to those of giants Germany and France. The yoke had been placed; the Bed (which in ancient Greek history is one in which hapless travelers are brutalized by the evil Procrustes until they fit into it) had been made.

Discrepancy
Per-person incomes in the Eurozone range from about $15,000 to $50,000 for the most part, unemployment rates vary widely, income parity varies widely, and our Tau Institute rankings of national IT environments vary widely as well.

It can be pointed out that there are also significant income and unemployment disparities across the United States, another single-currency zone. But the US has a very free flow of labor-if you can't find a job locally you can move to a different state or region relatively easily-and a common (if unofficial) national language.

It is much, much easier, for an unemployed worker in high-unemployment South Carolina to seek work in high-employment Nebraska, for example, than for an unemployed worker in Greece to do the same in Germany. The US Federal Reserve Bank also has the ability to print money and have it flow through the states with a relatively politics-free flexibility that the European Central Bank simply does not.

As I write these words, it appears as if the crisis of Greece staying in the Euro will be resolved. Helmut Kohl himself has been sharply critical of positions within the current German government that are rigid in interpreting the letter of the law but fail to appreciate the notion of a united Europe within the united currency.

Tilting at Windmills
That said, it seems that a unified currency is a quixotic quest. As an example, below is a chart of where the currencies of four quite similar Southeast Asian nations (Philippines, Malaysia, Indonesia, and Thailand) have traveled over the past five years. The lines moving upward the most quickly represent the weaker currencies.

Had these four similar nations been yoked to a common currency, the pressures on Indonesia (the blue line) to maintain budget discipline would be considerable when compared to the Philippines and Thailand (at the bottom). Malaysia (green line in the middle) would face considerable pressure not only to conform to an overall agreement, but would also be affected by economic stress from its neighbors below and above it.

There is rudimentary talk of creating a single Southeast Asian currency some day-this chart illustrates the difficulty of doing so.

Tying it Together
All of this discussion ties back into our ongoing research at the Tau Institute, and the work I do as Conference Chair of Cloud Expo | @ThingsExpo.

At the Tau Institute, we seek to measure the relative dynamics of national IT environments, as well as their real-time momentum. By viewing the chart above, it should be no surprise that Indonesia lags within its region, whereas the Philippines is a leader. Malaysia actually follows the Philippines closely, with Thailand a bit further behind, for reasons other than currency fluctuation.

But the overall correlation is strong throughout Asia and other regions of the world. Back in Europe, for example, Greece trails every country but Italy and Russia (another under-performer with a serious currency dilemma).

Another significant point about Europe is that several non-Eurozone nations emerge among the leaders, including Denmark, Hungary, the UK, Sweden, Poland, and Bulgaria, all of whom outrank Germany.

That said, the Eurozone nations Estonia, the Netherlands, Finland, Latvia, and Lithuania also score better than Germany. (It's worth remembering that our rankings adjust for income and cost of living to provide a relative, not absolute picture of IT infrastructure development.)

Closer economic cooperation and even a united currency can bring great regional benefits if said region is viewed more like the US than completely independent nations. Giving up even small bits of sovereignty is an incendiary issue everywhere, so such thinking must be advanced very cautiously.

But my question is, if Greece is able to remain in the Eurozone, how will it be able to increase its commitment to IT development? From where will the money come? How can investors, governmental and private, be confident in an economic environment that looks to be one of continued austerity?

Meanwhile, the world continues to turn. My work with Cloud Expo | @ThngsExpo means bringing together 150 or so speakers twice a year to discuss the latest use cases, developments, and great thoughts about cloud computing and all that it entails.

These are the products, services, and solutions that are being adopted worldwide with the aim of improving economies and societies. It starts with these people, as I continue to wish for the day when violence and ham-handed government policy does less for those in power and more for everyone else.

Contact me on Twitter

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.

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