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The BECH Index for a country reflects the industrial and post-industrial demand capacity of the country and thus also reflects the demand for IT related products and services.
The BECH Index for a country is calculated as the Gross Domestic Product (GDP) using the PPP principle multiplied by the GDP per capita ratio.
The GDP reflects the economic capacity of a country, but does not reflect the degree of industrialization. The size of the GDP/capita ratio definitely reflects the degree of industrialization and will be higher for countries where the post-industrialization sectors are of significance. An exception is countries with relative substantial oil resources compared to the rest of the economy. The BECH Index thus may overestimate the demand capacity for certain oil producing countries.
Furthermore, the BECH Index only estimates the relative demand capacity, not the absolute capacity.
In order to calculate the absolute size of a specific market one will have to know the absolute size of this particular market in one of the major industrialized nations. The BECH Index can then be used to extrapolate this specific knowledge onto other markets.
The BECH Index uses Switzerland = 100
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