IT and telecommunications show signs of recovery, claims new report
A new report published by the European Information Technology Observatory (EITO) suggests that the Western European market for information technology (IT) and telecommunications is gradually recovering from an all time low growth rate in 2002. The EITO 2003 edition, which was launched in Brussels on 25 February, outlines how the global information communication technologies industry doubled its revenues in the past ten years, reaching a record growth of almost 13 per cent in 2000. It is believed that the European information and communications technology (ICT) industry should achieve a growth of 2.5 per cent in 2003 and 4 per cent in 2004, which amounts to a total value of 607 billion euro and 632 billion euro respectively. 'The ICT industry and market is in a phase of discontinuity between the conclusion of an extraordinary growth cycle driven by the contemporary development of new technologies, the widening of ICT usage and intense pro-active market liberalisation policies and the beginning of a new cycle driven by extremely promising tendencies in technology from broadband services to ubiquitous computing and mass extensive ICT applications,' said EITO chairman, Bruno Lamborghini. Indeed, there are definite signs of this new ICT cycle getting off the ground: according to the EITO report, broadband connections, show a high growth rate and are expected to more than quadruple by 2006. The report also reveals a recent trend in the ICT sector, away from hardware towards software and services: Only 26 per cent of total revenue is now made with computing equipment. 'New technologies and applications, which represent a fundamental tool for improving productivity and competitiveness of SMEs [small and medium sized enterprise] and public administrations, will open the market to millions of users through integrated e-business and ecosystems applications, web services, e-government and e-learning, with the development of knowledge management systems and total security management systems,' claimed Mr Lamborghini. Commissioner for Enterprise and the Information Society, Erkki Liikanen, who was also present at the EITO report launch, agreed that the ICT industry has a crucial impact on other businesses as a source of increased productivity. However, he stressed the fact that the ICT industry is also important in its own right, employing about 1.25 million people and enjoying a turnover in 2002 of 236 billion euro: more than 2.5 per cent of European gross domestic product (GDP). Such developments have helped push Europe to covet 29 per cent of the global ICT market, while the United States' market share has slipped to just 31.5 per cent. However, according to Mr Lamborghini 'The European market is still an empty box for most innovative ICT applications diffusion [...]. It is Europe's challenge to take advantage of these opportunities.' In order to harness such opportunities, Mr Lamborghini called for action: 'Europe requires a proactive mix of focused public and private policy actions to take advantage and not to lose the opportunity of a new phase of the ICT cycle.' Mr Liikanen highlighted how the European Commission has already taken action to strength this sector with its recent recommendation on relevant markets and a new regulatory framework.