Europe's ICT sector growing steadily, finds report
The European Information and Communication Technology (ICT) market is expected to grow by 2.9% to EUR 668 billion in 2007, reports the European Information Technology Observatory (EITO). In its annual report on ICT in Europe, the Observatory predicts that the entire market, combining information technology and telecommunications, will grow by the same percentage in 2008, making it worth an estimated €687 billion. 'The European ICT industry continues to grow steadily, with IT services, software applications and broadband data services as the main drivers,' said Bruno Lamborghini, the Chairman of EITO. The report finds that software and IT services in particular are booming with increases of 6.5% and 5.5% respectively versus last year. The study also reveals a strong demand for professional IT services like outsourcing, consulting and system integration. 'The EITO 2007 Report has confirmed that Europe has entered a new ICT investment cycle encouraged by stronger than expected economic recovery, EU enlargement, the booming Asian markets and new technological opportunities,' said Mr Lamborghini. According to the report, there are signs that the hardware market is bouncing back with the EITO expecting it to grow by 1.7% in 2007 and by 2.2% the following year. Moreover, it notes that notebooks and multi-function devices, such as all in one printer-scanners, are creating an increase in demand. However, the market for desktop PCs is shrinking. Even so, for 2008 the EITO experts are expecting an overall market value in IT of €335 billion, up 4.7% on this year. The telecommunications market is said to be slightly less upbeat than the IT sector, with the Observatory predicting it will grow by 1.5% to €348 billion in 2007, and by 1.1% to €352 billion the following year. EITO notes that fixed data services such as Asymmetric Digital Subscriber Line (ADSL) are continuing to show positive growth signs and the market should grow 6.4% in 2007. 'Broadband internet is already standard in companies and private households are catching up,' said Mr Lamborghini. Currently about 42% of western European households are already plugged into high-speed internet services. Mobile data services are also increasingly popular and newer Third Generation (3G) mobile technologies are showing signs of growth. However, the market for fixed voice services is declining by around 5% per year. Fabio Colasanti, the Director General of the European Commission's Information Society and Media DG, welcomed the report saying: 'The ICT sector remains one of the most dynamic sectors of the economy, with higher than average growth rates and research intensity. 'The study shows that the first signs of fundamental change are appearing as Europe moves towards a knowledge-based economy. The EU's 7th Framework programme for research, the current review of the regulatory framework for electronic communications and the i2010 initiative for a European Information Society are all designed to support continued growth in this area,' he added. Looking ahead, EITO sees huge potential in the consumer electronics market, which it predicts will grow by around 2.5% due to strong customer interest in flat-screen televisions. The EITO also expects new demand to be created through IT innovations in the areas of peer-to-peer (P2P) software, logistics, Radio Frequency Identification (RFID), security technologies, e-health services and e-government. Nonetheless, Mr Lamborghini notes that while the European ICT market is currently performing well, there is a need to continue innovating and to fix some of the deeper underlying issues at the heart of Europe's economy. 'The European Union has to face the global challenge. This can be achieved by exploiting the many strategic assets, such as the EU's advanced communications infrastructures and services, as well as the world's largest market for education, comprising close to half a billion people,' he said. 'But at the same time, Europe needs finally to put an end to its present weaknesses: market fragmentation, too little investment for R&D [research and development] in ICT, limited high-tech start-ups, and insufficient preparation and mobility of people with the right kind of skills,' Mr Lamborghini concluded.