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Spending on IT in 2007 to top a trillion dollars

Glenn Chapman

Spending on computer technology will top a trillion dollars this year as the industry grows increasingly vital to national economies worldwide. An analysis of 82 countries and regions found that information technology (IT) businesses are major generators of jobs, companies and tax revenues.

Spending on computer technology will top a trillion dollars this year as the industry grows increasingly vital to national economies worldwide, according to a study by the technology market intelligence firm IDC released on Thursday.

An analysis of 82 countries and regions found that information technology (IT) businesses—computer hardware, software and services—are major generators of jobs, companies and tax revenues.

“Growth of the IT sector is critical to the world economy and each of the countries we study,” the International Data Corporation report concludes.

Global IT spending this year will equal 2,5% of the world’s gross domestic product and that figure will rise to 2,75% by 2011, according to the IDC study, which was commissioned by United States software giant Microsoft.

IT spending provides revenues for more than a million companies.

Those companies, in turn, employ 35,2-million people. Those employees and companies they work for will pay more than a trillion dollars in taxes in 2007.

Japan, Canada, Britain, France, Germany, and Italy and the United States account for two-thirds of IT spending worldwide and three-quarters of spending on packaged software.

Spending on computer hardware, software and services ranged from 3,6% of GDP in Singapore, Sweden and Denmark to less than half a percent in Pakistan and Nigeria.

The number of computer industry related jobs will climb by 7,1-million in the coming four years, according to the IDC study.

China is expected to add the most new jobs, with the second highest growth being in the US.

Overall, job growth in IT will be triple that of the average worldwide increase in employment, the study concludes.

More than a quarter of the new jobs created by the computer industry will be in developing countries, according to the study.

“These jobs will be driven by an evolving highly skilled labor force, an opportunity which is extremely important in developing a competitive economy,” IDC concludes.

Of the 4,6-million new software-related jobs expected to be created by 2011, 1,2-million will be in Brazil, Russia, India, China and Mexico and another million in emerging economies elsewhere, according to IDC.

Azerbaijan is expected to have the fastest growth in software-related jobs, followed by Russia and Vietnam.

“This is the first time we’ve had a global snapshot of what the IT world looks like and how that is likely to evolve in the next few years,” said Microsoft chief research and strategy officer Craig Mundie.

“For all these countries so focused on employment and economic productivity it is clear the IT sector is a big player both in terms of its own economy and leverage in other sectors.”

Technology colossus Microsoft, its partners and firms relying on its software employ 42% of the world’s IT workforce, according to the study.

Companies in “the Microsoft ecosystem” will earn more than $400-billion in revenues this year and invest nearly $100-billion in local economies next year, IDC reports.

IDC estimates that there are at least half a million companies in an ecosystem that includes computer makers, software designers, retail outlets, service firms, and application training groups.

For every dollar, euro, peso, or other unit of currency Microsoft earns in 2007, businesses linked to it will earn 7,79, according to the study.

Mundie said the findings validate years of efforts by Microsoft to convince countries to implement policies promoting higher education, high-speed Internet networks, patent protections, and access to markets and venture capital.

“I spent the last decade or so going into these emerging countries,” Mundie said.

“To look back ten years later and see the patterns in places as remote as Azerbaijan and as big as China you realise it is a big phenomenon and we are making progress. - AFP

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