Tech industry growing Europe-wide says EU Report

The European market for IT, telecommunications and digital consumer electronics (ICT) is expected to increase by three percent to 761 billion Euro in 2008. This is the latest forecast of the European Information Technology Observatory (EITO) presented in Brussels last week.

“The high-tech industry is again achieving a considerable plus on an already high level”, said EITO chair Bruno Lamborghini. “Based on solid growth in the European market and their enormous potential in know-how, European companies are well positioned to excel in global competition.”

EU Commissioner Viviane Reding gave the keynote in the official opening of the new EITO online database. She said in her address: “EITO has become a principal source of statistics on the ICT sector. This high quality information is important not just for tracking the ICT sector itself, but because the ICT industry is the motor of the advanced economy, representing 6 per cent of total gross domestic product in itself but driving fully 20 per cent of overall productivity growth.” Graham Vickery, head of the OECD’s Information Economy Group and Jaime Smith Basterra, BITKOM board member and board member of Telefónica O2 Europe also contributed to the event.

This year, of the large European markets, Spain, with 4.6 percent and France with 3.2 percent are showing the strongest growth. In value terms, the leader is the UK. With an ICT market of 152 billion Euro, the UK is ahead of Germany, with 145 billion Euro and France, with 113 billion Euro.

“This is due in particular to the fact that British undertakings have by far the largest investments in the EU in IT outsourcing”, explained EITO chair Lamborghini. “Similar activities in other countries are often still carried out within companies, and consequently do not appear in the market statistics.” The British ICT market accounts for 20 percent of the EU total, the German, 19 percent. Then come France with 15 and Italy with 9 percent.

The strongest impulses are coming from information technology spending. The IT market across Europe is currently growing by 4.3 percent, to 313 billion Euro. Within this segment, IT services (5.7 percent) and software (5.2 percent) in particular are booming. In IT services, the outsourcing market, with 7.4 percent, is showing the greatest plus. “We expect growth in IT to continue next year at the same rate”, said BITKOM board member Smith Basterra. According to EITO IT spending will expand by 4.4 percent in 2009 across the EU, to 326 billion Euro.

In the telecommunications sector, there is lower growth. For the EU as a whole, the telecom market is increasing in 2008 by 2 percent, to 386 billion. While turnover for fixed-voice telephony is falling, there is strong growth in fixed and mobile data services. “Fast broadband connections are indispensable not only for businesses – the majority of private customers also wants to be able to exploit all the possibilities of the Internet with high transfer rates”, said EITO chair Lamborghini. For 2009, EITO is expecting a plus of 1.8 percent to 393 billion Euro in the telecommunication sector.