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| EU Membership Will Pump More Than $27 Billion into IT Markets of EU-10 Over 10 Years, Says IDC The IT markets of the 10 states that joined the EU in 2004 are set to stay hot for the foreseeable future, and EU membership is playing a critical role. According to a new study by IDC, direct and indirect sources of funding will boost annual IT spending growth by more than 2.2 percentage points over the 10-year period 2004-2013. This amounts to an additional $27.6 billion that would otherwise have been unavailable for upgrading infrastructure, investing in software, and employing service providers. "The impact of the increase will vary country by country given the diversity of the business environments, the state of local IT development, and the level of entrepreneurialism and FDI", said Steven Frantzen, group VP of IDC CEMA and general manager for research, IDC EMEA. "To encourage IT uptake and general business development, one thing IT providers will need to do is navigate the processes by which direct funds are awarded and the various legislative and reform initiatives that often depend on an IT solution." Recent economic indicators provide strong evidence that EU membership has been good for the economic development of the 10 states that joined in 2004. According to Eurostat, with the exception of Malta, the new members had GDP growth rates well above the EU15 average of 1.5% in 2005 and 2.6% last year. Both Estonia and Latvia have seen their GDP growth soar past 10%, putting them among the fastest-growing economies in the world. But membership has been even better for the IT markets. While consumers use their increased spending power to buy or upgrade IT, businesses are under additional pressure to adopt the technology and transparency standards of international players to deal with the increasingly competitive environment. Then there is the law. According to IDC, regulations represent a key IT market driver that is often underestimated in its impact. From the much publicized telecommunications regulations and data privacy acts to lesser-known laws on digital signatures and customs administrations, the EU has set a broad range of policies and guidelines in which the use of information technology is crucial for compliance. "Talk to a CEO or a CIO at a bank, telco, or manufacturer in one of the new member states", said Frantzen, "and you can easily spend hours discussing the best IT strategies for staying in compliance with payroll administration, client-record management, or a dozen other processes related to everything from accounting to recycling. In most instances, the servers, software, and outside professionals used to meet the compliance standards also help firms meet the requirements of international players." Fortunately public and private organizations alike do not need to foot the bill alone. National development plans in each of the member states channel structural funding into priority areas identified both by national governments and by EU initiatives such as i2010, which aims to develop ICT-enabled public services. Public administrations and small and medium-sized enterprises are the main beneficiaries of direct funding and other financial instruments, including subsidized loans that enable them to invest in IT infrastructure and solutions. "It would take a week to outline the various programs aimed at small and medium-sized business, let alone the legislation and continent-wide initiatives", said Scott Moore, senior consultant, IDC CEMA. "At the end of the day the size and diversity of EU institutions mean there are a lot of hands pushing the IT markets forward." According to IDC's new study, IT spending among the EU10 new member states will grow by nearly 12% annually on average for the 10 years following 2004. The cumulative effect of all the different EU components means that in 2013, total IT spending will be more than 22% higher than it would have otherwise been. "EU membership has essentially created a large set of needs and niches that in turn create new opportunities for IT vendors looking to grow their business", said Moore. "Like the EU itself, they can be daunting to study but ultimately well worth the effort." IDC's EU Enlargement: Understanding the Impact on ICT Markets in the New Member States (Doc #ESP8P, June 2007) examines the implications of EU enlargement on the ICT markets in the 10 countries that joined the EU in 2004. It specifically reviews the regulatory and economic impact on ICT market development, comparative ICT spending ratios and other measures of ICT development, ICT spending trends and country market sizing, key opportunities according to technology segment, vertical market developments (e.g., public sector, utilities), and evolving vendor strategies. The study also evaluates the potential impact of various EU support programs and funding on ICT market development, while providing an analytical framework for understanding requirements and scenarios for this development in the post-accession CEE environment. write your comments about the article :: © 2007 Computing News :: home page |