Growth in global ICT spend may flag recession turnaround

After the economic downturn, a possible upturn; the global ICT sector has exhibited something of a bounce-back in recent weeks in a market worth US$58.9 billion in Q3 this year. That sum represents the first time in seven quarters that the market hasn't declined, and has sparked comment from analyst firm Ovum that the worst of the recession is over.

While there may be some financial turmoil in the UAE as Dubai World Group works through a financial restructuring, the global ICT sector seems unaffected and even shows signs of recovery. Although Q3 was down 5% year-on-year according to Ovum, there were reasons to be cheerful among software and IT services, business process consulting and telecom infrastructure companies.

Software and IT services were worth US$28.3 billion, up 3.6% on Q2, while business process consulting was worth US$18.6 billion, up 2.4% on the same basis. Telecom infrastructure services amounted to US$12.8 billion, growing 0.6% in the same period. If this growth in spend in hi-tech segments represents an increase in IT and communications budgets - rather than money spent from reserves that have been held in the face of financial uncertainty - then the news is truly good. It suggests that enterprises are finding the confidence to invest in expansion and upgrades which normally go in advance of expanded turnover, and hopefully profit. It might even herald a return to work for hi-tech workers that have furloughed, although it will take consistent growth in income for the sector to truly call a bottom to the recession.

So which companies are the main beneficiaries of this slight increase in spending? The software and IT services segment was led by HP, IBM and Fujitsu; the lead business process consultancies were revealed as Accenture, CSC and IBM; and the top telecom infrastructure service providers were Alcatel-Lucent, NSN, Ericsson, Cisco and T-Systems.

IT spend in MEA has been one of the highlights of an otherwise fairly poor year for IT manufacturers. According to IDC, developing countries may only currently account for about 20% of global IT spending, that percentage will grow to about 50% in the next four years. MEA spent a total of US$36 billion out of a global total of US$1.4 trillion in 2009, so clearly the region has some way to go before it contributes in any great way to the developing market forecast. But, MEA is acknowledged as one of the key growth regions worldwide for IT infrastructure from broadband network projects in Africa to the technology parks of Dubai.

Stewart Baines
Stewart Baines

I've been writing about technology for nearly 20 years, including editing industry magazines Connect and Communications International. In 2002 I co-founded Futurity Media with Anthony Plewes. My focus in Futurity Media is in emerging technologies, social media and future gazing. As a graduate of philosophy & science, I have studied futurology & foresight to the post-grad level.