Six trends that could shape the global information technology industry

Several of the trends, the report concluded, would carry a heavier impact than other, however.

By DAVID YANKELEWITZ
April 5, 2006 07:49
1 minute read.

 
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Six upcoming economic trends are set to seriously impact the global information technology industry, posing both challenges and opportunities for information technology companies in the Americas, Europe, the Middle East, Africa and Asia, a recent report revealed. "Trends 2006: Six Economic Shifts Affecting IT," a report released by Forrester Research, predicted that trends including higher oil prices and global warming, increased natural disasters and terrorist attacks, aging populations, the cooling of the real estate boom, higher inflation and interest rates, and finally, increased technology globalization coupled with decreased global trade, would all have an impact. Several of the trends, the report concluded, would carry a heavier impact than other, however. For instance, higher worldwide oil prices, according to the report, will squeeze profit margins for industries and countries that rely heavily on oil and natural gas, likely leading to reductions in their IT budgets. On the other hand, energy producers such as oil and gas companies and deregulated utilities would experience higher revenues that could increase their IT spending. Similarly, Forrester said, an increase in natural disasters (such as destructive hurricanes, tsunamis and earthquakes), plus more frequent terrorists attacks, could result in increased IT spending worldwide in relation to disaster recovery, operational risk management and redundant communications systems. Another potentially influential trend, the report said, was rising technology globalization, coupled with declining international trade. This was predicted to challenge IT vendors in industrialized markets such as The US, Europe, and Japan, because IT buyers will increasingly find low-cost, quality offerings from up-and-comers such as China and India. And, if trade globalization continues to slow, the report predicts that vendors from industrialized countries will have even more trouble exporting their services to developing countries. Overall, IT growth in the US was seen as most vulnerable to the six global trends, according to the report, followed by European countries and then Africa and the most industrialized Asian countries. The Middle East, on the other hand, and rising Asian countries such as China and India, should benefit, Forrester said. Israel was not mentioned specifically in the report.

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