Experts: ICT and SMEs are the motor of the European economy 

In a meeting under the auspices of the European Software Association, experts and stakeholders discussed the importance of the Information and Communication Technology (ICT) sector for fostering growth and creating jobs in Europe. Marcel Warmerdam, who is Research Director European IT Markets with IDC , presented a new study on the Economic impact of IT on Europe. The report's key findings were: 

• After the burst of the ICT bubble in the late nineties, the sector will not reach two-digit growth rates any more. It has however experienced another turnaround to the positive, with growth rates around 6% expected from 2006 to 2009 
• This means that the sector will be able to create another 1.5 million jobs on top of the 7.9 million people already working in ICT.
• The fastest growing sub-sector within ICT will be software, accounting for 60% of new jobs and 50% faster growth than hardware.
• Almost one third of all ICT jobs are part of the "Microsoft ecosystem" - companies that offer products running on Microsoft software or servicing and distributing it. This includes 250.000 Microsoft partner companies in Europe, the Middle East and Africa. Only one out of almost nine dollars revenue generated in this segment goes to Microsoft. 

Information Society Commissioner Viviane Reding said that even though Europe is not particularly strong on the global market for packaged software - only three of the world's top 30 software houses are headquartered in the EU - software is a vital market with huge growth potentials. She highlighted spin-off effects for other industries, which she said, all depend on software to increase their productivity and run their businesses. In this regard, she said, it was especially alarming that according to figures she had confirmed by her services, Europe misses 615,000 technicians and engineers before 2008. Commissioner Reding stressed the launch of NESSI as a promising example for making up for Europe's comparative weaknesses in software engineering. 

Microsoft EMEA CEO Jean-Philippe Courtois stressed his company's interest in fostering SME growth, for which, he said, there were good reasons: SMEs account for 57% of economic growth in the EU, and Microsoft can only flourish and sell its products in a growing economy. Courtois stressed the reciprocal dependence of growth, job creation and innovation. He named a few examples of what Microsoft is doing to help SMEs grow, such as investment in research, sharing intellectual property with smaller companies and developing software jointly, helping SMEs to find access to finance and training people to use IT. 

Professor Soumitra Dutta of  Insead pointed out that some competitive advantages of the US are not merely founded in the economy, but also in the culture. He recalled that when he moved to the San Francisco Bay area, coming from India in the 1980s, it took him about one week to feel at home. When he moved to France six years later, it took him about two years. He said the US's ability to attract people from all over the world and make them feel at home was cultural competitive advantage. Another disadvantage of Europe, he said, was the lack of entrepreneurial spirit, which made youngsters feel that the ambition of accumulating wealth was bad in itself. 

Kenneth Thompson, Deputy Permanent Representative of the Republic of Ireland with the EU, commented on the record growth rates of his home country and on the crucial role that the software industry - along with medical appliances - played in achieving this growth. Ireland, he said, consciously sought out the software industry, because it was in its nature export-oriented, which made up for Irelands small domestic market. The country attracted software makers, mainly from the US, but nowadays only 140 out of 900 software makers in Ireland are international companies. They find a friendly environment with only 12.5% of corporate taxes and numerous technology institutes actively looking out for symbiosis. This combination, he said, managed to attract "enormous amounts of foreign investment".

The Wendover-Global Insight IT spending index , drafted by the US-based analyst company Global Insight  and covering industrial customers of IT companies in the US and the United Kingdom, predicts that the high level of IT spending will be maintained in years to come. Surprisingly, the repost found that the contractors and construction industries have taken the lead in spending raises.