OECD Information Technology Outlook 2010
Information technology (IT) and the Internet are major drivers of research, innovation, growth and social change. The OECD Information Technology Outlook 2010 analyses the economic crisis and recovery, and suggests that the outlook for IT goods and services industries is good after weathering a turbulent economic period better than during the crisis at the beginning of the 2000s. The industry continues to restructure, with non-OECD economies, particularly China and India, major suppliers of information and communications technology-related goods and services.
The role of information and communications technologies (ICTs) in tackling environmental problems and climate change is analysed extensively, with emphasis on the role of ICTs in enabling more widespread improvements in environmental performance across the economy and in underpinning systemic changes in behaviour.
Recent trends in OECD ICT policies are analysed to see if they are rising to new challenges in the recovery. Priorities are now on getting the economy moving, focusing on ICT skills and employment, broadband diffusion, ICT R&D and venture finance, and a major new emphasis on using ICTs to tackle environmental problems and climate change.
Publication of the OECD Information Technology Outlook alternates every year with the OECD Communications Outlook (latest edition released August 2009).
ICTs, growth and employment during the crisis
- Global ICT industry shows 3-4% growth in 2010 and the outlook is for continued growth in 2011.
- IT services firms are weathering the crisis much better than manufacturing firms. This benefits firms like IBM and Fujitsu that were hardware producers a decade ago, but have today become largely services businesses.
- The world’s ten biggest Internet firms’ revenues increased by 10% during the crisis year 2009.
- Semiconductors are an exception to the rule and remain a leading indicator of ICT sector performance. See chart: Worldwide semiconductor market by region, January 2007-March 2010
- ICT-intensive employment has grown steadily to make up over 20% of total employment in OECD countries. See chart: Share of ICT-intensive occupations in the total economy, intensive users, 1995 and 2009
- ICT-related vacancy rates have recovered and grew month-on-month by early 2010. See chart: Growth in ICT vacancies, December 2001-February 2010
- Cloud computing should strengthen demand for ICT specialists but it is likely to have more impact on value added and growth than on employment.
Globalisation of the ICT sector
- OECD countries have been increasingly specializing in the provision of ICT services. Around 80% of ICT sector value-added in the OECD is generated by ICT services. This mirrors the shift of ICT manufacturing to Asian economies over the past decade.
- 50% of global trade in manufactured ICT products takes place outside the OECD countries. Chinese companies such as Huawei and ZTE are growing ever more competitive and innovative in emerging markets. See chart: World trade in ICT goods
- ICT firms outside the OECD are becoming major international investors. In 2009, one-quarter (24%) of international M&A deals in the ICT sector were initiated by firms outside the OECD, e.g. China, India, Russia, Arab countries. See chart: Geographic distribution of cross-border ICT M&A deals, 2009
- The global video games industry makes 30% of its USD 50 billion of revenues from “digital content” (downloads, subscriptions, etc.).
- The music industry, with falling revenues overall, is now generating one quarter of its turnover from music downloads, streaming and bundled mobile Internet services. But there is still room to grow: iTunes still only catalogues 11 million songs, compared with 80 million songs catalogued in large industry databases.
ICTs and the environment
- Industry and governments are looking in more detail at “net” environmental impacts of using ICTs.
- The smart grid is an area that can make electricity production, consumption and management more sustainable. For example, it can mitigate the amount of electricity worldwide that is lost – around 8% of the total.
- At the same time the sector needs to address related life-cycle issues, e.g. energy use, electronic waste. Smart electricity meters allow better energy conservation by final customers, but also increase the need for servers, data centres and networks, begging the question of “how green is the Internet?”. See chart: Global greenhouse gas emissions by ICT product categories
- Internet use and consumption of “digital content” also contribute to environmental efficiencies. As one quarter of music consumption today is in a digital form, physical carriers become increasingly obsolete – no need to produce them, ship and drive them around, dump or recycle them.
Government ICT policies
- In times of crisis, there is focus on ICT policies that contribute to innovation and growth: Broadband and innovation promotion, employment creation and skills development, ICTs for the environment. As economies grow digital, security of information systems and networks is higher on the agenda than ever.