Study shows IT industry growing faster than rest of economy

Brussels, 23 April 2002

Growth rates for information technology (IT) industries in the majority of EU Member States overtook those of the economy as a whole between 1995 and 2001, according to a study by IDC (International data corporation).

The survey, carried out for Microsoft Europe Middle East Africa (Microsoft EMEA), covered nine EU Member States - Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain, Sweden and the UK - which together account for 93 per cent of IT spending in Europe.

The study discovered IT growth rates of between 9.2 per cent and 15.3 per cent per annum. IDC expects these rates to grow to between 31 per cent and 56 per cent between 2001 and 2005.

The survey also reveals the high contribution the IT industry makes to government incomes, with 15.6 billion euro of tax revenue being provided in 2001. IDC believes this figure will rise to 21.2 billion euro by 2005.

A separate study carried out by Oxford Analytica in Ireland and Estonia demonstrates how public policies can play a role in the development of the IT industry. In both countries, measures to attract foreign investment played a part in the growth of the industry.

Microsoft EMEA also suggests that efforts by the Estonian government to open the telecoms market to competition are the main reason why it has the region's highest Internet penetration rate. It attributes the success of Ireland, however, where the IT industry generated 29 per cent of GDP in 1999, to the flexibility of the labour market and low corporate tax rates.

CORDIS RTD-NEWS/© European Communities, 2001