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October 4, 2009

IT spending to drive global economic recovery, says study

Expects IT to create 5.8 million new jobs by 2013

By CBR Staff Writer

Information technology (IT) will create 5.8 million new jobs and more than 75,00 new businesses over the next four years, according to research by research firm International Data Corp (IDC) and Microsoft.

The results showed that the expected growth rate for IT employment of 3% a year is more than three times the rate of growth of total employment and an indicator that investing in IT will contribute to economic recovery and growth.

Steve Ballmer, CEO of Microsoft, said: “In this fundamental economic reset, innovative technologies will play a vital role in driving productivity gains and enabling the creation of new local businesses and highly skilled jobs that fuel economic recovery and support sustainable economic growth.

“Countries that foster innovation and invest in infrastructure, education and skills development for their citizens will have a major competitive advantage in the global marketplace.”

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The IDC study, commissioned by Microsoft, has found that IT spending is expected to grow at triple the rate of GDP growth in the 52 countries. Although forecast growth of IT spending is muted since the advent of the global recession, it is pegged at 3.3% per year between now and the end of 2013.

The research showed that spending on software is growing faster than spending on IT overall – 4.8% a year between 2008 and 2013, compared with 3.3% for all IT spending. During 2009, total IT employment in the 52 countries dropped a fraction of a percentage point, yet software-related employment grew 4%.

The emerging countries on the list of 52 – all countries excluding the US, Canada, Australia, Japan, New Zealand and Western Europe will account for only 21% of IT spending in 2009 and 39% of IT-related employment. But, over the next four years, they will account for more than 50% of net new IT spending and 70% of new IT-related jobs, according to the report.

In addition, IDC also estimates that cloud services could add $800 billion in net new business revenues between the end of 2009 and the end of 2013.

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