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Euler Hermes
Economic Outlook no. 6 | 2011 - Global Sectors Review
Global risk
Information and communications technology
B
Forced to innovate
Overview: catching up with long-term trends
The world information and communications technology (ICT)
market (comprising IT and telecoms equipment and services)
posted turnover in excess of $2.9 trillion in 2010, an increase of
around 2%, indicative of the sector’s gradual emergence from
the crisis. Part of this growth is simply a catching up,
particularly in investment and equipment, with activity in the
services segment having been better protected during the
crisis. Equipment, however, accounted for no more than 25% of
the market. By region, North America and Europe, each
represent 30% of the market, while Asia Pacific accounts for 27%
and boasts a far higher growth rate. A special feature of the
sector is its stunning capacity for innovation in new
technologies, some of which do not achieve their hoped-for
success, such as WiMAX (Worldwide Interoperability for
Microwave Access) or mobile television.
Current situation: windfall for investment
To help it to emerge from the crisis, the sector benefited from
special assistance received under stimulus plans. The revival in
its activity is still very gradual considering the importance of
this sector in employing a large number of people and
contributing to economic growth and productivity. The weak
growth in the sector, at a time when economies are reviving,
suggests that its driving role in the economy diminishes as
nations develop. The sector suffers from the high ownership
levels now achieved in America, Europe and emerging
countries, irrespective of the differences between them. New
investment acts a windfall for an industry in need of new
sources of revenues, helping it to introduce new technologies
and pursue better growth than enjoyed by the economy at
large.
Outlook: upturn sustained by new growth markets
Recovery in the ICT sector will continue worldwide in 2011, with
likely growth of 3.5%, and growth at possibly twice that figure in
some markets. Once more, growth in the sector will be driven
primarily by the emerging markets. Also fuelling market
growth will be the roll-out of new growth activities: for
example, with Long Term Evolution (LTE) technology in
network infrastructure in response to the growing data traffic
needs of mobile internet access, the still ongoing process of
server virtualisation, and new mobile phone applications.
Services will continue to benefit from the strategy of
outsourcing these activities, with a confirmed contribution
from cloud computing. However, the catch-up in IT equipment
investment could later give way to a stabilisation in that
segment._DM
Major companies
Rank Company Nationality Turnover 2010 Change
USD billions 2010/2009
1 HP USA 126 11%
2 A&T USA 124 1%
3 NTT Japan 120 9%
4 Verizon USA 107 -1%
5 IBM USA 100 4%
6 Toshiba Japan 75 9%
7 Microsoft USA 62 7%
8 Nokia Finland 57 -1%
9 Cisco USA 40 11%
10 Ericsson Sweden 28 4%
Source: companies
The ICT market
USD billions 2010 Change 2011 (f) Change
North America 890 2,6% 910 2.3%
Europe 914 0,3% 932 2.0%
Asia Pacific 758 3,6% 796 5.0%
Rest of world 362 7,9% 387 7.0%
Total 2,923 2,8% 3,025 3.5%
Sources : IDATE, Euler Hermes forecasts
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