The ICT industry is expected to grow by 6% in 2006 and, looking ahead, highest growth will be driven by Internet-related investments, Linux servers, digital storage, personal digital assistants and new portable consumer products. But any return to the heady days of 20% and 30% growth in many products and market segments in the 1990s are unlikely, according to the latest edition of the OECD’s Information Technology Outlook 2006.
ICT trade is also growing even faster than production and sales. There is a shift in manufacturing activities within the OECD area, particularly towards assembly in Mexico and Eastern European. Between 1996 and 2004, total OECD ICT goods trade increased by 6.5% a year, while that of Mexico and Eastern European OECD countries increased by 17.4% a year.
With the emergence of new growth economies in Eastern European and non-OECD developing countries, world ICT spending was up 5.6% a year between 2000 and 2005. China was the sixth largest ICT market in 2005 at USD 118 billion (after the United States, Japan, Germany, United Kingdom and France), although total ICT spending there is still only about one-tenth of the United States but about two and a half times the spending of India (USD 46 billion). ICT spending in non-OECD countries is still more focused on hardware than on services as the basic physical ICT infrastructure is still being built.
After overtaking the United States in 2004 as the world’s leading ICT exporter, China has continued strong ICT exports in 2005 and 2006. China imports electronic components – now increasingly from other Asian countries – while exporting computer and related equipment, but technically more complex activities, such as design and testing and R&D, are also increasingly shifted to China. Chinese ICT firms are rapidly developing their production and export capacities despite their relatively limited size and technological know-how, and they are investing overseas (including in Eastern Europe) to obtain technology, brands and distribution channels.
However, most Chinese ICT firms remain small compared to the largest global ICT firms. Technological and management gaps between Chinese and foreign firms, weak innovative capabilities and too great reliance on foreign technology are contributing factors, and R&D capacities will have to be boosted many-fold to catch up with global leaders from the US, Europe, Japan and Korea.
These are among the findings of the OECD’s Information Technology Outlook 2006, which reviews trends and developments in the IT industry and its impact on the economy and society.
This edition includes analysis of the continuing internationalisation of the IT sector, developments in ICT-enabled international sourcing, with a focus on India, and the growth of the IT industry and Internet in China.
Other chapters cover digital content, skills and employment issues, emerging technology applications, such as location-based services, and a review of policy developments and priorities in OECD countries.
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