Which future for ICT?

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Presently, the Information and Communications Technology (ICT) sector represents 4.8% of the EU economy. According to the forecasts, the investments in this field will increase by about 25% under Horizon 2020 compared to FP7. This year, for instance, more than 1 billion Euro will be available. Research and development (R&D) in ICT technologies can produce concrete benefits for the citizens.

Recently, a report highlighted the importance of Unlocking the ICT growth potential in Europe, especially as regards mobile broadband, cloud computing, Big Data and Internet of Things. As reported in the document, four scenarios show that ICT could be a major source of growth for the EU, which was estimated by The Conference Board in 2013, but also using the paper of van Ark et al. (2013).

The first scenario is the digital savannah. A fragmented EU market makes it difficult for firms to grow beyond EU borders. Many companies can also be eventually acquired by US or non-EU (above all Chinese) multinational corporations. The prices remain high in spite of the niche opportunities created by the fragmentation of the markets. GDP growth in Europe does not accelerate much beyond 1.1%, with limited ICT's effects (around 0.2%).

The second one is the digital rainforest. An integrated EU market leads nation-based firms to venture across borders. EU-based global firms can compete in a growing global economy. The prices are quite low with a discreet choice for products and services. European GDP growth accelerates to 2.5% with a significant ICT contribution (1.5% point).

The third one is the digital desert. A slow global economic growth of 3% leads to a contracting economic environment. The firms can prosper beyond national borders and part of them may be acquired by non-EU multinational corporations. GDP growth in Europe drops to 0.8 %, with ICT effects limited to less than 0.1% in absolute terms.

The last one is the digital glasshouse. The EU market is integrated and nation-based firms can operate also across borders, competing in a glocal market. However, because of a slow growth, the citizens have more difficulty accessing highest quality goods and services at lowest prices. Finally, EU's GDP growth does not accelerate at more than 1.1%, despite the ICT effects increase to (0.4% point).

Recently, Paul Timmers, Director of Sustainable and Secure Society in DG Connect, spoke about the funding opportunities in ICT for societal challenges in the Horizon 2020 framework programme. His video was the first of a series of seven, each one explaining the funding opportunities for different societal challenges.

What about Italy? As reported by SIRMI on February 6th 2014, the market of Digital Technology in our country is still in decline in all its components, showing a decrease of around 4% in the fourth quarter of 2013 and 5% for the full year. The decline invests in similar measure ICT and the field of telecommunications (TLC), which decrease respectively of 4.3% and 4.0%. In the first sector, the hardware component suffered a decrease of 4.0%, more than the software unit (-2.6%). In the other field, the mobile component was much penalized (-5.0%), more than the fixed telephony services (-2.6%).

The data show that the evolution of the ICT market was heavily influenced by the economic and financial crisis, the processes of spending review, the programs of rationalization and consolidation as well as the down pricing competition due to the non-EU multinational corporations. However, SIRMI predicts for 2014 a reduction in the percentage decrease, which will increase from -5% in 2013 to -2.3 % in 2014. In particular, the IT market is expected to rise from -4.1 % to -1.0% while the TLC will increase from -5.4 % to -3.0% approximately.

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