BDO hosted its annual Technology & Telecoms Economic update on 24 February. Douglas McWilliams, Chief Executive of Centre for Economics and Business Research gave his short and medium term predictions together with his future forecasts for the industry.
Britain has the most online based economy in Europe and by 2016 one pound in eight will be spent online. In Q2 2011 over 55% of clothing and footwear was bought online by 25-34 year olds and almost 40% of 55-64 year olds purchasing similar items.
However, despite the move to online and the direct benefits it can bring to many technology and telecoms businesses, many companies are still struggling in the wake of slashed Government and corporate IT expenditure as austerity measures take full effect. However, although Government IT expenditure shows no sign of increasing again soon, corporate expenditure – particularly on hardware – is once again on the rise as businesses which significantly underspent on IT during the recession are now looking to upgrade their systems.
One of the biggest trends we will see over the next few years however is the shift to virtualisation technologies. Studies show how cloud computing can make businesses more efficient and productive, generating jobs and enhancing growth. Technological advance (like the cloud) can help Europe meet the growing challenge of maintaining competitiveness towards the emerging economies and has the potential to improve employee efficiency by an average of 2.1%. Furthermore, the cloud also allows businesses to gain a technological edge against their competition without the additional expense of expensive hardware updates.
Recent studies show that small businesses in particular are realising the benefits that cloud computing can bring to their businesses, with 25% planning to adopt the cloud soon compared to just 10% of businesses overall. Furthermore, even SMEs in the “less tech savvy” manufacturing and retail sector are now considering adopting cloud technologies after initial aversion of the technology.
In conclusion, Douglas predicts that whilst world growth is set to slow in 2012, the energetic and innovative nature of technology and telecoms businesses has the potential to propel the sector to the forefront of the nation’s economic recovery.
For further information on how BDO can help your business in the TMT sector please contact Julian Frost