Forum: ICT investment must continue in tough 2009

Obama's package includes massive investment in broadband, smart metering for electricity networks and a push to develop a single digital health record

Hello and welcome back. We hope you all had a great Christmas and New Year.

Here at Computerworld we’ve been dealing with a number of changes; changes to our format and design, a shift of office, staff changes, a change in our frequency of publication (now fortnightly), along with the ongoing challenge of doing more and more online. For media that’s business as usual.

Many of the stories we have published so far this year have been about layoffs in the global ICT industry. Layoffs numbering in the many thousands. As I write, Nortel has just filed for bankruptcy protection. Looking outside ICT, the financial, property and motor vehicle sectors are also struggling. Retail numbers look increasingly bad.

2009 promises to be hard as companies adjust, as Computerworld has, to an entirely new market environment: one where credit is cheap, but hard to find; where consumers and businesses lack confidence; and where growth banked and value added in earlier financial periods simply evaporates.

But despite all that, I have yet to see a forecast suggesting global spending on ICT will actually fall. I’ve seen some that say it has fallen when measured in US dollars, but when a basket of currencies is used, overall ICT spending is still forecast to increase by around 3%.

Needless to say, the analysts have rapidly backed away from earlier, more bullish, forecasts — and they may yet back away further. Nobody really knows how this economic downturn will play out. For every story that the market has bottomed, there are others suggesting the bottom is still a long way down. A few have even suggested the worst is over, but I find that hard to believe.

In the US, President-elect Barack Obama has presented a stimulus package that forecasts unemployment to reach 10% in 2010, but to recede to around 7% by the end of that year. This means at the end of 2010, the US will be in roughly the same shape it’s in now, but on an upward, rather than a downward trend.

That may mean everything or very little for New Zealand. As we saw in the Asian crisis of the late 1990s, we are not as tied to the US and European cycles as we once were.

In the end, ICT is not a negotiable investment for business or government. Obama’s package includes massive investment in broadband, smart metering for electricity networks and, significantly, a push to develop a single digital health record. In short, it isn’t just about stimulus and job creation, but about transformation, productivity and competitive advantage.

Despite the New Zealand crisis, whatever shape it takes, we will have to continue to invest in ICT and other vital infrastructure. We will either have to transform ourselves or we’ll come out of this trough weaker than we went into it.

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