European IT specialists are stretching out in business class and
anticipating greater remuneration in the west. Given the state of
the old world's new economy, who can blame them? asks Lindsay
Nicolle
Europe and the US's love/hate relationship with immigrants is
again being put to the test over the increasing brain-drain of
skilled IT professionals from Europe to the country they see as the
"promised land". The steady haemorrhage of talented IT people
raises questions about Europe's future as a major power in the
global digital marketplace.
But as they fly over Ellis Island heading for the US West Coast,
defecting European analysts, programmers and Web technicians are
unlikely to spare a thought for the economic repercussions of their
actions in the lands they've left behind since the lure of the
dollar is just too great.
History is repeating itself as these talented people tread a
well-worn path. They follow in the footsteps of yesteryear's
European emigrants who went to the US in the first half of the 19th
century in search of a better life. Their hopes and dreams are made
of the same stuff as those earlier, desperate people. However,
other than their flight, their situations cannot be compared.
Today's European IT staff earn good money - very good money, in
fact. They also get a lot of perks, not least being the joy of
possessing a skill in such demand that there are on average five
employers chasing every jobhunter, according to research by
recruitment firms.
However, as everyone knows, you only value your lot if it
measures up against what your peers are getting, and the fact is
that European computing professionals get a raw deal on money and
share options when compared to their American counterparts.
It's all too easy to resolve this situation simply by catching a
plane west. And that's exactly what Europe's IT elite are doing,
according to UK entrepreneur Alex van Someren, founder, president
and chief executive of nCipher the e-business security firm.
"There's a flow of European IT people emigrating to the US to
work in the new economy because the remuneration they can get, plus
incentives like share options, are vastly superior and taxed less
heavily," he says. "It's a significant issue and one that EU
countries have been slow to address."
Many Europeans also leave the Continent in retaliation for
having to pay two lots of national insurance - one to their country
of origin and one to the country in which they work. Solutions to
this problem are still being debated by individual EU member
states.
Meanwhile, promoting job opportunities in the knowledge economy
is a central part of the EU's employment strategy and critical to
Europe's future development, according to the European employment
commissioner, Anna Diamantopoulou. She says that by 2010, jobs in
industries that depend heavily on information and communication
technology will account for half the total in Europe.
This raises the question of how will workers acquire the
necessary skills? Without a Europe-wide plan of action the shortage
of IT specialists in western Europe could reach 1.6 million
equivalent jobs by 2002 - at a time when average EU jobless figures
are still nearly 10% and employment rates for women well below
those for men, says Diamantopoulou.
Europe clearly has a large pool of untapped labour that it could
harness for the digital age - not to mention the 81 million
Europeans currently in education. This Internet generation could
give Europe the opportunity not only to thrive in the global
marketplace, but also to seize the lead.
So far, Europe is managing to hold its own against its global
competitors, despite the continuing loss of good people to the US.
The UK is doing particularly well.
Research confirms that UK.com is vying for the lead in
e-business adoption with the US, with forecasted sales of $65bn
(£43bn) by 2001, according to a survey of 700 companies in Europe
and the US by Mori for Intentia, the enterprise applications global
software group. Respondents were drawn exclusively from board
directors - 100 each in the UK, France, Germany, Sweden and Spain,
and 200 in the US - with responsibility for e-business or business
development strategies.
The UK forecast is equivalent to 15% of total sales, and almost
5% of GDP. This compares with an average 12% of total sales in
Europe as a whole (equivalent to $152bn), and 14% in the US
(equivalent to $118bn) - almost 1.5% of GDP.
Companies have also set ambitious targets for return on
investment (ROI) by 2001. In Europe, companies expect to achieve an
average 20% ROI, and in the US 27%. In the UK companies anticipate
an average 23%.
Moreover, confidence remains high in the outcome of an
e-business market on the verge of a massive explosion. UK firms
lead the pack in acknowledging its future importance (64%), ahead
of Europe (55%) and the US (60%).
However, while e-business is on course to become a major
competitive weapon for Europe against the world, there are some
intimidating hurdles to clear in the development of digital
commerce by EU countries before it will really fly. The three most
cited obstructions are:
- time taken by customers and suppliers to adopt
e-technology
- concerns about the security of financial transactions
and
- worries that competitors, customers or suppliers will gain
unauthorised access to information.
"There also needs to be harmonisation of the individual ways
businesses have to interact with local national governments," says
Eduardo Loigorri, managing director of financial software developer
Exchequer Software. "There are still major problems with a UK
company actively selling into Europe, such as VAT levels.
Increasingly, each country wants its slice of VAT revenue and is
starting to impose horrendous reporting burdens on pan-European
companies."
One approach could be to revise tax policies to favour more
pan-European high-entrepreneurship, along the lines of Chancellor
Gordon Brown's revisions to UK tax policy in his last Budget
speech. Clearly, Europe must act quickly otherwise the transparency
of price so eagerly sought by the creators of the euro - and by
consumers - will never materialise.
It seems that the Single Market remains very much in name only,
but the jury is still out as to the outcome of the displacement of
jobs and capital which is accompanying the growth of Europe's
information marketplace.
The longer we have to wait, the more planes will take off
carrying away a little more of Europe's IT future. As with many
farewells, the situation can only end in tears.