No green shoots, but some fields of promise

First, the bad news. Green shoots of recovery in the IT market and profession we don’t have. The latest quarterly survey of appointments, data and trends, published in this week’s issue, reveals IT facing continuing decline, with salaries falling.

The permanent market is now at its lowest level since 2004, while the contract market is down to its 2003 level.

However, there are some trends afoot that promise a brighter future. One is that investment in innovation is surprisingly robust. Another is that, in a new twist on the globalisation narrative, Indian suppliers are heading west in search of new recruits.

Around 40% of IT directors are bucking the trend of battening down the hatches in the recession by spending more on new IT projects. This savvy minority is aiming to cast technology more than ever as a driver of growth.

Moreover, 17% of 1300 European IT executives polled by Harvey Nash are investing more than 15% of their budget in clever new ways of using IT. Eighty-six per cent of them have been asked by the business to focus on technology innovation that will claw out a position of competitive advantage for the upturn.

So far, so upbeat. More interesting still is a strategic move by Indian IT service providers to increase their number of European and US employees as the advantages of the offshore/onshore model diminishes and as protectionism spikes.

Wipro, for example, says it wants to increase its western workforce. At present only 8% of its workforce is outside India.

Indian suppliers are tiring of a model whereby they fly Indian nationals to western countries for short bursts of time. Clients are demanding a level of continuity to which the model is inimical. Also, more Indian companies are employing locals for account management and relationship management roles. They will find such recruits among the ranks of the recently redundant in IT markets like the UK’s.

Ultimately, companies such as Tata Consultancy, Wipro, and HCL may come to be transnational as IBM. It is a complex and evolving picture.