IT is key to improving competitiveness of UK companies

IT is one of the main ways UK companies can close the productivity gap with the US and leading European economies, according to a...

IT is one of the main ways UK companies can close the productivity gap with the US and leading European economies, according to a series of Department of Trade & Industry reviews on how to improve the competitiveness of UK industry.

A policy paper, due out during the next few months, will outline the government's strategy for boosting technological innovation, encouraging companies to invest more heavily in research and improving links between business, science and technology.

The DTI said it is also keen to encourage companies and staff to "transfer knowledge" more effectively.

Some IT industry groups have welcomed the review, hailing it as a sign that Whitehall is taking IT seriously.

"The government has realised that IT is the key to innovation and productivity in the UK and global economy," said Beatrice Rogers, head of private sector at suppliers' group Intellect. "This could be the first step on the road towards a more joined-up government view of IT and its limitations."

Other industry observers questioned whether the DTI reviews would produce significant benefits for IT departments, suppliers or industry.

"Based on the past performance of these reviews, it will have little effect on the IT industry," said Richard Holway, chief executive at analyst firm Ovum Holway.

"One thing that does make a difference is getting people to invest more in IT at the start-up stage and through stock market investments. If investment continues to be in the doldrums at a global level, there is very little the government can do."

The government has attemp-ted to stimulate IT investment through tax relief for research and development, but some experts believe this relief has had a limited effect because of difficulties in defining what kind of IT investment qualifies. A DTI comm-ittee is addressing the issue.

The government's plans for IT   

The DTI's strategy for raising productivity in the UK 

The DTI is proposing a five-year strategy focused on transferring knowledge and ideas between technology, science and business; maximising the potential of the workforce; improving skills; and strengthening regional economies. Officials are also talking about a new "technology-focused business strategy".   

Trade and industry committee review of knowledge economy 

A DTI committee is reviewing progress towards the government's objectives set out in 1998 in the white paper "Our competitive future: building the knowledge-driven economy". Challenges outlined included developing e-commerce and the necessary scientific skills and knowledge to underpin the new technologies available to industry.   

The DTI's "Innovation review: action for the future" 

This review, due out in the next few months, covers similar ground to the DTI's strategy announcement. It follows consultation with industry and outlines the government's role in encouraging technological and managerial innovation and aims to boost the UK's productivity.

Read more on IT for small and medium-sized enterprises (SME)

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