ICT accounts for 50% of EU productivity growth

ICT is driving almost 50% of the EU’s growth, said an annual European Commission report on the digital economy.

ICT is driving almost 50% of the EU’s growth, said an annual European Commission report on the digital economy.

Public and private investment in ICT “is bearing fruit”, said the Commission's annual progress report on i2010 – the Commission’s digitally-led strategy for growth and jobs.

Technology is fuelling innovation and productivity, and there are signs of fundamental change in markets and user behaviour, as Europe moves towards a knowledge-based economy, said the Commission.

"Our integrated European policy for growth and jobs is now starting to pay dividends," said Viviane Reding, EU commissioner for information society and media.

She warned however, “Let's not be complacent though. ICT companies in Europe are still not able to profit from economies of scale in view of regulatory fragmentation that blocks the emergence of pan-European services, and hurts the chances of e-communication operators and software companies to compete on the world market.”

She said that the EU and its member states need, in particular, to make a greater effort to remove the remaining impediments within the internal market for online services.

The report found that ICT contributed nearly 50% of EU productivity growth between 2000 and 2004, with software and IT services currently the most dynamic growth area (5.9% for 2006-2007).

The report also shows that businesses are investing in new and more mature ICT solutions, and Europeans are quickly embracing new online services.

This is supported by a record number of new broadband connections, with 20.1 million new broadband lines connected in the year to October 2006. There are high broadband penetration rates in The Netherlands (30%) and the Nordic Countries (25-29%).

The online content market is forecast to grow rapidly over the next five years, as already seen with the explosive growth of online music sales and user-created content, said the report.

At a national level, the report reveals that Italy leads in 3G mobile phone and fibre development, while the most households with digital TV are in the UK.

Six countries – Denmark, The Netherlands, Finland, Sweden, the UK and Belgium – all have higher broadband penetration rates than the US and Japan.

Recruit women or face IT skill crisis, says European Commission
Comment on this article: [email protected]

Read more on IT jobs and recruitment