The IT sector is expected to recover to pre-recession levels as early as next year, but the growth will mostly come from non-traditional geographic areas, says Gartner.
The global economy is starting to recover from a global recession that led to the collapse of many large companies, among them US banking giant Lehman Brothers, towards the end of 2008.
However, despite concerns of a possible double dip in the future, which would set back the recovery process, Gartner is bullish that the sector will recover.
Peter Sondergaard, Gartner's global head of research, told delegates at the 2010 Gartner Symposium, in Cape Town, yesterday that the sector will hit levels last seen in 2008 as early as next year.
Sondergaard says the IT sector will see growth levels that will exceed those of most other industries.
Growth leaders
However, the growth is more likely to come from emerging economies, as developed countries are expected to return to pre-recession levels more slowly, and are still plagued by high unemployment and debt, he says.
The 5 new realities of IT
As Outlined by Peter Sondergaard, SVP of Gartner research, in his keynote addresses at this year's Gartner Symposium in Cape Town, yesterday.
1. Most future investments will be funded from cost savings obtained from existing IT operations.
2. How we innovate with IT is changing, with R&D now playing a much less significant role but social media initiatives becoming a serious focus of attention.
3. 'Risk' trumps 'ROI” when investments are prioritised, where issues such as the risk of doing nothing are analysed along with the opportunity costs that may arise. In addition, the line between IT risk and business risk is disappearing.
4. Divestment from old applications matters as much as investment in new and/or replacement applications since there is always a price for delay.
5. Value measures must show the business impact. In the new thinking there are no IT projects, only business projects.
- Compiled by Paul Booth
North America, for example, will see economic growth of 3% next year, while Europe is only expected to hit 1.7%. These are the territories that were hardest hit by the recession. Emerging markets will fare better, says Sondergaard.
Africa, an important region for IT growth, is expected to reach gross domestic product growth of 5.1% next year and Asia should reach 5.2%, says Sondergaard. He expects Africa to be a key driver of technology innovation in the next few years.
Rene Jacobs, Gartner Africa MD, says some of the best economic growth across the globe will come from Africa in the next few years. She points out that the continent was not as affected by the global recession as developed economies.
Jacobs says there has been a marked increase in the number of players entering the African market, and foreign direct investment doubled between 2003 and 2008. Last year, investment into the continent slowed, but is expected to rebound this year, she adds.
The continent is seen as an opportunity to expand, and is right on SA's doorstep, says Jacobs. She adds that SA has an opportunity to capitalise on the acclaim the country received after successfully hosting the Soccer World Cup.
Revenue challenge
However, Sondergaard cautions that the environment has changed, and CEOs want to see revenue growth coming through. He says the CIO's role will be to drive revenue growth for their companies over the next 20 years. “CIOs that lead going forward... will have to focus on generating revenue.”
CIOs are faced with driving revenue growth, while balancing cost pressures, managing risk and innovating, Sondergaard says. He points out that CFOs have influence over 77% of IT spending decisions.
Sondergaard adds that innovation is no longer just about research and development, but about business innovation, to which IT contributes. Jacobs notes, however, that innovation requires top-level buy-in to succeed.
* Nicola Mawson is being hosted courtesy of Gartner.
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