Transcript IT Outlook - World Trade Organization

WTO Information Technology Symposium
Impacts of globalisation on the IT Sector
Growth and market dynamics in OECD countries,
China and India
Graham Vickery
OECD
www.oecd.org/sti/ito
[email protected]
Wednesday, 28 March 2007
1
Overview – ongoing restructuring

Growth in the ICT supply side is sustained and
expected to continue across all segments

Growth more balanced across OECD. ICT supply
growth more sustainable than late 1990s. Highest in
Internet-related applications and support systems

Non-OECD and Eastern Europe supply and markets
growing much faster and taking larger share

Drivers are shifting from technology push =>
commercial applications and new uses. User-driven
applications increasingly important

Challenges for ICT policy to build competitiveness
2
IT industry - developments and outlook

Recent developments
– Output and markets robust in the US. Now stronger in
Japan and Europe. Other Asian countries growing rapidly
– ICT markets: OECD share down 2000 89% => 2006 83%
– Non-OECD countries (incl. Russia, India and China) took
13 of top 15 market growth positions 2000-2005

Top 250 ICT firms (over ½ of global ICT industry)
– Growth across the board. Revenue growth 2000-2005:
Total 250 firms 23.5%, OECD 20%, India 680%, Chinese
Taipei 200%, Singapore 132%, Hong Kong-China 100%,
South Korea 28%
– China and India increasingly important. Their growth
currently driven by foreign investment and sourcing
3
Structural change and adjustment

Structural change in the ICT sector
– Late 1990s 20-30% annual OECD growth
– 2000s slower. Many products => commodities
– Rapid growth: new / niche products, software and
services, and Emerging Markets (E. Europe, Asia)
– ICT R&D dynamic although signs of slow-down

Major adjustment pressures
– Open source (the “Linux effect”)
– Online delivery of IT services (the “Google” effect)
4
ICT sector increasing share of GDP
Share of ICT valued added in business sector
1995 and 2003, percentages
%
2003
1995
18
16
14
12
10
8
6
4
2
0
Source: OECD Information Technology Outlook 2006, SNA compatible
5
Top 250 firms rebound
Performance trends 2000-05
Current USD, index 2000 = 100
Revenue
Employment
R&D Spending
125
120
115
110
105
100
95
90
85
80
2000
2001
2002
2003
Source: OECD Information Technology Outlook 2006
2004
2005
6
And they increase R&D intensity
Top 250 ICT firm R&D intensity by sector, 2000-05
R&D spending as a share of revenue, percentages
2000
2005
Software
Comms equipment
Electronics &
components
IT equipment
Services
Telecommunications
0
2
4
6
8
10
12
14
16
7
Source: OECD Information Technology Outlook 2006
The shift to Asia
World semiconductor market 1990-2005
USD billion, current prices
North America
Japan
Europe
Rest of Asia
250
200
150
100
50
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
Source: OECD Information Technology Outlook 2006
2000
2001
2002
2003
2004
2005
8
ICT globalisation and trade



New wave of global restructuring of ICT production
– Global restructuring of ICT production
– ICT sector a leader in international trade and M&As
9% of business VA, 13% of goods trade, 20% of M&As
Trade in ICT goods: new highs
Trade in ICT services: growing strongly
– Ireland leader in computer and information services exports
(still number 3 in packaged software)


ICT FDI and M&As high: Business cycle effect
M&As: ICT and comms services continued high share
– Some shift to Eastern Europe and non-OECD
9
ICT goods trade has tended to increase
Share of ICT goods in total goods exports, 1996-2004 Percentages
35%
1996
2004
30%
25%
20%
15%
10%
5%
0%
10
Source: OECD Information Technology Outlook 2006
And grow in all segments
OECD trade in ICT goods, 1996-2004
USD billion, current prices
Communication equipment
Audio & Video equipment
IT & related equipment
Other ICT related goods
Electronic components
1 800
1 600
1 400
1 200
1 000
800
600
400
200
0
1996
1997
1998
1999
2000
2001
2002
2003
2004
11
Source: OECD Information Technology Outlook 2006
With new trade competition
ICT goods exports 1996-2004
Current USD, 1996 = 100
China
Mexico and Eastern Europe
Other OECD
1 000
900
800
700
600
500
400
300
200
100
1996
1997
1998
1999
2000
Source: OECD Information Technology Outlook 2006
2001
2002
2003
2004
12
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New sources of trade – ICT-enabled services
Exports of computer and information services and business services
Percentage of world totals
%
10
1995
2004
14
12
exports
8
6
4
2
0
Source: OECD Information Technology Outlook 2006
13
Exports of computer and information
services and business services
Billion current USD and share of GDP
4
10
2
0
0
Ch
i
Ire
lan
Ge
rm
Source: OECD Information Technology Outlook 2006
14
Ja
pa
n
20
US
6
na
30
Ch
i
8
2004
Ca
na
da
Fr
an
ce
40
an
y
10
Ge
rm
50
Ire
lan
12
Ca
na
da
60
In
dia
14
na
70
Ja
pa
n
16
d
Fr
an
ce
80
an
Ne
y
th
er
lan
ds
18
UK
90
US
1995
% of GDP
In
dia
2004
UK
1995
Ne
d
th
er
lan
ds
bns current USD
Employment potentially affected by ICTenabled services offshoring
Share of employment 1995-2004
EU15
%
USA
CAN
AUS
20.0
19.5
19.0
18.5
18.0
17.5
17.0
16.5
1995
1996
1997
1998
1999
2000
Source: OECD Information Technology Outlook 2006
2001
2002
2003
2004
15
China and ICTs

China increasingly important in production and trade in
ICT goods and services

Strategy: Host foreign ICT firms or third-party contract
manufacturers (unlike Japan and Korea)

Chinese ICT firms developing rapidly despite relatively
limited size and technological know-how. Investing
overseas to obtain technology, brands and distribution

ICT industry must make transition from low-cost
manufacturing to higher value-added products

Services high potential, but not yet
16
China biggest ICT goods exporter in 2004, and
increasing
Imports and exports, billion current USD
United States Imports of ICT goodsEU-15
China (excluding Hong Kong)
Japan
Korea
300
United States
EU-15
Korea
China (excluding Hong Kong)
Exports of ICT goods
Japan
300
250
250
200
200
150
150
100
100
50
50
0
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
1996
Source: OECD Information Technology Outlook 2006
1997
1998
1999
2000 2001
2002
2003
17
2004
2005
China imports components and exports
computers, telecoms, audiovisual equipment
Trade balances, billion current USD
80
60
1996
40
1997
1998
20
1999
-100
2000
Other ICT goods
-80
Audio&video
equipment
-60
Electronic
components
-40
Computer&related
equipment
-20
Telecommunication
equipment
0
2001
2002
2003
2004
2005
Source: OECD Information Technology Outlook 2006
18
China deficits with Asia, surpluses everywhere else
Billions
Trade balances, billion current USD
55
45
35
25
15
Source: OECD Information Technology Outlook 2006
Chi nes
e Tai pe
i
Kor ea,
Re p. o
f
Mal ays
ia
J apan
Thail an
d
Indi a
Aus tr a
li a
USA
Si ngap
or e
-25
EU_1 5
*
-15
Hong K
-5
ong
5
19
Rising to the challenge?
IT policies for growth and competitiveness

Co-ordination and priority setting

Promoting ICT R&D and innovation

Increasing business use (and improving
government efficiency via e-government)

Expanding ICT skills and employment (education)

Digital content

Enhancing network infrastructure (broadband)

ICT business environment (IPRs)
20