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Analysis of ICT Market in the UK - Case Study Example

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The paper "Analysis of ICT Market in the UK" states that the United Kingdom's economy faced challenges from 2012 to 2013, but inward investment in the ICT sector has positive impacts on it. The ICT market in the UK is one of the largest markets in Europe…
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Analysis of ICT Market in the UK
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Analysis of ICT market in UK College Number d Analysis of ICT market in UK Introduction (scope of essay, background) UK economy faced the problems of reduced spending and weak consumers’ demand in years 2012-2013. These problems have aroused from Eurozone crisis and austerity measures of government. Positive signs have been seen in those sectors, which embraced the usage of information communication technology (ICT) to reduce costs and drive up the efficiencies. A number of events have led the major changes for ICT sector in UK for last three decades. These changes have occurred from external as well as internal events. The British Telecom, Cable and Wireless were privatized in the era of Conservative government in 1980s. The Vodafone and Telefonica-O2 were newly licensed in the same Conservative government. It produced the far-reaching variations in ICT sector of UK. It stimulated the competition and enabled the mobile manufacturing companies to make the innovative products. During the same time, Asian and Eastern Europe countries had become capable to compete in manufacturing the electronic products in market. In reply to this electronic growth, ICT sector of UK concentrated on the software services. ICT sector was much focused to develop the new software instead of making the new hardware. ICT industry in UK is concentrated with most famous fifty companies of the world. On other hands, there are 95000 small level firms. The smaller firms are micro-business with fewer than ten employees. Software design, IT management, IT consultancy, IT reselling and distribution are key activities of ICT market in UK. This paper is focused upon the market analysis of ICT market in United Kingdom. ICT market analysis in the perspective of sub-sectors particularly education and why small medium enterprises (SMEs) are slower in full adoption of ICT in UK? Along with this impacts of ICT on education sector of UK has been also analyzed. Literature Review Literature review is aimed to summarize ICT market analysis in UK. Market analysis allows seeing the technology impacts on different sectors varying from education to SMEs for their businesses. Review will help to identify the areas, where ICT has impacted positively and investigate the areas which are less or negatively impacted. The ICT market as a whole in UK is most attractive for foreign companies to invest in ICT goods and services. UK’s legal framework is supportive for business in ICT sector. Increased appetite of consumers in UK for technology supports the build up and growth of UK’s marketplace (UK Trade & Investment, 2009). In a report  Middleton (2014) identified that a strong link existed between economic growth and ICT globalization. It is found that ICT has generated the 21% GDP in developed countries of the world in the last five years. In the same report it is also pointed out that UK leads in globalization of ICT sector. However, this development is influenced by the foreign direct investment (FDI) in ICT sector of UK. It is also claimed that UK IT companies are not heading instead of foreign companies are taking over the UK local IT companies. Key Market Issues Public sector’s low spending has negatively impacted the communication and technology market. Although, UK’s public sector is the largest procurer of the technology products. Tight business situations are compelling the SMEs to postpone their investment in ICT beyond 2013. Uncertain economic conditions have forced the government to fix the allocation of budget on the internal development as compared to year 2012. Intentions of UK’s enterprises to rationalize the cost of infrastructure have created concerns for vendors in the ICT sector (Reuters, 2013). Firm size and ICT adoption have a close link and success of ICT depends upon the size of a firm. Like France and Italy, SMEs have shown well performance in UK but in the rudimentary fashion. High initial set up cost to harness the ICT by SMEs have great challenges. Other problems also include the issues in payment mechanism, lack of strategic focus and low use of credit cards (Nandan, 2012). Livingstone (2012) in an article reported that at homes as well as in schools, ICT has been widely used for teaching and learning purposes in UK. It has made them to fuel rapid diffusion of ICT in the developed societies. However, this diffusion of ICT is slower than in colleges and universities. Use of ICT in classrooms is also increasing in the forms of interactive whiteboards, educational computer games, virtual learning and high reliance upon the internet application. This increase has been widely observed in independent study via e-learning and emails. Critics of ICT adoption at schools are doubted that better education means better ICT means. Nisar et al., (2011) in their research publication raised the issue of ICT adoption among secondary schools staff and pointed out that almost all staff members used the ICT to extend and improve the learning of students in their subject areas. Current Trends in ICT market of UK In 2012, spending on ICT contracted by 0.8% in UK that has been expected to increase from 2.2% to 53.3 billion GBP in 2013. In a report of BMI, it is revealed that with the growth of economy, ICT will show improvement in market from recession. Areas expected to grow include the cloud computing, tablet, business software and data analytics for real time systems. Due to uncertainty in recovery of UK’s enterprises and regional economy, enterprises’ spending becomes limited (Swiss Business Hub United Kingdom, 2014). In a report of Capgemini Consulting (2014) that many UK business companies showed shortage of internal skills in their employees that slowed down the economic growth. It will rely increasingly upon the external sources. High skilled and knowledge professionals and workers are considered to be more loyal to their occupation and profession as compared to an organization with a single employing. In last few years, there has been a shift in psychological contract from a trust and loyalty based relational contract company to a limited duration transactional relationship. Germany and UK represent service and software market throughout the European markets contributing the 6% and 9% respectively for overall employment in OECD ICT sector. Scholarios et al., (2015) in a latest work have focused upon the ICT European market, and found that most of ICT SMEs opted the short term solution to meet the shortage of skilled workers, but a large subset of firms showed their commitment towards the career management through stronger bonds with their employees. UK government is promoting the Tech City that is next to London city, as an important UK’s ICT cluster. From history, it is shown that UK has big clusters of ICT outside of London. In the freight market of UK, role of the ICT has been well recognized. However, advances in the ICT trends in UK made slow progress in transport provisions of multi-model freight. Slow adoption of ICT advances was aimed to bring new changes in landscape from Internet of Things and cloud computing. Best practices have been experienced to provoke the debate among the academics and practitioners to see that how recent use if ICT has lowered the barriers to the ICT adoption in order to make the integrated freight and transport infrastructure (Harris, 2014). Productivity Growth through ICT in UK It has been found that ICT played a significant role for productivity growth. Knowledge economy that includes the ICT capital and labor composition have increased from 2% to 2.3% since 1997 in UK. It is also investigated, which sectors have heavily invested in the ICT. It was found that ICT contributed towards the productivity growth of non-ICT sectors from 1997 to 2007 (Miller & Atkinson, 2014). Gargallo-Castel & Galve-Gorriz (2012) examined the link between ICT investment and productivity growth and changes in UK firms and found the evidence to support the ideas on IT need to organize the measured products in order to measure the productivity growth. World Economic Forum (2013) presented a report on Global Information Technology ranked United Kingdom on 7th place among top ten where 85% households have internet access as compared to USA as 70%. Finland that is educational system hub ranks up to UK in best internet access facilities. Future Trends across all sectors of ICT in UK There is a rapid growth in ICT sector in the context of size of market and technology itself. Purchasers show their increasing trend towards the buying the all form of communication. Customers’ demand for services’ quality and availability is very high and ICT sector is incentivized to keep these features. On services providers side the cost-efficiency provision is also wished (Horrocks et al., 2010). New trends of ICT are emerging in forms of cloud computing, mobile technology and bid data. All these encapsulating trends have attraction and participation of citizens. It is expected that half of total spending on cloud computing from public sector is expected to be on the public cloud services by the end of year 2015. There is strong commitment shown from UK government to adopt the cloud computing. A program named G-Cloud is already set to achieve the complete adoption of Cloud computing. G-Cloud is an emerging framework that will enable suppliers and other channels of public sector to achieve the goals (Venkatraman, 2014). Conclusions: The United Kingdom economy faced challenges from 2012 to 2013, but inward investment in ICT sector have positive impacts on it. The ICT market in UK is one of the largest markets in Europe. ICT market in UK has been analyzed with its applications in subsectors. Role of technology in sectors i.e. education and SMEs is also given to find the ICT impacts on these sectors. ICT positive and negative impacts on these sectors are briefly investigated. ICT globalization has impacted positively and UK has been leader in productivity growth through ICT globalization. SMEs size has close association with the ICT adoption. However, SMEs face the challenges of high cost for ICT adoption. Contraction on spending of ICT has been slowed down in year 2012, but increased from 2013. UK business companies have shown low level of skills in last many years. In freight market, Internet of Things and Cloud Computing played an important role to make advancement. Productivity growth of UK is positively impacted by the increased ICT adoption. Emerging trends of ICT have been found in forms of mobile technology, cloud computing and big data. From literature review, UK government’s commitment towards the ICT spread all over the country has been highly seen. G-Cloud framework is the example of such efforts from UK government to boost up the ICT market. References Consulting, C. 2014. ORF SEE IT - Development of Regional Export Promotion Action Plan [Online]. Available: http://www.ict-net.com/wp-content/uploads/2014/05/IT- Market-Analysis-UK1.pdf [Accessed 22-04-2014. Gargallo-Castel, A. & Galve-Górriz, C. (eds.) 2012. The Impact of ICT on Productivity: The Moderating Role of Worker Quality and Quality Strategy, Management of Technological Innovation in Developing and Developed Countries,: InTech. Harris, I., Wang, Y. & Wang, H. 2014. ICT in multimodal transport and technological trends: Unleashing potential for the future. International Journal of Production Economics, 159, 88-103. Horrocks, L, Beckford, J, Hodgson, N, Downing, C, Davey, R and O‟Sullivan, A. 2010. Adapting the ICT Sector to the Impacts of Climate Change – Final Report. AEA group, Defra. Livingstone, S. 2012. Critical reflections on the benefits of ICT in education. Oxford Review of Education, 38, 9-24. Middleton C. (2014). UK has most globalised ICT market in the world, says new report, Available from http://www.computing.co.uk/ctg/news/2349883/uk-has-most-globalised-ict-market-in-the-world-says-report Accessed on 21-04-2014. Miller, B. & Atkinson, R. D. 2014. Raising European Productivity Growth Through ICT. Washington, D.C: THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION |. Nandan, S. 2012. Adoption of Information and Communication Technology in Small and Medium Enterprises: A Synthesis of Literature. Sri Lankan Journal of Management, 14, 18-40. Nisar, M. W., Munir, E. U. & Shad, S. A. 2011. Usage and Impact of ICT in Education Sector; A Study of Pakistan. Australian Journal of Basic and Applied Sciences, 5, 578-583. Reuters (2013). Research and markets: ICT budget and staffing the UK –Enterprise ICT investment plans to 2013, Available from http://www.reuters.com/article/2013/01/31/research-and-markets-idUSnBw67fQmHa+10a+BSW20130131 Accessed on 21-04-2013. Scholarios, D., Heijden, B. I. J. M. V. D., Schoot, E. V. D., Bozionelos, N., Epitropaki, O., Jedrzejowicz, P., Knauth, P., Marzec, I., Mikkelsen, A. & HEIJDE, C. M. V. D. 2015. Employability and the psychological contract in European ICT sector SMEs. The International Journal of Human Resource Management, 19, 1035-1055. Swiss Business Hub United Kingdom, 2014. Opportunities and Challenges, the UK ICT Market, SWISS BUSINESS HUB. UK Trade & Investment. 2009. UK Information and Communication Technologies Sector an international marketing strategy, Minister of State for Trade and Investment. Venkatraman, A. 2014. Public sector IT procurement, G-Cloud and the SMEs [Online]. Available: http://www.computerweekly.com/feature/Public-sector-IT-procurement-G-Cloud- and-the-SMEs [Accessed 22-04-2015. World Economic Forum. 2013. Global Information Technology Report 2013 [Online]. Available: http://www.weforum.org/reports/global-information-technology-report-2013 [Accessed 22-04-2015. Read More
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