Digital Planet Press Release

October 8

For More Information:
Bob Cohen
703-284-5333
bcohen@itaa.org

New Report Documents World ICT Marketplace Approaching $2 Trillion

Information Technology Powers Global GDP; Internet to Experience User Surge in Next Three Years

The first major study of global information technology spending and economic impact documents an industry valued at almost $2 trillion and growing at a rate substantially faster than worldwide gross domestic product (GDP). In addition, the results suggest that national GDP grows when Information and Communication Technology (ICT) spending increases and that even in the face of worsening economic conditions, the effect on ICT spending is muted. The World Information Technology and Services Alliance (WITSA) released the dramatic findings today at the Organization for Economic Cooperation and Development (OECD) meeting in Ottawa, Ontario.

Produced for WITSA by International Data Corporation (IDC), "Digital Planet: The Global Information Economy" provides the first systematic exploration of the size and shape of the ICT marketplace around the globe. The study presents its findings based on data gathered in the 50 largest country markets (in GDP terms) as well as four rest of region components. In aggregate, this group represents 98 percent of worldwide ICT spending and 97 percent of global GDP. The Digital Planet study is distinctive in several important respects, including its coverage of internal IT spending. This includes company expenditures on IT staff, capital depreciation and other non-vendor related costs-an important marketplace component not previously examined in industry sizing studies.

"This study presents the hard data needed to support conclusions we have long suspected," said WITSA President Harris Miller. "Information technology is a huge global marketplace-at $1.8 trillion one of the top industries worldwide. More importantly, by making a substantial contribution to productivity, information and communication technology is helping countries and companies of all sizes reach their strategic goals. The WITSA study shows that the 'information economy' is not a vague abstraction but a powerful economic force, contributing 6 percent of aggregate global GDP to the world economy. That's nearly twice the size of California's GDP."

The new study provides additional evidence of the mind-boggling growth of personal computers and their influence on education. At year end 1997, 118 million personal computers had been installed in homes and educational institutions worldwide-up from 35 million in 1992. Report author IDC forecasts World Wide Web utilization to hit 100 million people by the end of this year and 320 million by 2002. Every year, an additional 50 million people gain access to telephone lines in their homes.

"Digital Planet conclusively demonstrates that the world is embracing information and communication technology for competitive advantage, convenience, quality of life, variety, affordability, creativity and many other factors. In short, countries have to have information technology and from building the basic infrastructure to developing highly sophisticated modes of service delivery-like electronic commerce and outsourcing-they are making great things happen," Miller said.

IDC Senior Vice President for Worldwide Research Philippe de Marcillac said that the data confirms that ICT is both an economic buffer and catalyst. "With the higher productivity, efficiency and innovation delivered every day by information technology investments, the bigger picture begins to emerge. It drives companies and job growth. It increases access to information between 'haves' and 'have-nots.' In short, countries see ICT as critical to their long term competitive advantage and so continue to invest, even in the face of economic downturns. At the same time, ICT appears to deliver a resilient quality to the economic health of nations, giving them the flexibility and insight needed to respond very quickly to changes in market conditions."

Digital Planet is made possible through sponsorship grants from The Nasdaq Stock Market®, the Virginia Center for Innovative Technology, the Fairfax County Economic Development Authority, the Japanese Information Services Industry Association and the European IT Software and Services Association.

"Information technology has been called the new wealth of nations and is an essential key to economic prosperity. Technology is enabling free enterprise, which has emerged as a truly global movement for perhaps the first time in human history and holds the key to rising prosperity on a worldwide scale," said Alfred R. Berkeley, III, President of The Nasdaq Stock Market, Inc., the world's first and largest screen-based stock market, which operates on a computer network that largely mirrors the World Wide Web. Nasdaq® was a sponsor of the study. "The WITSA study is an important confirmation of the value of IT spending worldwide."

Says Wolfgang Tolle, Managing Director, Technology Industry Development for Virginia's Center for Innovative Technology, "CIT is proud to have been a part of such a comprehensive and professionally executed study. Virginia is emerging as a leader in Internet provision and Internet content and this study serves as more evidence that IT-based growth delivers extra value to the economy."

"This important study illustrates how crucial the information technology industry is to the global economy as well as to local economies," said Gerald L. Gordon, President of the Fairfax County Economic Development Authority. "Leading IT communities around the world are pursuing this multi-billion dollar industry with great fervor. IT represents the business of the future and communities realize that the most vital economies of the next millennium will be predominately led by IT businesses."

Country by country comparisons showed:

  • The U.S. spent $643 billion on ICT in 1997, twice as much as Japan at $317 billion. Together, the U.S. and Japan represent over 53 percent of the world marketplace. Other "top five spenders" are Germany, the United Kingdom and France. Countries spending least on information technology are Bulgaria, Romania, Slovenia, Slovakia and Vietnam. Brazil is the leading IC spender in South America with $34 billion in 1997. In Europe, Germany spends marginally more than the United Kingdom and France ($119 billion versus $102 billion and $91 billion respectively), but twice as much as Italy ($50 billion) and five times as much as Spain ($23 billion). The top five IT spenders in Asia-Pacific are Japan, Australia, the People's Republic of China, Korea and Taiwan.
  • In the last five years, Asia/Pacific (excluding Japan) has been the fastest growing ICT market, moving at a compound rate of over 14.5 percent. Despite the current uncertainty, ICT spending in most of the region is expected to rebound as the crisis abates. Latin America followed just behind at almost 13.6 percent. At under five percent, Western Europe was the slowest growing market at 3.5 percent as a result of the appreciation of the dollar and local currency fluctuations in addition to a period of sluggish economic growth in Western Europe. PC installations in the home and education markets grew almost 80 percent in Asia/Pacific (excluding Japan)-over twice as fast as Latin America, the next closest region and three times as fast as North America.
  • Vietnam, PRC, Columbia, Brazil and Hong Kong were the five fastest growing IT markets in the world. Although Vietnam is ranked 47 on the list of 50 IT spending markets, the compound rate of spending on ICT jumped 44 percent between 1992 and 1997. PRC, ranked in the top ten ICT markets, grew at a rate of 28.5 percent.
  • Over half the countries included in the survey have increased their representation on the World Wide Web by over 100 percent per annum between 1992 and 1997.
  • The U.S. pays the world's largest telephone bill. With outlays of $220 billion last year for telecommunications products and services, the U.S. outspent Japan-number two on the list-by $68 billion. The U.S. and Japan constitute almost half of global spending on telecommunications. Other big spenders are Germany at $47 billion, the United Kingdom at $36 billion and France at $31 billion.
  • At 15.3 million, the U.S. has the largest number of Internet hosts, 15 times more than its closest rivals, Japan and Germany. Other countries in the top five for the number of Internet hosts are the United Kingdom and Canada. Least friendly Internet countries--Vietnam, Saudi Arabia, Egypt, Venezuela and Philippines--are the least well represented on the Internet in terms of the number of Internet hosts in the country.
  • Internal spending on IT also shows the U.S. ahead, although the amount of these outlays has dropped gradually over the years from $105 billion in 1992 to $99 billion last year. Other top spenders in this category in 1997 are Japan ($63 billion), Germany ($26 billion), France ($24 billion) and the United Kingdom ($22 billion).

Also of interest in the new study:

  • Russia spends less on telecommunications ($3.2 billion) than far smaller countries like Portugal ($3.4 billion) and Greece ($3.7 billion). Russia spends less on information technology ($8.5 billion) than Taiwan ($12.1 billion) and Hong Kong ($12.0 billion).
  • While most countries experience incremental gains, telecom spending by the PRC has exploded over four-fold between 1992 and 1997, from $4.3 billion to $18.8 billion. China spent almost six times as much on telecommunications in 1997 as Russia.
  • Singapore is the world leader in telephone lines per household. Singapore has 1.25 lines per household, followed by Taiwan with 1.2 lines, Korea (1.17 lines), Israel (1.15 lines) and Sweden (1.15 lines).

Published by WITSA, Digital Planet: The Global Information Economy is available to the public for $500 and can be ordered from the WITSA website at http://www.itaa.org/digitalplanet.htm. An executive summary is available free on the web at http://www.witsa.org. Reporters seeking a copy of the full report should email Bob Cohen at bcohen@itaa.org.

WITSA is a consortium of 32 information technology (IT) industry associations from economies around the world. As the global voice of the IT industry, WITSA is dedicated to advocating policies that advance the industry's growth and development; facilitating international trade and investment in IT products and services; strengthening WITSA's national industry associations through the sharing of knowledge, experience, and critical information; providing members with a vast network of contacts in nearly every geographic region of the world; and hosting the World Congress on IT, the only industry sponsored global IT event. Founded in 1978 and originally known as the World Computing Services Industry Association, WITSA has increasingly assumed an active advocacy role in international public policy issues affecting the creation of a robust global information infrastructure.

The Nasdaq Stock Market is the fastest growing stock market in the United States and the world's first and largest electronic market. It is among the world's best regulated stock markets, employing the industry's most sophisticated surveillance systems and regulatory specialists to ensure investor protection and a fair and competitive trading environment. With a market capitalization of two trillion dollars, share volume that averages 775 million shares a day from investors around the globe, Nasdaq is home to nearly 5,300 companies-engines of growth like Microsoft, Intel, MCI WorldCom, and Amgen. Nasdaq is a subsidiary of the National Association of Securities Dealers, Inc. (NASD®), the largest securities industry self-regulatory organization in the United States. For more information about Nasdaq, visit its web sites at http://www.nasdaq.com or http://www.nasdaqnews.com.

Virginia's Center for Innovative Technology (CIT) increases the Commonwealth's economic competitiveness and quality of life by advancing the development of Virginia as a technology state and by creating and retaining technology-based jobs and business.

The Fairfax County Economic Development Authority promotes Fairfax County, Virginia, a premier technology business community, as a global location for technology businesses.

Japan Information Services Industry Association (JISA) comprises leading software developers, information processing and database/VAN service suppliers. Its mission is to attain sound and steady growth of the information service industry through the promotion of the development of information system technology and consolidation of infrastructure for computerization, and to contribute to the economic and social development of Japan through the promotion of computerization.

European IT Software and Services Association federates the majority of the national professional associations representing the software, system integration and computing services industries of Western, Central and Eastern Europe. EISA is supported by 16 European associations representing 1585 companies of all sizes, employing 600 000 people and generating revenues of 50 billions of euros (55 billions of US dollars). Robert GUILLAUMOT, Chairman and CEO of INFORAMA, Chairman of the international Committee of Syntec-Informatique (France), is the present Chairman of EISA.

International Data Corporation (IDC) provides IT market research and consulting to the world's leading ICT suppliers and financial institutions as well as IT professionals. With a global network of 500 analysts in more than 40 countries, IDC is the industry's most comprehensive resource on worldwide ICT markets, products, vendors, and geographies (http://www.idc.com).

Back to the Press Kit


Home | About WITSA | Press Center | Calendar of Events
White Papers | WITSA Newsletter | Global IT Resources