European ICT Market Will Grow More Slowly Than US Market, But With Wide Geographic Variances

I am in Barcelona, Spain, at our IT Forum EMEA event, where my colleague Peter O'Neill and I presented our latest forecasts for the tech market in Western and Central Europe.  In parallel, Forrester has just published our report with this and much more information (see June 8, 2011, “European Information And Communications Technology Market 2011 To 2012 -- The North-South Divide Persists, With Wide Variations In Country Information And Communications Technology Growth”).  Here are the key conclusions that I would highlight from the report:

  • As a geographic unit, the market for business and government purchases of information and communications technologies (ICT) in Western and Central Europe will grow by 3.8% in 2011 (measured in euros), compared with 6.4% growth in the US (measured in US dollars).  Excluding slow-growing telecommunications services, the information technology (IT) market in Western and Central Europe will grow by 4.5% in euros vs. the 7.4% growth in US dollars in the US (see June 7, “European Information And Communications Technology Market 2011 To 2012 -- The North-South Divide Persists, With Wide Variations In Country Information And Communications Technology Growth”).
     
  •  However, Europe as a single tech market is a myth.  The real story in Europe is what is happening at the country level as opposed to what is happening in Europe as a geographic unit.  The Nordics, the Central European countries, and the UK will have better ICT market growth than the continental European countries of Germany, France, Benelux, and Austria/Switzerland, which in turn will do better than the southern European countries of Italy, Spain, Portugal, and Greece. 
     
  • This North/South divide shows up not only in growth rates, but it also in size of ICT markets relative to size of economies.  ICT markets in the UK, the Netherlands, Switzerland, and the Nordic countries of Denmark, Finland, Norway and Sweden punch above their economic weight, with higher percentages of GDP devoted to tech investment than larger economies like France of Germany.
     
  • The largest European country markets vary by ICT product.  Overall, the largest ICT markets are (no surprise) Germany, the UK, and France, in that order.  But there are surprises at the product level.  For example, the largest software market is France, while Spain is the largest market for communications equipment.