How will the coalition government impact on the IT industry?

How will the UK’s election of the coalition government impact the IT industry moving forward?  iQ asked four leading IT experts for their predictions…

Danny Long, MD, Pure Technology

“The big players in the UK IT industry are in for a shock over the next few years as, in this age of austerity, no sector will avoid the squeeze on government spending. Contracts worth around £3.2 billion are currently in the process of being shelved which will leave many IT industry ‘big boys’ out in the cold.

Public sector pay freezes will also see senior IT professionals leave the civil service and set up on their own, creating a highly-specialised and highly-competitive subset of the industry providing departmental or regional government support. In the next five years, all IT companies are going to have to become as dynamic and flexible as the technology they work with, as only the fittest and most adaptable will survive.”

Allan Pettman, MD, Global Knowledge

“The impact of the government’s agenda will undoubtedly result in a very cost conscious society. But while cuts are necessary to get us through this recession, cutting back on IT development and improvement is not the solution… particularly as efficiency, governance, and cost management are at the heart of many implementations.

In terms of the IT industry as a whole, the relative strength of the $ won’t favour UK companies buying in $ and will also lead to a restriction in US spending, forcing many firms to retain relative ‘fit for purpose’ equipment instead of embracing high-end technologies.”

David Tomlinson, MD, Data Encryption Systems (DES)
“Despite its central role in all layers of government, IT isn’t immune from cost cutting. The advent of the coalition is forcing all government departments, agencies and authorities to focus their IT spend on essential products and services. But this is an innovative and versatile industry and IT is a facilitator for hot-desking and home-working; models which drive down costs. Successful vendors will be those selling essential products and services at truly competitive rates. There is a great opportunity for IT to improve government efficiency with technologies and systems like SaaS, monthly licensing, online meetings and cloud storage.”

Martyn Hart, Chairman of the National Outsourcing Association

“The government’s permanent immigration quota planned for April 2011 – aimed at limiting the number of non-Europeans allowed to live and work in the UK – will be crucial. IT companies have a long-standing reliance on highly skilled workers from abroad, and the new quota could leave them severely lacking… and this is where outsourcing will play an important role.

Gaps where skilled foreign workers would have previously provided expertise could be outsourced, which could, crucially, lead to enhancing the competencies, skills, and qualifications of local talent. The UK is a world leader in its outsourcing management, so perhaps this is the future growth area where we can concentrate resources and develop skills in this country? Managed properly the quota could have a positive impact on industry and the economy as a whole.”

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