The crisis that hit the international financial markets in the second half of 2007 deepened in 2008 causing significant difficulties in banking and finance and triggering increasing negative effects on the real economy.

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The world telecommunications market in 2008 totalled 1,821.5 billion dollars in value but experienced a slump in growth slipping from 5.2% in 2007 to 4.2% in 2008 (fig. 4). Equipment (+2.9% compared to +5.5% in 2007) dropped considerably while services managed to contain the decline falling from 5.1% to 4.5% in 2008. These differences can be explained by the fact that TLC use is constantly increasing, which also allowed to curb the effects of price reduction, while diminished profitability caused a contraction in investment.

The world IT market in 2008

The progressive deterioration of global economic conditions, the collapse of some important banks and the generalised slump of stock markets in the second half of the year contributed to slowing down the positive trend in the IT market which grew 4.8% in 2008 as against 5.9% in 2007 totalling 1,191 billion dollars in value (fig. 7).

Market trends in major countries

Throughout 2008, the market for TLC equipment and services in Europe saw growth lose pace. Total value reached the 364.6 billion euro mark (an increase of +2.8% compared to 2007), a figure resulting from divergent trends: on the one hand, under the technological profile, growth in services (310.4 billion euro, +3.9%) was offset by a decline in equipment (54.2 billion euro, -3.0%); on the other hand, under the geographic profile, the five major European countries (Germany, France, Italy, United Kingdom and Spain – for simplicity EU5) saw values drop from 236.

The ICT market in Italy in 2008

The ICT market underwent a further significant slowdown in 2008 as a result of two factors: the disappointing performance of IT and that of TLC, whose trend for the first time was negative. The market grew by a mere 0.1% against 0.9% in 2007 and 2% in 2006 reaching 64.4 billions euro in value, with IT growing 0.8% and TLC falling 0.2% (fig. 13).

The TLC market in Italy for 2008

For the first time growth for the Italian TLC market in 2008 was negative compared to the previous year. Total spending stood still at 44,120 million euro, with a decline of 0.2% against the performance of 2007.

The IT market in Italy for 2008

Trends for the IT market in Italy have been influenced to a greater extent than other countries by the negative economic situation. A comparison of relevant trends illustrates that Italy’s 0.8% growth was 4 percentage points lower than Spain’s and 3 points below the European average.

Business Intelligence

The Business Intelligence (BI) market in Italy for 2008 had a positive performance with a 7% increment in sales.

ICT convergence in end user businesses

Outsourcing

ICT outsourcing services continued to grow in 2008, although at a slower rate than the previous year (4.3% in 2008 against 5% in 2007) owing to a decline in the TLC segment. Total value reached 3.3 billion euro, with 2.7 billion deriving from IT outsourcing and 0.6 from TLC.

Demand

According to a Netcomm/GfK Eurisko survey, in Italy, the number of Internet users who have used the Web to make purchases online by November 2007 totalled 5.2 million, or 31% of the 17 million users over 14 years old who have used the Internet at least once in the previous 3 months from home, work or school.

ICT spending trends in the main sectors

Growth trends in ICT spending varied widely among the different sectors depending on a series of factors: the spending mix between IT and Telco, the average propensity to invest in technology and the average size of company per sector.

Factors affecting market dynamics

It is very difficult to predict the evolution of the ICT market in 2009. Economic forecasts vary from week to week, as the key indicators continue to change. At the time of writing, the main international economic bodies expect negative growth of between 0.5% and -1% for global GDP (International Monetary Fund, 19 March 2009). The Bank of Italy forecast (on 4 March 2009) a contraction for the Italian economy of -2.6%, and might lower this figure over the coming weeks. This troubling climate may lead Italian companies to revise their revenue forecasts and slash ICT budgets even further.