A study of global services predicts a rise in IT business of 35% - making it, along with B2B services, one of the fastest growing sectors. The report, by Oxford Economics and Western Union says that the change is due to services being easier to trade across borders. Only a few decades ago, much of the service sector was deemed to be “non-tradeable” because it was assumed that most services required face-to-face interaction, it says.
The value of global trade in services increased by around 50% between 2010 and 2019, double the pace of growth in merchandise trade. By region, Europe is the world’s largest services exporter, with the UK having an especially large share of services in total exports. This reflects its role as a financial and business services hub.
As the global 2020 pandemic radically – and rapidly – alters business models, firms that lacked digital agility are now rapidly retooling. This new mindset will further stretch and redefine applications of digital technology, the report says: “We estimate that the value of cross-border flows of B2B, ICT and Financial Services will only decline by around 6% in 2020.”
ICT services have proved relatively resilient as large swathes of the economy have moved online. The crisis is likely to encourage digitalisation of the economy and greater investment in digital infrastructure. The need for support services will also be accentuated. It sees international IT services rising 35% in the next five years.
"As the pandemic has highlighted the potential for remote interactions to replace geographic proximity, we can expect greater investment in digital infrastructure to take place in coming years, including faster adoption of 5G technologies," it says. Telecom operators are expected to invest around $900bn worldwide in 5G networks between 2020 and 2025. These upgraded networks will support billions of interconnected devices, with almost no latency, at speeds up to 20 times faster than 4G. This will enable the development of a new kind of intelligent network that connects virtually everyone and everything ranging from machines to objects and devices. While many of the benefits of 5G are not yet evident, it is likely to prove revolutionary and spur new innovations and business models.
The nature of new IT services will be explored at next month's Everything-as-a-Service online virtual event on September 9. Sessions will cover channel strategies to take advantage of changes in customer demand, identifying which customer sectors are changing fastest and how, and insights into how service providers can get better at customer relationships and marketing. Registrations are showing a high degree of interest from strategic channel management and businesses looking to develop new ideas.
For more details contact Stephen Osborne at IT Europa
D: +44 (0) 1895 454 536 M: +44 (0) 7516 502 689 E: Stephen.Osborne@iteuropa.com
