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The Economic Impact of IT, Software and Innovation”
 

The Economic Impact of IT, Software and Innovation”

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    The Economic Impact of IT, Software and Innovation” The Economic Impact of IT, Software and Innovation” Presentation Transcript

    • The Economic Impact of IT, Software and Innovation April 2007 Czech Republic
    • Executive Summary • Growth in the IT sector is dynamic and will continue on an upward trajectory through 2011 • The software market will grow at 9% average compound growth rate between 2006 and 2011 • In the next five years, the IT sector will generate over 46,000 new jobs; annual tax revenues will be almost $700 million higher in 2011 than 2006 • Approximately 53% of all Czech IT employees are engaged in creating, distributing, or servicing software – for external customers or internal corporate users – and just over 65% of all IT tax revenues come from the software-related sector • For every dollar of Microsoft revenue in the region another $7 were generated by other companies selling hardware or software that works on Microsoft operating systems or servicing that software. Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • Strong IT Market Growth ($M) (Constant 2006 Dollars) $6,000 IT Spending in Czech Republic $5,000 $4,000 $3,000 $2,000 $1,000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • Czech Republic’s IT Industry – Source of Economic Growth IT as a % of GDP 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 3.2% 2.9% 2.6% 2.6% 2.5% 2.5% 2.7% 2.8% 2.9% 3.0% 3.1% $6,000 $5,000 YE 2000-2010 $4,000 $m $3,000 $2,000 $1,000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 IT spending ($m) IT Tax revenues ($m) Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • IT Market Topics and Issues in Czech Republic § Software and Services Pushing IT Market Growth § Hot Areas of Interest: Security, Application Integration, BI and Analytics, Mobile Solutions § SMB Uptake in Applications Space, Driving Overall Apps Market Growth § Czech IT Market Beginning to Display Development Trends in Line with Mature WE Countries, but with Much Higher Growth Rates § Central European Market Emerging – Czech Solutions Providers Going Regional, Foreign Firms Coming to Czech
    • IT Will Benefit Local Economies $1,800 IT-Related Tax Revenues $1,500 $695 million in new tax revenues over 5 years ($M) $1,200 $900 Personal & Social Taxes Corporate Income Taxes VAT $600 2006 2007 2008 2009 2010 2011 Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • IT Will Create New Jobs IT-Related Employment in Czech Republic 190 Thousands 180 170 Between 2006 and 2011 there is 160 growth of 46,000+ 150 new IT jobs 140 130 120 Hardware employees 110 Software employees 100 Channel and Services employees IT Professionals 90 2006 2007 2008 2009 2010 2011 Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • IT and Software Related Employment in 2006 • Close to 133,000 people were employed in IT-related functions Czech Republic in 2006 • Between 2006 and 2011, IT growth will fuel an additional 46,000 new IT jobs • While software represents only 21% of total IT spending, it drives 53% of employment 2006 IT Employment by Sector Local End User IT IT Producers Local Channel Organizations (Hardware & Service & Software) Firms 13,975 49,269 69,015 Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • Software’s Influence will Continue to Increase IT Spending, 2006 Employment, 2006 Software Vendors Hardware Hardware & Channel Firms Vendors Services Services Firms Channel Firms 79% Software IT Professionals Services Firms 21% IT Professionals $3.61 Billion 132,259 IT Jobs Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • Software Related Employment Total IT Employees • Software-related 200,000 employment in 2006 was more than 70,000 people 150,000 • By the end of 2006, software accounted for 100,000 53% of IT employment in Czech Republic, and 50,000 reach 57% by 2011 0 2001 2004 2007 2010 Total Software and Software Related Employees Other IT Professionals Other Services and Channels IT Hardware Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • Software Drives IT Benefits New Software-Related Jobs Added Each Year 8,000 7,000 46,000 new IT jobs 6,000 between 2006 and 2011 5,000 Most will be software- 4,000 related 3,000 2,000 1,000 0 2006 2007 2008 2009 2010 2011 Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • The Impact of Microsoft in 2006 • MS-related employment* for Czech Republic in 2006 was almost 58,000 jobs, representing 44% of total IT employment 100,000 Microsoft-related employment 80,000 Total employement 60,000 40,000 20,000 0 Hardware Software Services & IT Professionals Channels * Employees in companies that create, sell, distribute, or service hardware or software that runs on Microsoft operating systems and IT employees at user organization that develop applications, service, or maintain such hardware or software
    • Related IT Spending - Hardware, Software and Services, 2006 For each $1 of Microsoft revenue, there is downstream revenue of $9.2 for the local IT sector In 2006, Microsoft related tax revenue was more than $440 million Services 19% Software 14% Hardware 67% Source: IDC IT Economic Impact Study, 2007, Czech Republic
    • Study Methodology IT Spending Statistics by Validation by Country Country Officials Standard Import/Export Definitions IT Economic Factors Impact Model Tax Rates, Labor Macroeconomic Rates, Exchange Data Rates IDC Analysts in 45 Countries Source: IDC IT Economic Impact Study, 2007, Czech Republic