I attended a very interesting economics lecture given by Doug McWilliams the Chief Executive of the CEBR, who had some very interesting views on the role IT will play in the recovery of the UK economy.
Doug McWilliams’ view is that Consumer and Government spending is going to remain weak in the medium term. Consumers are finding credit harder to come by and the Government’s priority is clearly to reduce the deficit, so neither of these groups will contribute significantly to the recovery. Therefore the recovery can only be driven by business.
The two key components for business will be exports and investment and the most significant form of investment that business is likely to make is in IT.
Business has significantly reduced investment in IT in the last two years during the recession, but will now look to invest in IT to take advantage of the efficiencies it can deliver. Therefore the IT industry will be a growth industry that will help drive the UK out of recession.
Doug McWilliams also had a fascinating insight into what he described as “the biggest economic event in history”. He believes that we are going through the most important economic event ever, an event that will be seen as significantly more important than the industrial revolution! No, he did not mean the global recession, not the banking crisis, he was referring to the industrialisation of East Asia.
Why is this the biggest economic event ever? Because apparently a quarter of the worlds wealth is being effectively transferred from people who spend (eg Americans) to people who save (eg Chinese). This is going to have a profound effect on the global economics of the future.
We may be coming out of recession, but we are emerging into a very different world!
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