Stimulus packages to boost ICT sector

IT vendors gain as Asian governments commit US$767 billion worth of initiatives to jumpstart their economies, IDC says.
Written by Sol E. Solomon, Contributor

Infocomm technology (ICT) companies stand to gain as governments in the Asia-Pacific region, excluding Japan, pump US$767 billion over the next five years on initiatives to jumpstart their economies, a new study finds.

According to IDC-subsidiary Government Insights, governments in the region will start making these investments in late-2009 through 2014. These will fund initiatives ranging from economic stimulus packages and expansionary budgets, to the advancement of planned spending and projects.

Gerald Wang, Asia-Pacific market analyst at IDC Government Insights, said although IT spending is not singled out in most of these budgets, it is incorporated as an element of their initiatives.

"Despite this, it is still welcoming news for both government technology officers and IT vendors," Wang said in a media statement discussing the findings.

Based on its analysis of initiatives announced by Asia-Pacific governments between August 2008 and April 2009, IDC identified four key areas of public investments: infrastructure projects, future schools, healthcare reforms and green technologies.

The research house said spending on infrastructure projects create immediate jobs and boost citizen services. The spike in infrastructure projects would also likely boost ICT investments in areas such as remote monitoring for building maintenance, automated adherence to stricter safety standards, and environmental compliance such as industry emissions-monitoring technologies.

Governments will also spend on upgrading infrastructure to equip future schools with innovative technologies.

Public investments on healthcare not only result in job creation, skills development, citizen-services enhancement and digital inclusion, they will also provide a clear boost to public sector ICT investments, IDC said. For example, investments will have to be made to enhance existing ICT infrastructures at local hospitals, and accelerate the move toward digital patient information.

According to IDC, the current financial crisis provides governments an opportunity to "restart" the economic engine through long-term implementations that are economically, socially and ecologically sustainable.

In this context, national stimulus packages are--to varying degrees--seeking not only to revive but also improve their economies' green status. Green technologies, through a focus on energy efficiency, help governments meet cost-cutting and budget-optimization goals, IDC said.

Investments in green infrastructures also have implications for IT spending across areas such as intelligent grid technologies, energy efficiency technologies, and environmentally-sound technologies that generate low or zero waste, IDC added.

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