UK dominates European ICT services market

The European Commission's annual Digital Competitiveness report has been published, covering areas such as broadband, open source and e-commerce

The UK overwhelmingly leads Europe in information and communications technology services, the European Commission's annual Digital Competitiveness report has revealed.

The report, published on Monday, showed that the UK remains the leading country for information and communications technology (ICT) services employment, accounting for 19.4 percent of the EU total. The country has an even bigger proportion of the value added to the EU economy by ICT services, at 24.8 percent.

In ICT manufacturing, Germany accounts for more than one-quarter of EU employment and one-third of value added. According to the report, the UK and France have been hit the hardest by the drop in ICT manufacturing employment.

Hungary, the Czech Republic and Poland have seen "significant" increases in ICT manufacturing employment. However, comparisons with value added to their economies suggest these increases are either at the low end of the market or the value added does not stay in the country.

The report also showed that the number of fixed broadband lines in Europe went up by nine percent between 2009 and 2010, rising to 123.7 million lines. Fixed broadband penetration was up two percentage points to 24.8 percent, but this showed the growth rate to have slowed by 24 percent over the year. According to the report, 80 percent of fixed broadband lines in the EU now offer speeds of more than 2Mbps, but of these, only 18 percent go above 10Mbps.

Fibre-based connections only represent between two and five percent of all EU broadband lines, whereas this proportion is 51.4 percent in Japan and 46 percent in South Korea.

"Europe's digital economy is crucial to economic growth and prosperity," digital agenda commissioner Neelie Kroes said in a statement. "ICTs and high-speed internet are as revolutionary in our lives today as the development of electricity and transport networks were over a century ago. But we need support for further internet development so that all citizens can benefit from the digital economy."

Enterprise broadband connectivity in the UK is at 82 percent, which is slightly below the EU average. Despite this, UK wireless connectivity is above the average and 3G internet penetration on handsets more than doubled in 2009, the report said. Across Europe, 28 percent of all enterprises had a mobile internet connection in 2009 — in the UK, Sweden and Finland, that proportion stands at around half of all enterprises.

The EU mobile broadband card market expanded by a hefty 86 percent between the starts of 2009 and 2010. Overall EU incorporation is now at 5.2 percent of the population, although the intake rate exceeds 15 percent in Finland, Portugal and Austria. According to the report, the estimated number of dedicated mobile broadband cards, at 25.1 million, corresponds to around 20 percent of all fixed broadband connections.

The report had much to say about e-commerce, which is "progressing fast, with more than half of internet users having made e-commerce transactions". However, it seems that "barriers mainly relating to legal certainty, different regulations and trust" are limiting the use of cross-border online commerce between EU countries.

"The lack of a borderless single market hence... limits growth and opportunities for the many small and medium-sized enterprises that characterise the European economy," the report stated.

The UK is top of the list in terms of people buying goods or services online for private use, with 66 percent of the British population engaging versus an EU average of 37 percent. The UK is only seventh on the list, however, in terms of enterprises buying and selling goods and services online.

The report also covered the open-source market, noting that Europe is the world's "main contributor" to the open-source software community. In 2008, open source accounted for €4bn (£3.4bn) of the total €229bn value of the European software market. However, the report's authors predicted that the open-source software market will reach a value of €12bn in 2012 — a growth rate of 30-40 percent per year.

Monday's report was published ahead of the EU Digital Agenda, which is expected to come out on Tuesday and will lay out Europe's ICT strategy .

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