Financieros

Innovation is based on technological trajectories on one side, meaning that technology is assumed as being an exogenous variable of the economic system; on the other side, the adoption and diffusion of a technology is instead endogenous since it depends from demand, available budgets to assign to technology and innovation. When an innovation or a new technology is adopted/demanded by businesses and consumers, the adoption/demand is based on priorities that are determined by economic trends and conditions.

As a consequence, in a time of rapid changes and of high economic uncertainties, it is very relevant to consider the main priorities driving the adoption of innovation and what are the main key uncertainties in order to better understand the innovation sub-scenarios.

The main end-user strategic priorities in a time of change:

 Using technologies to cut costs

Some recent IDC surveys on end users priorities clearly confirmed that the cost agenda (IT investment decision driven by a desire to cut organizational and IT costs) is currently more powerful than the growth agenda (IT investment driven by a desire to increase the market share or the revenues). That does not mean, of course, that all or even most IT services buyers are planning to cut their spending. Using IT to cut corporate costs can be a driver of increased, not decreased, IT spending levels. But what is important to realize is that IT investment is often — if not most often — primarily about cutting costs. Using IT to reduce corporate costs is a very different matter from cutting the costs of IT, and indeed the deployment of new technologies that make the organizations

142

more cost effective can be the stimulus for major IT investment. The cost agenda among corporate buyers is not necessarily antithetical to new IT spending.

Given the uncertain macroeconomic and political environment in much of Western Europe and the consequent low levels of both business and consumer confidence, proposals for net new IT spending have to be framed carefully so that both the ROI and the payback times for the customer are attractive and the implications for the client's cash flow are not harmful.

 Security

Security is a perennial priority for IT services buyers and has been so since networked technology use became more widespread in the client/server evolution in the 1980s/1990s and later in the ongoing Internet/Web revolution of the 1990s onward. Based on the more recent surveys conducted by IDC, it seems that security is now an overwhelming priority. This depends on the fact that from now on it not only a technology issue but a business issue as well. The growing importance of Internet-based supply chains (both business to consumer and business to business) and the invasion of new consumer-oriented technologies (e.g., media tablets), and services (e.g., social Web) into the workplace rise potential threat levels.

The main key uncertainties:

 EU system capacity to adopt innovation: the EU system capacity to adopt innovation will

very much depend on the macro-economic trends and on the capability and policy will to invest in innovation and in the IT technologies.

 SMEs level of intensity of innovative IT services and applications: SMEs are still very

relevant in the European economy and the innovation capacity of the EU very much depends on the SMEs capacity to innovate. During the crisis the SMEs are more vulnerable than large enterprises because of financial constraints. It is therefore important to develop some policy actions to support SMEs in case the crisis will last more than expected.

 Services sectors accelerating systemic innovation: the current innovation scenario is

characterised by increasing relevance of the service industry. Clearly where innovation will be fast and pro-active, the service sector will gain relevance and help in the acceleration of innovation.

 Investments in infrastructures and NGN (overcoming the broadband gap): investments in

infrastructures and in NGN are still strategic in the EU in order to reduce the digital divide. These investments will again very much depend on the macroeconomic trends and on the resources the individual countries will be able to address to innovation and the achievement of the Digital Agenda.

9.3.3 The innovation sub-scenarios

The combination of alternative hypotheses about the main technology trends lead to three alternative innovation scenarios.

Table 1: The main technological innovation trends of the ICT industry The sub-scenarios

Main trends Struggling on High way to growth Reduced expectations

Overall IT spending trend Moderate growth High growth Low growth

Mobile devices and apps Slow diffusion High investment and fast diffusion

Low diffusion

143

technology delivery models medium investments high investments

Big data Low priority,

investments only by large companies

High priority, investments by large and

medium companies

Low priority, investments only by multinationals

Social technologies and interactive network of

things

Medium priority, slow diffusion

High priority, high investments, diffusion in

both large companies and SMEs

Low priority and very scarce investments for all the time period 2012-2020

Source: IDC, 2012 These different technology sub-scenarios correspond to different macroeconomic assumptions and IT spending propensity (i.e. the total IT spending on GDP) that feed into the e-skills demand model. In the following paragraphs we present the main characteristics of the three innovation sub- scenarios.