Innovation is key to excelling in IT services

15 February 2006

Human head x-ray Innovating, continual learning, investing in people and creating a nurturing environment are ways for the UK to sustain its advantage in technology, according to participants in a recent BCS-sponsored Thought Leadership debate.

Representatives from industry, universities and government bodies who attended the event believed the UK currently has a strong knowledge-based economy and can draw on this to retain its advantage in the face of growing competition from India, China and elsewhere.

Competition for knowledge work is nevertheless fierce as it dominates international activity involving emerging economies such as China and India, as well as domestic activities of OECD countries.

Given that wage levels in China and India are relatively low, it is not surprising, nor disputed that the trend to offshore IT services, particularly to those countries, is gathering pace.

Nevertheless, the UK is currently in a strong position, an assertion which participants backed up with several examples. The UK has the seventh largest economy in the world and the fourth in terms of services. As concerns the trade surplus for computing and information services, the UK ranked fifth in the world behind India, Ireland, the USA and Germany in 2003, according to the WTO.

One reason that the UK is excelling in IT services, according to one participant, is because proximity to customers still matters in the business services industry. Many of the important client firms for business services – in financial services, consultancies, consumer products, and energy – are located in the UK.

The current strength of the IT industry in the UK gives it an advantage in the privilege of engagement with its clients. IT suppliers can draw on their customers’ knowledge of their industries and learn from the work that it does for them. This gives the UK an edge over its competitors.

The UK must use its existing privilege of engagement with customers to learn and innovate, making the most of new opportunities. The ability to innovate is key for the UK’s sustainability, agreed participants.

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Thought Leadership section