ICT sector braced for change

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Economic research by top global trade credit insurer Atradius (www.atradius.co.uk) reveals major shifts in the landscape of the global ICT sector, driven by advancing technologies and changing market conditions.

 

The Atradius ICT Market Monitor reports that in an environment of continuing uncertainty fuelled by the potentially negative impact of Brexit, interest rate increases, currency fluctuations and international trade disputes, ICT companies also face increasing pressure to improve time to market and to ensure that their offerings are best in class and include evolving technologies.  These challenges must be managed in an environment which is already characterised by high competition and tight margins and the Atradius report warns that the combination could increase the probability of failure for ICT businesses that are not able to adapt.

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“The choice for many ICT businesses in order to survive is either go big or go niche,” comments Tracey McIntyre, Senior Sector Underwriter at Atradius.  “We’re likely to see many firms partnering up by pooling their resources for mutual gain, alongside mergers, acquisitions and divesture, which can provide a fast track to fending off competitors from both inside and outside the industry.  Of course, the underlying concern is that highly leveraged ICT companies could face challenges in financing mergers and acquisitions or other strategic investments.”

 

More positively, the global market is continuing to expand with businesses continuing to invest in ICT as they anticipate revenue growth albeit with a shift in spending patterns. Projects in digital business, blockchain, IOT and progression from Big Data to algorithms, machine learning and AI are the main growth drivers.