UN Says New IT Infrastructure Key To Recovery

The IT industry is in for a rough ride during the downturn, but investment in new networks and business models should help the tech sector weather the storm and support a wider economic recovery, a UN report claims.

IT vendors’ survival, as well as that of the service providers and other companies that purchase their wares, depends on investment in new infrastructure, according to Confronting the Crisis: Its Impact on the ICT Industry, issued by UN agency the International Telecommunications Union (ITU) this week.

“Despite difficult times, there are reasons to be optimistic,” said ITU secretary-general Dr Hamadoun Touré. “Having contributed consistently as a high-growth sector in its own right, ICT can now power economic recovery across all sectors.”

According to the report, IT providers such as telecoms operators will face financial costs 3 to 4 percent higher year on year, but may be able to call on other sources of funding such as government economic stimulus packages to help them develop high-speed networks that will benefit the economy as a whole.

Dr Touré explained that as well at taking advantage of government stimulus packages from countries such as the US, UK and China, the ICT industry should continue to invest in infrastructure and cost-effective services such as Next Generation Networks (NGNs).

Read eWEEK Europe’s exclusive interview with Dr Touré.

According to the ITU, several governments have committed to invest in their national backbone infrastructure including the European Union which has included the roll-out of broadband networks in its economic stimulus packages.

BT’s NGN known as 21CN is due for completion in 2011 and could cost the company around £10 billion.

As well as detailing how the IT industry in general will respond to the crisis, the report also examines how consumption of technology by business and consumers is changing.

Key trends being driven by the crisis include a move towards cheaper technology such as netbooks which are roughly half the price of notebooks and could reach sales of 50 million units this year. Software as a service, and increased use of Linux and open source will also be driven by the downturn.

A separate report from research company DatacenterDynamics claims that the cost of power is the biggest concern for businesses that own or run datacentres. In response, some companies are trying to lower costs by spending less money on cooling, and even using low-power processors.

The ITU is a United Nations agency focused on the development of IT and communications technology. null