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Software and IT Services

The UK has the largest Software and IT Services sectors in Europe. Together, they account for around 3.3% of UK GDP and employ about 600,000 people. The UK sectors remain highly concentrated with the top fifty or so companies dominating the total UK Software and Computer Services market (total market value £30bn in 2008 according to analysts). At the other end of the market there are an estimated 95,000 smaller companies, a large number of which are micro-businesses employing fewer than 10 people. Key activities of the sectors include software design and distribution; IT reselling and IT and management consultancy.

The IT sector as a whole continues to grow, with employment increasing at five times the UK average with around 150,000 entrants to the IT workforce required each year for the next decade to meet growth and replacement demand.

IT services are subject to rapid and constant technological change, and the industry has entered a period of significant development. A number of converging factors are responsible, including the competition from global sourcing strategies, the rise of major players in offshore markets, and the creation of a whole new array of services and approaches as a result of major developments in communications infrastructure.

The effective exploitation of ICT is one of the biggest levers in achieving productivity gains across the economy. Based on historical evidence and specific modelling assumptions, estimates suggest that the continued adoption and exploitation of ICT could generate an additional £35 billion of GVA to the UK economy over the next 5 to 7 years, provided companies – particularly smaller companies – take action on the key factors of management and leadership skills, investment and the IT enabling of employees (e-skills UK, Technology Counts).

BERR’s Software Services & IT Services team works with a range of stakeholders on strategies to address these challenges. Stakeholders include individual companies, e-skills UK, the British Computer Society, the Institution of Engineering Technology, the National Computing Centre, Intellect, the Confederation of British Industry and government departments.

The sector’s foremost collaborative partnership is the Information Age Partnership (IAP) – comprising Chief Executives of the UK's leading IT, Electronics, Communications and Content companies, Ministers and senior government officials. This flagship union ensures that ICT is effectively deployed to accelerate innovation and productivity growth and provides solutions to issues that impact of the UK’s economic standing.

Contact

Michèle Barker, Electronics and IT Services unit, Tel 020 7 215 1568, Email michele.barker@berr.gsi.gov.uk