December 2008

Automation will skirt edges of global downturn

Information technology is critical enough it will buck the recessionary trend that is now circling the world. As a business sector, it will grow in 2009 by 2.6% worldwide.

The automation and control industry uses software and hardware extensively. Automation plays strongly in the critical infrastructures of all countries-the military, power, oil & gas, chemical, and water sectors.

Research firm International Data Corporation (IDC) expects worldwide information technology (IT) spending to grow by 2.6% in 2009 and by 0.9% in the U.S.

The Associated Press reported there already have been clear signs that tech spending is weakening.

In November, Cisco Systems Inc., the first of the major technology companies to report earnings that included October, warned orders for its computer networking gear fell abruptly during the month.

IDC Chief Research Officer John Gantz said IT is deeply embedded in businesses' important operations, and "remains critical to achieving further efficiency and productivity gains."

Software and services (like ERP, MES, CRM), which companies use to save money, will see solid growth while hardware spending, with the exception of data storage, will decline in 2009.

Growth will be slowest in the U.S., Japan, and Western Europe, where it will hover around 1% next year.

Emerging markets in Central and Eastern Europe, Africa, Latin America, and the Middle East will continue to see "healthy growth," though at notably lower levels than its previous, double-digit forecast IDC declared.

IDC expects technology spending to make a full recovery with growth rates approaching 6% in 2012.