The 2005 survey on Europe's IT competitiveness In September 2005, KPMG and the Economist Intelligence Unit polled 126 CIO's, IT managers and directors for their views on IT sector competitiveness. The survey was cosmopolitan, covering more than 20 countries in three regions. A range of industries was represented, with manufacturing, healthcare, financial services, telecoms and IT accounting for the majority of respondents. The companies represented in the survey were of substantial scale: 58 percent earn more than US$500 million in annual revenue, and 44 percent earn over US$1 billion.Key findings from the analysis include the following:

• High prices and a perception of less value for money are the major weaknesses in European IT firms' competitive armor.They perform well,in the areas of technical excellence and strength of customer and partner relationships.


• IT managers will expect continued concessions on pricing from their suppliers, as well as greater flexibility in structuring contracts, but a large number doubt the ability of European suppliers to deliver in these areas.


• All parts of Europe's IT industry are not equal. Suppliers of IT services, hardware, desktop software and microelectronics are seen to be losing ground in competition with firms from other regions. Producers of mobile devices, applications and enterprise software, however, score high marks.


• Europe's technology firms have clear options to help improve competitiveness. Some will innovate with pricing strategies, or make better use of off-shoring to help reduce costs and improve service delivery. Others may also acquire rivals in order to broaden portfolios and gain economies of scale.

In its 'i2010' strategy, the European Commission aims to redress the weaknesses in Europe's technology sector by, among other things, focusing national efforts to expand IT research and development and fostering other components of the digital economy. in the final analysis, the fortunes of Europe's IT sector will hinge on the business acumen that its firms' leaders, employees and owners are able to muster for the challenge ahead.

Prashanth RaiTag(s):EU, IT+Services