Global ICT markets are also shifting to non-OECD economies. The share of OECD countries declined to 76% of the world market in 2009 from 84% in 2003, with ICT markets growing more rapidly outside of the OECD area. This is part of the shift towards a growth dynamic decoupled from OECD countries. Non-OECD ICT market growth reflects the reorganisation of ICT manufacturing to non-OECD economies. This shift is also reflected in the composition of the top 250 ICT firms, a group which includes increasing numbers of non-OECD firms. Notable among them are manufacturing firms from Chinese Taipei which have partly driven the rise of China as the major ICT goods exporter. Also notable are IT services firms from India and telecommunication services providers from a range of non-OECD economies.
The longer-term global performance of the ICT sector will depend on whether new ICT goods and services continue to encourage businesses and consumers to invest in them and on whether non-OECD economies continue to decouple from OECD economies and maintain their dynamic growth paths. It will also depend on the contribution of ICTs to meeting major challenges such as climate change, the environment, ageing populations, skills shortages and continuing globalisation.
Notes
1. This section is based on the OECD Economic Outlook, Vol. 2010/1, No. 87, May (OECD, 2010b), and the OECD interim assessment (OECD, 2010a).
2. Only Australia, Korea and Poland had modest GDP growth in 2009 (OECD, 2009a).
3. Unemployment was projected to begin to fall in the OECD area in the first quarter of 2011.
Unemployment in the United States is projected to start to fall consistently from mid-2010, and in the euro area not until 2011 (OECD, 2009a, OECD, 2009d, 2010c). For ICT employment see also OECD (2009d), and Chapter 3 of this publication.
4. An OECD workshop, Global ICT Services Sourcing Post-Crisis: Trends and Developments, was held in Egypt in November 2009. The workshop examined trends in international services sourcing and concluded that despite global turbulence, prospects for ICT services supply from emerging and developing countries remain bright, provided the right domestic policy framework is in place (OECD, 2009e).
5. The correlation between 2009 annual revenue and net debt is only significant for telecommunication companies. The R2 is 0.85 excluding China Mobile, the richest firm in the top 250 ICT firms, and the relationship between annual revenue and net debt is a linear function:
net debt [USD million] = 0.5 * annual revenue [USD million] + 1 395 [USD million].
6. Where there are few firms, performance is firm-specific rather than industry-based or country-based.
7. R&D spending reflects past firm performance and potential future performance. Past performance provides funding for current R&D spending and current R&D a platform for future growth and profits. It may also be seen as an element of cost affecting operating margins, although in the revised System of National Accounts, output of R&D will be classified as assets and expenditure as investments (Robbins, 2007).
8. See Annex A, Methodology and Definitions, for the definition of ICT sector value added and employment. As a result of revisions, data in this section are not directly comparable with data in the OECD Information Technology Outlook 2008.
9. See, for example, the 2008 Seoul Ministerial on the Future of the Internet Economy, and “Shaping policies for the future of the Internet economy” and annexes, at www.oecd.org/FutureInternet.
10. See Chapters 5 and 6. Detailed analysis of the relations between ICTs and the environment is available at www.oecd.org/sti/ict/green-ict. This analysis was a primary input for the OECD Recommendation of the Council on Information and Communication Technologies and the Environment, OECD, 8 April 2010.
11. Note that this section is based on a definition of ICT that is narrower than the one used elsewhere in this report. See Methodology and Definitions, Annex A, for the definition of ICT spending.
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CICC (2009b), “Chinese Will and Can Consume”, CICC Macroeconomic Weekly, 29 November.
CICC (2010), “1Q10 Economic Data Review: Economic Growth Strong, Inflation Still Mild”, Macroeconomy Brief, 16 April.
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Forrester (2010a), “US and Global IT Market Outlook: Q1 2010. The tech market recovery has begun”, updated 9 April, www.forrester.com/rb/Research/us_and_global_it_market_outlook_q1/q/id/56695/t/2.
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Gartner (2010d), “Worldwide Business Intelligence, Analytics and Performance Management Software Market Grew 4 Percent in 2009”, 22 April, www.gartner.com/it/page.jsp?id=1357514.
Gartner (2010e), “Despite Economic Downturn, Worldwide Application Infrastructure and Middleware Market Revenue Increased 2.8 Percent in 2009”, 20 April, www.gartner.com/it/page.jsp?id=1356113.
IMF (International Monetary Fund) (2010), World Economic Outlook: Rebalancing Growth, April, International Monetary Fund, Washington DC.
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MoneyTree (2010), MoneyTree Survey Report, PricewaterhouseCoopers, April.
OECD (2008), OECD Information Technology Outlook, OECD, Paris.
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OECD (2009b), “The Impact of the Crisis on ICTs and their Role in the Recovery”, DSTI/ICCP/IE(2009)1/
FINAL, www.oecd.org/dataoecd/33/20/43404360.pdf.
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Robbins, C.A. (2007), “BEA’s R&D Satellite Account and the Capitalization of R&D in the National Accounts”, Bureau of Economic Analysis, AUBER Fall Conference, Pensacola Florida, 15 October.
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ANNEX 1.A1
Figure 1.A1.1. Growth in monthly production in ICT and selected goods, France, February 1995-February 2010
Year-on-year percentage change, volume index, seasonally adjusted, 3-month moving average
Note: ISIC Rev. 4 sector classification.
Source: INSEE, Indice et séries statistiques, April 2010.
1 2 http://dx.doi.org/10.1787/888932327420 -50
-30 -40 -20 -10 0 10 20 40 30
%
Computer, electronic and optical products Chemicals
Manufacturing
Motor vehicles
Feb. 95 Aug. 95
Feb. 96 Aug. 96
Feb. 97 Aug. 97
Feb. 98 Aug. 98
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09
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Figure 1.A1.2. Growth in monthly production in ICT and selected goods, Germany, February 1995-February 2010
Year-on-year percentage change, volume index, seasonally adjusted, 3-month moving average
Note: ISIC Rev. 4 sector classification.
Source: Statistisches Bundesamt, Produktionsindex, April 2010.
1 2 http://dx.doi.org/10.1787/888932327439
Figure 1.A1.3. Growth in monthly production in ICT and selected goods, Japan, February 1999-February 2010
Year-on-year percentage change, volume index, seasonally adjusted, 3-month moving average
Note: IT equipment is composed of electronic computers, communications equipment, household electronic machinery and other. Electronics is composed of electronics parts, semiconductor devices and parts, integrated circuits.
Source: Japanese Ministry of Economy, Trade and Industry, March 2010.
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-30 -40 -20 -10 0 10 20 40 30
%
Feb. 95 Aug. 95
Feb. 96 Aug. 96
Feb. 97 Aug. 97
Feb. 98 Aug. 98
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09 Computer, electronic and optical products
Chemicals Manufacturing
Motor vehicles
-60 -50 -30 -40 -20 -10 0 10 20 60
40 50
30
%
Manufacturing IT equipment
Motor vehicles Electronics
Chemicals
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09
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Figure 1.A1.4. Growth in monthly production in ICT and selected goods, Korea, February 1995-February 2010
Year-on-year percentage change, volume index, seasonally adjusted, 3-month moving average
Source: Korea National Statistics Office, April 2010.
1 2 http://dx.doi.org/10.1787/888932327477
Figure 1.A1.5. Growth in monthly production in ICT and selected goods, Sweden, February 2001-February 2010
Year-on-year percentage change, volume index, seasonally adjusted, 3-month moving average
Note: ISIC Rev. 4 sector classification.
Source: Statistics Sweden, April 2010.
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-20 -40 0 20 40 60 80 120 100
%
Feb. 95 Aug. 95
Feb. 96 Aug. 96
Feb. 97 Aug. 97
Feb. 98 Aug. 98
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09 Computer, electronic and optical products
Chemicals Manufacturing
Motor vehicles
-60 -30
-50 -10 -20
-40 0 10 20 30
%
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09
Feb. 10 Aug. 09 Computer, electronic and optical products Chemicals
Manufacturing
Motor vehicles
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Figure 1.A1.6. Growth in monthly production in ICT and selected goods, United Kingdom, February 1995-February 2010
Year-on-year percentage change, volume index, seasonally adjusted, 3-month moving average
Note: ISIC Rev. 3.1 sector classification.
Source: National Statistics Office, April 2010.
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Figure 1.A1.7. Growth in monthly production in ICT and selected goods, United States, February 1995-February 2010
Year-on-year percentage change, index, seasonally adjusted, 3-month moving average
Source: The Federal Reserve Board, March 2010.
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-20
-40 0 -10
-30 10 20 30
%
Feb. 95 Aug. 95
Feb. 96 Aug. 96
Feb. 97 Aug. 97
Feb. 98 Aug. 98
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09 Electrical and optical equip. (ISIC 30-33)
Chemicals Manufacturing
Motor vehicles
-50 -20
-40 0 -10
-30 10 20 40 30
%
Feb. 95 Aug. 95
Feb. 96 Aug. 96
Feb. 97 Aug. 97
Feb. 98 Aug. 98
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09 Computer and electronics
Chemicals Manufacturing
Motor vehicles
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Figure 1.A1.8. Growth in monthly value added in ICT and selected goods sectors, China, April 2007-February 2010
Year-on-year percentage change, 3-month moving average
Source: National Bureau of Statistics of China, March 2010.
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Figure 1.A1.9. Growth of monthly production in selected manufacturing industries, Chinese Taipei, February 1999-February 2010
Year-on-year percentage change, index, 3-month moving average
Source: Ministry of Economic Affairs of Chinese Taipei, April 2010.
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%
-5 0 5 10 15 20 25 30 35 40
Total Communication equipment, computer and other electronic equipment
Measuring instruments and machinery for cultural activity and office work
Chemical raw material and chemical products Transport equipment
Jan. 0 8 Feb. 08
March 08 April 08
May 08 Jun
e 08 July 08
Aug. 08 Sept.
08 Oct. 08
Nov . 08 April 07
May 07 Jun
e 07 July 07
Aug. 07 Sept.
07 Oct. 07
Nov . 07
Dec.
08 Jan. 0
9 Feb. 09
Jan. 1 0 Feb. 10 March 09
April 09 May 09
Jun e 09
July 09 Aug. 09
Sept.
09 Oct. 09
Nov . 09
Dec.
09 Dec.
07
-60 -20 -40 0 20 100
60 80
40
%
Feb. 99 Aug. 99
Feb. 00 Aug. 00
Feb. 01 Aug. 01
Feb. 02 Aug. 02
Feb. 03 Aug. 03
Feb. 04 Aug. 04
Feb. 05 Aug. 05
Feb. 06 Aug. 06
Feb. 07 Aug. 07
Feb. 08 Aug. 08
Feb. 09 Feb. 10 Aug. 09 Information and electronics industry
Chemicals Manufacturing
Motor vehicles
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ANNEX 1.A2
Top 10 firms in each ICT sector
The top 250 ICT firms are dominated by large telecommunication services and electronics firms. However, compared to the 2008 list of the top 250 ICT firms, large electronics firms take a smaller place. For example, in the top 50 ICT firms of this year’s top 250 list, there are more services firms than in previous years and for the first time an Internet firm (Google) is among them. This section examines the activities of the top 10 ICT firms in each of eight sectors:
communications equipment and systems, electronics, semiconductors, IT equipment and systems, IT services, software, Internet, and telecommunication services.
Communications equipment and systems
The top 10 communications equipment and systems firms generated combined revenues of USD 229 billion in 2009 and net income of USD 15 billion. They employed more than 623 000, spent more than USD 29 billion or 13% of revenues on R&D, and they have more than USD 57 billion in net cash. There are 16 communications equipment firms in the ICT top 250, ranked by 2008 revenue, with Nokia, Cisco Systems, Ericsson, Motorola, and Alcatel Lucent in the top 50. The composition of the top 10 is much the same as it was in 2008, except for the replacement of Avaya by Research In Motion (Table 1.A2.1).
Communications equipment firms were deeply affected by the downturn in the 2009 financial and economic crisis, but less severely than during the downturn and sudden slowdown in telecommunications infrastructure investment from 2001. In 2009, revenues
Table 1.A2.1. Top 10 communications equipment and systems firms
USD millions in current prices and number employed Revenue 2009
(y-o-y growth)
Employment 2009 (y-o-y growth)
R&D 2009 (y-o-y growth)
Net income 2009 (y-o-y growth)
Net cash 2009 (y-o-y growth)
Nokia Finland 56 287 (–24%) 123 553 (–2%) 6 867 (–10%) 1 224 (–79%) 5 101 (+47%)
Cisco Systems United States 36 117 (–9%) 65 550 (–1%) 5 208 (–2%) 6 134 (–24%) 24 706 (+25%)
Ericsson Sweden 26 550 (–16%) 82 493 (+5%) 4 250 (–17%) 472 (–72%) 6 009 (–18%)
Motorola United States 22 044 (–27%) 53 000 (–17%) 3 183 (–23%) – 51 (–99%) 4 387 (+79%)
Alcatel Lucent France 20 817 (–16%) 78 373 (+1%) 3 465 (–14%) – 720 (–91%) 1 910 (+379%)
Huawei Technologies China 21 831 (+19%) 95 000 (+9%) 1 954 (+27%) 2 673 (+132%) 4 084 (–59%) L-3 Communications United States 15 615 (+5%) 66 000 (+2%) . . 901 (–4%) – 3 096 (–15%) Qualcomm United States 10 416 (–7%) 16 100 (+5%) 2 440 (+7%) 1 592 (–50%) 11 069 (+73%) Research In Motion Canada 14 953 (+35%) 12 800 (+0%) 965 (+41%) 2 457 (+30%) 1 912 (+26%)
Nortel Networks Canada 4 088 (–46%) 30 307 (+0%) 757 (–34%) 488 (n.a.) 1 128 (n.a.)
Note: Firms are ranked by 2008 total revenues.
Source: OECD Information Technology Database, compiled from annual reports, SEC filings and market financials.
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by the top 10 communication firms decreased by 13% compared to 2008; R&D also decreased but to a smaller extent (8%). In 2009, net income increased by almost 200% from the previous year, mainly due to large goodwill impairment charges in 2008 resulting from
“lower asset values in the overall market and the impact of the macro-environment on […]
near-term forecasts” (Motorola, 2009). The top 10 communications equipment firms also increased their total net cash in 2009 by 28%, but this was mainly due to Alcatel Lucent, which increased its net cash by almost a factor of four to USD 1.5 billion. Cisco Systems, the third-richest ICT firm in terms of net cash, also increased its net cash and accounted for 43% of total net cash in 2009 among the top 10 communications equipment firms.
Total employment in the top 10 communications equipment firms remained at almost the same level in 2009 as in 2008, although Motorola, Nokia and Cisco decreased the number of their employees by 17%, 2% and 1%, respectively. The increase in employment in top 10 firms such as Huawei Technologies (+19%), Ericsson and Qualcomm (both +5%) compensated the job cuts in other top 10 firms.
R&D intensity (i.e. R&D spending as a percentage of revenue) averaged more than 13%
across the top 10 in 2009, with Qualcomm, Nortel Networks, Alcatel Lucent, Ericsson, Cisco Systems and Motorola all spending between 14% and 23% of revenues on R&D. Research In Motion and Huawei Technologies were among the fastest-growing communications equipment and systems firms, with revenues increasing in 2009 by 35% and 19%, respectively.
Both firms are also the only ones to have increased R&D significantly in 2009 (by 41% and 27%, respectively). L-3 Communications also increased its revenue in 2009 (by +5%). Other communications equipment and systems firms suffered a decline in revenues; Nortel Networks and Nokia suffered the strongest drops, of 46% and 24%, respectively.