The European IT Industry: UK

Essay by carlshimUniversity, Bachelor'sD+, June 2003

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1. IT Environment

1.1 Country Overview

The U.K. economy has grown for eight consecutive years. Prospects for continued growth are strong and real GDP growth is expected to rise above 2 percent in 2001 despite the global economic slowdown.

All of the one hundred largest U.S. companies have established operations in the U.K. The U.K. attracts over 20% of global inward investment destined for Europe, and nearly 40% of investment projects from the Far East and the United States.

The services sector, including banking, insurance and investment management accounts for almost 70% of the UK's GDP. Britain's telecommunications sector is among the most liberal in Europe, providing opportunities for innovative services and service providers. Broadband is in the process of being rolled out across the country.

The British economy is market-driven, with independent regulatory bodies supervising some sectors where the general public is affected including the telecommunications sector. The recent passing of the U.K.

digital signature and data protection regulations are expected to accelerate the use of the Internet and e-commerce.

The U.K. has no significant trade or investment barriers, or restrictions on the transfer of capital. The barriers that do exist are due to EU Directives and regulations. An EU common external tariff applies to all non-EU imports, and a local valued-added tax of 17.5 percent applies to most transactions including imports.

Road and rail transportation and distribution in the U.K. needs capital investment for modernization and the government has planned significant capital injection over the next few years.

1.2 UK Information and Communications Technology (ICT) Overview

The UK telecommunications infrastructure is highly developed. The U.K. is extensively cabled and has ISDN bandwidth on demand. Digital TV will play a major role in bringing the Internet to non-PC users with half of the population expected to go digital by...