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European IT Market in the dynamically changing environment

Updated: Nov 8, 2022

It is hardly a secret that information technology plays one of the essential roles in the development of modern human society. Information technology is, to some extent, a new stage in the evolution of humanity. The common person unfamiliar with the industry's intricacies might think that the use of information technology is extremely narrow and limited. However, this is no longer the case. IT area is not limited to the things such as computer software or programming language.

Information technology does not only play a significant role in fields of communication, business, or finance. At present, the influence of IT expands into such areas of life as education, health care, logistics, security, entertainment, etc.

Less than a decade ago, official reports about the European IT Market were nothing more than pessimistic. Most of them compared the European market with the leaders of that time (India, Brazil, and China) and stated that Europe was the last in the world in terms of growth in IT costs. In 2013, a report published by the European Information Technology Observatory announced that while India’s IT spending rate was growing by 13.9%, Brazil’s by 9.6% and China’s by 8.9%, Europe was the last in IT cost increase – only by 1.4%. At that time, experts predicted positive development and an increase in demand for software in the near future. They made no mistake. Starting from 2020 European IT Market had a considerable growth along with European IT startups attracting more and more investments. In 2020, the volume of the European IT industry grew by 7.3% more than in the previous year. In 2021 the European Union authorities announced a multi-billion dollar project to stimulate the development of technologies. This spring Europe formed a technological alliance with India and Japan. "Trade and Technology Council" between India and the EU was created with the aim of solving crucial trade, economic and technological problems. The partnership between Japan and the EU will focus on achieving concrete results in resolving issues of safe 5G, the safe and ethical application of artificial intelligence, and the sustainability of global supply chains in the semiconductor industry. This type of cooperation will only benefit the European IT Market in the long run.

The European IT industry has been developing exponentially for the last several years. Despite different adverse events the world faced in previous years, the European businesses are notably optimistic about the growth in budgets of the IT industry. Large organizations with more than 500 employees plan to spend more on IT technologies than small ones – 51% of European companies anticipate increasing their IT budgets. At the same time, it was only 31% of them in 2021. The hardware represents the most extensive technology spending category across the globe. Still, at this time, the European organizations have significantly increased the share of investments allocated to hosted/cloud-based services. Adoption rates of blockchain and virtual reality in Europe are much higher than in North America. It goes along with notably higher usage rates of edge computing, 3D printing, artificial intelligence, serverless computing, and 5G in Europe. We can refer to the Spiceworks Ziff Davis's annual study for more precise numbers and statistics. It is based on in-depth survey data collected from thousands of North America (NA) and Europe respondents.

What future does an IT career in Europe wait for? Undoubtedly the bright one. Needless to say, as modern remote education and health care soar in demand for up-to-date hardware and software, remote work will benefit IT professionals even more. As the trend to work remotely causes the labor market to undergo an extreme transformation, the specialists from IT departments are directly involved in the changes. A lot of companies invest in IT technologies to support their remote workers. Giant corporations are definitely going to hire additional IT staff. The recent "Future of Remote Work" study found that nearly a quarter of employees (26%) worldwide will work remotely even after the pandemic is over. In addition to that, the long-term remote workers' ratio in Europe will be remarkably higher than the one in the US – 35% to 22%. The current work-from-anywhere conditions open new possibilities in the IT labor market and profit not only specialists searching for a new job but also valued employees. They can leave for companies with better conditions anytime and anywhere.

Speaking of the European IT market in 2022, we cannot ignore the elephant in the room. Ukraine has been a massive IT outsourcing powerhouse for years. There were approximately 285,000 IT specialists in Ukraine in 2021. Taking into consideration that the number of professionals in the industry unstoppably grows, after the war broke out, it influenced the lives of more than 300,000 Ukrainian IT specialists in one way or another: some of them joined the Army Forces, some joined government cybersecurity forces, many are trying to keep working on a regular basis away from home inside Ukraine, only a few relocated abroad. The development of the European IT market is not put on hold, while the lives of Ukrainian IT specialists somehow are.

In 2022 the spending growth started in 2021 exceeds the previous year, effecting the positive development of the European IT market. The COVID-19 pandemic and the war between Ukraine and Russia keep up having a significant impact on the IT industry. However, even post-pandemic business plans include a substantial increase in their IT budgets. Remote work will remain a crucial feature of the new market environment even when most employees start returning to the offices. In the future, we anticipate the spending that will presumably excel pre-pandemic levels. There is a reason for excitement in a situation that will see more money flowing into the tech industry. Nonetheless, many organizations predict to face tough challenges in 2022, such as product shortages, logistical issues, rising prices, and inflation.

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