The longer-term prospects for IT nevertheless remain bright, as the strategy of leveraging on the fast-growing mainland economy as our immediate hinterland pays off, and as productivity uplift, brought about by the restructuring process towards a knowledge-based economy, continues. With sound fundamentals and flexible market institutions, Hong Kong is expected to recover swiftly once the global economic environment improves.
In some more heartening news on the employment front, a December 2008 survey, by the Singapore infocomm Technology Federation (SiTF), found that 60 per cent of the Lion Citys ICT industry companies are forecasting positive profit growth for 2009.
The survey also showed that organisations will continue to hire this year, with half of the infocomm local enterprises (ILEs) and one-third of multinational corporations (MNCs) indicating their intentions to do so, especially in the areas of sales and marketing, IT and engineering. Half of Singapores ILEs plan to continue with their overseas expansion plans, in spite of current economic conditions.
It is heartening that the Singapore ICT industry will continue to grow and hire this year, considering the economic climate, says Tan Yen Yen, chairman of SiTF. However, the impact of increasing business costs is a valid concern and this is an opportune time for companies, especially those in the SME sector, to adopt infocomm technologies to reduce costs and increase efficiency.
The SiTF survey found that the top business cost concerns for both ILEs and MNCs are rent, salary and transportation. Travel is the first area where they will look to reduce costs. MNCs are least willing to reduce spending on training, an indication that the downturn is an opportunity for workers to upgrade. The government should put greater focus on market creation during this tough period and continue to promote Singapore as an ICT hub, data centre and regional HQ, Tan says.
It is important that the total value of setting up operations in Singapore vis-a-vis cost of operations remains attractive for foreign companies. SiTF would also like to appeal to the government to accelerate plans in implementing projects and explore new areas of investment, such as green IT.
A spokesperson for the Singapore government CIO, the Infocomm Development Authority (IDA), says that the impact of the current economic slowdown worldwide and in Singapore will no doubt affect the infocomm industry.
With the economic downturn, companies are reviewing their IT spending and rethinking their business strategies, the spokesperson says. The economic outlook for Singapore remains uncertain in 2009 and similarly, the outlook for the infocomm industry.
The focus for IDA in 2009 will be to deploy our resources and efforts to help sustain and grow our infocomm industry and manpower during the economic downturn. IDA will continue to work with the industry to invest in innovation and capability development, including infocomm manpower training and skills upgrading, so as to take advantage of opportunities when the economy recovers.
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