IT spending in the UK will increase by £17bn by 2005, creating another 500,000 IT jobs, according to analyst IDC.
Spending on services in the UK will jump from £18bn last year to £26bn in 2005, while spending on software will increase from £9bn to £16bn.
The amount spent on hardware will only increase from £14bn to £16bn. As a result, total spending will increase from £41bn to £58bn. Worldwide, IDC is predicting a 12 per cent growth in outlay between 2003 to 2005.
Increased spending will drive higher employment. In the UK, 2,358,000 people will work in IT by 2005, according to the figures, up from 1,769,000 last year.
The number of IT professionals will increase from 1,076,532 last year to 1,419,013 in 2005, according to IDC.
On the supplier side, hardware will account for another 67,300 workers (up from 62,600 in 2001), software will employ 181,300 (up from 114,900), and services will employ 462,519 (compared to 341,929). Around 228,000 will be working in the channel by 2005, compared to 173,400 last year.
Speaking at the Microsoft Government Leaders' Conference, where the research was unveiled, IDC chief research officer John Gantz said: "The industry is on the edge of incredible long-term growth for at least a decade. It will be more important than the growth in the last decade."
He added that application integration, mobile, wireless and security will be the main drivers. "Web services will become as important as client-server was in the 1980s," he explained. "IT managers are getting a lot more comfortable about spending again."
IDC forecast that the number of IT companies will also increase, again with the biggest rises in software and services.
By 2005 there will be 24,000 services companies (20,000 in 2001) nearly 9,000 software houses (up from 6,000 last year) and 633 hardware companies compared to 610 last year.
The number of channel players will increase from 445,000 last year to 53,000 in three years' time.
Commenting on the research Microsoft chief executive Steve Ballmer said: "Things can get slowed down by economic turmoil but the fact is that IT is a source of huge job growth.
"This is not just about Microsoft or IBM and other big companies because most of the job growth will come in smaller companies providing IT services in every corner of the globe.
"We have 141,000 companies in the US that we partner with and 269,000 in Europe. These companies have one to 150 employees and deliver services around technology that we provide.
"For every dollar of Microsoft revenues there's another eight in additional revenues in software and hardware and services."
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