Can IT make up for public sector job cuts?

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David Cameron held meetings on Monday with top industry executives to discuss the future growth of the UK's private sector.

The Prime Minister was seeking pledges from major companies to create more British jobs, encourage economic growth and to counter the losses in the public sector caused by substantial Government cuts.

Cameron also claimed to be interested in learning from big businesses how they thought the Government could help them offer more jobs during the 'age of austerity'.

So far from the IT industry only Microsoft has been forthcoming with a commitment to create more vacancies.

Gordon Frazer, managing director of Microsoft UK, said: “In 2011, Microsoft expects its Britain Works programme to generate 4,000 new jobs, in addition to the 9,000 new jobs created since launch in 2009.”

He explained the scheme in more detail, adding: “Firstly it creates new jobs in the form of highly skilled apprenticeships and opportunities for entrepreneurs to start new businesses. Secondly it provides IT training to give people the right skills for existing vacancies.”

“Microsoft’s apprenticeships train unemployed young people from Job Centre Plus as technical support staff employed in our partner network, with support from the National Apprenticeship Service. In addition to the technical support apprenticeship, new technical sales and software development apprenticeships will launch in Spring 2011.”

Cameron will likely have been hoping for more on paper from other major players in the industry, but global competition could well be an issue. In the face of economic hardship, many countries are trying to entice IT companies which they recognise as part of a sector with high potential to stimulate growth, particularly as IT is instrumental to the success of virtually all other business.

Bob Tarzey, an IT industry analyst with Quocirca, felt the UK had the potential to make a great deal of headway in IT and described the impact from Government cuts as a “short-term problem.”

“One of the ways the IT industry has benefited over recent years is Government spending on IT,” he said. “The cuts in government spending will undoubtedly affect a lot of IT projects.”

Tarzey quoted figures predicting 2011’s global growth in IT at 4.6 per cent. He believed the UK industry could form a significant part of this global climb.

“The IT industry has a massive role globally in 2011 and beyond, it plays a major part in driving business in the UK,” he added.

Tarzey was keen to emphasise the positive outlook for British IT, citing the recent deal between Microsoft and UK firm ARM.

“People forget what a leader the UK is in IT security with companies like MessageLabs and SurfControl which have all been breaking ground and establishing leadership. Many may now be American owned but the innovation started here,” he said.

Tarzey explained even the manufacturing side of IT might begin to prosper in the UK, claiming some companies were finding the costs of shipping parts to the Far East for assembly and back again were becoming prohibitive. Such instances might encourage home-grown IT companies to repatriate their manufacturing operations to the UK, creating many new jobs in the process.

Andrew Bartels, a US-based analyst for Forrester Research, agreed manufacturing might go in the direction as predicted by Tarzey but was sceptical about the extent.

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