E FOR ENTERPRISE: The `Colonies' Strike Back at the Empire

By Clive Holtham And David Longworth | The Independent (London, England), May 13, 2001 | Go to article overview
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E FOR ENTERPRISE: The `Colonies' Strike Back at the Empire


Clive Holtham And David Longworth, The Independent (London, England)


When ICL revealed last week that it would be reporting a second consecutive annual loss for the year 2000, questions were asked about how much more its Japanese parent would take. The announcement came only months after its acting chief executive had pledged to turn round what was once one of Europe's proudest IT service companies.

Owner Fujitsu had given ICL the chance to start again after last year's abortive flotation. But since then, a catalogue of disasters has ended with it turning over its once core government business to Anite for a paltry pounds 13m.

The European-owned hardware industry's loss of competitive advantage over the past 50 years has been well documented. But the movement now is into a "knowledge economy", where brains matter more than brawn, software more than hardware. This should suggest that Europe can regain its lost advantage via software and services, especially for e-business.

Most European countries have long-standing engineering and design traditions, and Europe has a good track record of managing large and complex projects.

In addition, computers were quick to be adopted in Europe, a trend that should really have spawned a vibrant software industry by the beginning of the 21st century.

There is certainly a large European software industry, but a significant proportion of this is merely acting as an outlet for reselling American products. There is also a large software services sector, again mainly based on US software, or dependent on consultancies with their headquarters in the US.

Put bluntly, with a small number of notable exceptions, such as SAP and Autonomy, Europe is barely represented at the top table of software.

But this is far from being the end of the story. In the Far East, and especially in India, there are significant numbers of well- educated software engineers. Some 18,000 of these were legal - and welcome - immigrants to the UK last year.

And, of course, a growing amount of British software development is now being outsourced to the Indian subcontinent.

I like to think of this as "the revenge of the colonies".

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E FOR ENTERPRISE: The `Colonies' Strike Back at the Empire
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