Expect change   |  January 26, 2009  

It won’t be the best of years, but some good will result

Every December for awhile now, I have written a column to accompany our annual predictions issue. This is our third and I find the task harder than usual.

There are two reasons for this. The first is the ongoing economic situation. It’s a bad time for the world and, while I am optimistic the slowdown will be neither as deep nor as prolonged as some think, the job losses and the industries in peril are disheartening, to say the least. And as I write this, there is a distinct lack of decisive and emboldening action from our federal political leaders. By late January we will have a new budget and perhaps a new government, the latter making the former redundant, but in either case it is unlikely we’re going to see much economic stimulus in the near future.

Based on both the state of the world and of Canada, I expect 2009 will be a year of change. By this time next year, for example, the stature, if not the existence, of the Canadian auto industry will be different than it is today.

But if economic change makes it challenging to write about 2009, so, too, will changes in technology. For our cover story this year we gathered nine predictions from nine pundits. Taken together, the experts predict a rethinking of how technology will be purchased, supported and deployed. While a lot of dollars will still be spent—expect the tech industry to perform better than many over the next 12 months—we are moving into a buyer’s market.

Those organizations that find themselves with money to invest are going to seek pricing and other concessions from suppliers. This will also extend to outsourcing: with fewer deals to be had, outsourcing suppliers will be squeezed for more favourable terms.

So what will result from this year of change? I am optimistic. The popping of the tech bubble in 2001 was a difficult time for many, but the industry came out of it leaner and smarter. The same will happen here. Pushed to re-examine priorities and strategies, companies will emerge with a stronger sense of technology as a strategic driver.

CATA calls for economic stimulus
Just before press time, the Canadian Advanced Technology Alliance (CATA) released an open call to the federal government to create a $60 billion infrastructure stimulus package. It compared the plan to president-elect Barack Obama’s announced US$500-billion proposal and pointed out that governments around the world are taking action.

“We can devote infrastructure funds to pay our citizens to build and repair our infrastructure. Direct government spending on roads, bridges, mass transit, green technologies, information and communications technologies and an infrastructure for the future is the most effective way to apply a stimulus package...” CATA president John Reid said in a statement.

While CATA’s approach is broad based, Reid also listed 10 reasons the government should invest in technology.

These include:
> half of the revenue for the high-tech sector comes from outside Canada and represents net new money
> the high-tech sector has an extremely low carbon footprint
> high tech is also a safe industry, with very few health hazards
> it’s an industry that rewards creativity, analytic capabilities and innovation
> IT is transformative in nature; the innovations of today are the foundations of the future

The full list is at http://tinyurl.com/cataplan.

We here at Backbone see no reason to disagree with CATA. This plan relies on deficit spending but, even with that, a stimulus package is the best course.

Coming in March:
Many of the current economic realities will also play out in our fifth-annual presentation of the Branham300 ranking of Canada’s top tech performers, hitting the streets in March.

“The past twelve months have noticeably changed the Canadian ICT environment,” said J. Wayne Gudbranson, president & CEO of Branham Group. “For some, it has created significant opportunities, and for others it has encouraged them to find those opportunities. We are delighted and privileged to show Canadians and international readers alike the unparalleled capabilities of Canada’s Top ICT companies.”


Peter Wolchak
Editor
pwolchak@backbonemag.com