Economic shadow over software

Trade

The UK software industry is in a strong position but could suffer in the current economic climate, according to a report commissioned by Microsoft.

The study, carried out in association with Intellect and the British Computer Society, shows that the overall trend in the UK is a downward slide, albeit from a relatively strong position.

Key challenges for the industry to overcome include helping small software businesses and encouraging students.

The study warns that smaller software companies are likely to face stiffer competition from abroad, particularly from Germany, and pointed to widening gaps in the UK’s knowledge economy. The report also makes a number of recommendations for both government and industry that it said could help the sector ride out the economic storm.

It recommends that when governments procure technology they should use local, small businesses. To make it easier for small firms to compete, it recommended that contract terms are altered.

“Government procurement processes need to favour small business. Where possible, government should move away from large, multi-year systems development projects to more streamlined and simpler programmes that small businesses can compete for,” it said.

Other recommendations concern students, who should be encouraged to study and improve their IT skills, the report said.

Microsoft UK MD Gordon Frazer commented: “We work with 36,000 Microsoft partner companies in the UK. On average these software businesses have fewer than five staff, and turnover of about

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