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Monday, 13 April 2009 13:57

Green IT agenda a top priority for governments

In the midst of the world financial crisis, green IT still remains a top priority on the IT agenda of governments and is growing in importance for the public sector, according to a report released by Ovum after the recent G20 summit in London.

According to Ovum, one of the strongest messages for S/ITS suppliers from the G20 summit is the growing importance to governments of green IT, with the governments having signed up to making “the transition towards clean, innovative, resource efficient, low carbon technologies and infrastructure.”

Tola Sargeant, leader of the geographies & industries practice at Ovum, says that although the G20 communiqué was dominated by talk of repairing the financial system and strengthening financial regulation, the need to “build an inclusive, green and sustainable recovery” still got a mention – albeit in the last two paragraphs of the document.

Sargeant says that, even if suppliers tend to think statements like these are empty rhetoric, S/ITS suppliers targeting the public sector will benefit from a strong green IT agenda – particularly, as Ovum has said before, “if it can be shown to cut costs at the same time.”

“Technologies such as video conferencing, cloud computing and virtualisation could be winners in the longer term as a result. There is also an opportunity for software suppliers to provide versions of their back-office applications which support mobile and flexible working.”

According to Sargeant, the evidence suggests that most countries are now taking the threat of climate change seriously, with many incorporating green measures into their recovery plans.

“The US government, for example, has had a significant change of heart and has allocated US$100 billion or 13% of its stimulus package to green measures. The green portion of the EU recovery plan is 14% but China is allocating about a third of its US$580 billion recovery plan to green measures, with energy efficiency its main focus.”

And technology, according to Sargeant, is set to play a big part in achieving energy efficiency.
Sargeant said that the London summit communiqué also reaffirmed the intention of the member states to invest in education and training to support employment and stimulate growth.

He said investment in the education sector remained a priority for governments around the world and “it’s another area where technology has a lot to offer.”

“Education is also a beneficiary of the various economic stimulus packages already announced by national governments. The US economic stimulus package, as set out in the American Recovery and Reinvestment Act of 2009, promises US$90.9 billion for the modernisation of education in the US, including an investment of US$650 million in educational technology.
“However, given the population of the US, this investment seems low compared to the £45 billion promised over fifteen years for the refurbishment of UK schools – or the £4.5 billion of that investment which is expected to be spent on ICT – under the UK’s building schools for the future (BSF) programme.

“BSF is an established programme and an area where the UK government is hoping to bring forward spending to help boost the economy. It is also one of the few stimulus measures proposed by the UK government that could provide opportunities for S/ITS suppliers.”

Sargeant also looked at the healthcare sector which, although not mentioned by the G20 in London, he says is another sector that is benefiting from stimulus investment and could hold promise for S/ITS suppliers around the world.

“Indeed, the US stimulus package is well known for its investment in healthcare technology. In total, healthcare is set to receive US$147.7 billion under the US plans, of which some US$19 billion is earmarked for health information technology.
“This figure has had healthcare software providers the world over salivating,” says Sargeant, but he cautions vendors against getting too carried away.

According to Sargeant, comparing this figure to the £12 billion the UK is investing in its national programme for IT in the NHS over ten years will help to give some perspective.
He says the US funding for the implementation of electronic health records (EHRs) is spread thinly across a much larger country and administered through incentive payments to hospitals via the Medicare and Medicaid organisations. While it will undoubtedly boost investment in EHRs, it is a long way from being sufficient to cover the total cost, Sargeant adds.

“Nevertheless, healthcare IT and EHRs in particular are areas that many governments around the world are currently planning to invest in despite the recession. This presents welcome opportunities for suppliers with the right products or services and an established track record in the sector.”

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