Government strengthens grip on IT sector in 2018

The IT sector benefits from economic growth and the outlook is positive for 2018 too. ABN AMRO expects the turnover of IT companies to grow in 2018 (+6 percent) and in 2019 (+5 percent). At the same time, there are major differences with other TMT sectors. In the telecom sector and among publishers and printers, there is a long-term decline

The IT sector benefits from economic growth and the outlook is positive for 2018 too. ABN AMRO expects the turnover of IT companies to grow in 2018 (+6 percent) and in 2019 (+5 percent). At the same time, there are major differences with other TMT sectors. In the telecom sector and among publishers and printers, there is a long-term decline. Turnover is likely to fall further in telecom: by 1.5 percent in 2018 and by 2 percent in 2019. In the case of publishers, the turnover also decreases: in 2018 by 3 percent and in 2019 by 4 percent. At printing companies this year there is a drop in turnover of 3 percent and next year of 3.5 percent.

Regulation in the IT sector is increasing
Despite the expected growth, there are also challenges in the sector, particularly in the area of ​​privacy. Due to digitization, the need for regulation and government supervision is increasing. As a result of the General Data Protection Regulation, companies must take additional measures. Documenting the processing of personal data and communicating about data leaks now also fall under the law. On the other hand, there is the new Intelligence and Security Services Act, which increases the possibilities for investigating citizens' data.

The government and supervisors are strengthening their grip on the TMT sector
Although the TMT sector facilitates digitization in other economic sectors, it itself struggles to control its own growth. "The speed with which technological developments follow up has risen sharply in recent years", says Kasper Buiting, Sector Economist Technology, Media and Telecom at ABN AMRO. "This led to the rise and huge growth of companies like Google and Facebook. What we see now is that regulation often lags behind the technological strength of the sector. This year governments and supervisors are catching up. "This does not only apply to data traffic and privacy, but also when it comes to consolidation. For example, if we look at the telecom market, we see a sector that tends to consolidate more and more, while the government likes to maintain competition and market forces. That is why we expect government supervision and increasing regulation in the area of ​​competition and data in 2018 to determine the picture in the entire TMT sector. "

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