Rise In Protectionist Agenda May Hit Delivery Of IT Services

The ongoing economic challenges across the globe are giving rise to yet another wave of protectionism, says Ovum.

hidden June 04, 2012 13:49:15 IST
Rise In Protectionist Agenda May Hit Delivery Of IT Services

The ongoing economic challenges across the globe are giving rise to yet another wave of protectionism, says Ovum.

In a new report, the independent technology analyst firm states that the current economic and political climate is driving a growing protectionist agenda. Indeed, the positive sentiment that was being seen in the last 12 months has been suppressed by a negative outlook for the eurozone, a stuttering US recovery and slowdowns in the likes of Brazil, China and India during the past six months.

Jens Butler, Ovum IT Services analyst and author of the report, said, “Protectionism is a complicated beast with the underlying sentiment being to protect local jobs, especially with the raft of elections happening in the near term. However, this rise in the protectionist agenda may well have a negative impact on the delivery of IT services, given their need for relatively open borders and ease of transport of resources as well as capital and intellectual property.”

Butler commented, “With the largest services and ‘bundled’ markets being the US and Europe, the varying set of barriers being thrown up are driving multiple countermeasures, including transferring resources to higher growth regions such as Asia-Pacific and Latin America.”

Further counters to these protectionist trends, include updating delivery architectures, the creation of alternative delivery models and capabilities, and the development and implementation of flexible contractual and operational structures.

Butler continued, “Their actions are not just a counter to the growing protectionist tendencies, but are part of an increase in expansionary strategies with risk mitigation at their core.”

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