London School of Economics Study: Cloud Computing Is The Next Biggest Take To Pump And Promote The Global Economic Growth

Posted on Jan 27 2012 - 4:20pm by Editorial Staff

According to a new study by the London School of Economics and Political Science, the development of cloud computing will promote economic growth, increase productivity and shift the type of jobs and skills required by businesses. The study, commissioned by Microsoft, looked at the projected economic impact of cloud computing on the aerospace and smartphone services industries in the UK, USA, Germany and Italy from 2010-2014.

Investing in cloud computing contributes to growth and job creation in both the fast-growing, hi-tech smartphone services industry as well as the longstanding and slow-growth aerospace sector. In addition, it is directly creating employment through the construction, staffing and supply of data centres, which will host the cloud. Using cloud computing enables businesses of all sizes to be more productive by freeing managerial staff and skilled employees to concentrate on more profitable areas of work.

Commenting on the study, John Vassallo, Vice President EU Affairs at Microsoft said:

‘‘Cloud computing and the explosion in access to technology is impacting the character of work across industries, generating new skills demands, employment and growth opportunities.

“LSE’s study underscores these phenomena using rigorous economic analysis that forecasts growth as a result of the transition to cloud technologies in two major industrial sectors – aerospace and smart phones. The findings highlight that Europe has real opportunity to capture the Cloud’s potential, with particular benefit to SME’s as well as new business creation through emerging Cloud services.”

The LSE study also shows that there is in fact little risk of unemployment from investing in the cloud, as companies are more likely to move and re-train current staff. This would be alongside the hiring of new staff, likely to be in a higher salary bracket, which has the necessary skills for using virtual data-handling systems.
But researchers found that the level of impact the cloud has on a business or department’s growth and productivity depends on a number of factors, primarily the type of sector in which the business is involved and the regulatory environment in which it operates.

Of the countries analysed in the study, the US is leading the way in terms of cloud job creation. US cloud-related jobs in the smartphone sector are set to grow to 54,500 in 2014. This is compared to a projected 4,040 equivalent jobs in the UK. The authors of the study say that this can be attributed, in part, to lower electricity costs and less restrictive labour regulation compared to Europe.

In the UK from 2010 through 2014, the rate of growth in cloud-related jobs in the smartphone services sector is set to be 349%, compared to 52% growth in aerospace. German, Italian and US equivalent growth rates will be 280% vs 33%, 268% vs 36% and 168% vs 57% respectively. Unsurprisingly, the cloud has a much greater effect on the web-centred smartphone services industry than traditional high tech manufacturing, with expansion and high-start-up rate among small and medium size businesses in 2010-2014 forecast.

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