Information Age: News, analysis & insight for IT & business leaders

Global spending on IT is set to reach $2.6 trillion in 2005 - a 5.6% rise on 2004 levels, according to industry analyst Gartner. But the figures also indicate that investment in Western European countries lags behind their global counterparts, with spending just 3.6% higher than in 2004, at $697 billion.

European businesses' reluctance to commit to IT expenditure is indicative of overall economic weakness, explains Roger Fulton, vice president at Gartner. "In a slow economy organisations become more risk averse, preferring to maintain the status quo rather than deal with investment and change."

But users are warned that such a risk-shy approach to spending could hamper their businesses, as global competitors continue to invest in IT. "A series of upcoming technology and organisational changes will profoundly affect almost every major area of IT," says Peter Sondergaard, global head of research at Gartner.

For example, as US competitors invest in service-oriented architectures and on-demand computing initiatives, it is possible that they will leap ahead of their European rivals. The challenge for European IT leaders is to manage the necessary but complex technological changes, investing even in a slow economy.

Gartner analysts say that this requires IT to extend its current enabling role to one where it becomes a central contributor to the business.