Rosy economic future for cloud computing says LSE study

Cloud computing could provide a real boost to the economy and create jobs according to LSE research

Cloud is not just the future for IT but the power house that will drive a host of new jobs. That’s according to new research from the London School of Economics (LSE).

Researchers looked at the projected impact of cloud computing on the aerospace and smartphone industries. Countries in the study, which was commissioned by Microsoft, were the UK, USA, Germany and Italy.

The LSE report, Modelling the Cloud, states that investment in cloud computing had a direct and an indirect effect on job creation in both industries, firstly through the construction and staffing of the data centres required for hosting the cloud services and, secondly, by freeing IT staff and other skilled employees  to concentrate on other areas of work.

Perhaps even more importantly in these uncertain times, the LSE research also shows that an investment in cloud computing will not lead to any rise in unemployment as companies will be looking to hire new staff and, contrary to widespread belief, be looking to move and re-train existing employees.

However, the nature of the business also has an effect: the web-focused  smartphone industry is expected to show a far higher growth rate than the aerospace business.  The study predicts that between 2010 and 2014, the number of cloud-related jobs in the UK smartphone sector will be 349 percent – this compares with just 55 percent growth in the aerospace market.

The report’s authors, Jonathan Liebenau, Patrik Karrberg, Alexander Grous and Daniel Castro, write that the arrival of cloud services will be a useful driver for European growth, music to the ears of EU commissioner, Neelie Kroes, who has stressed the importance of cloud computing to the European economy.  To harness this, authors believe that policy makers should follow three guidelines.

  • The provision of improved education and re-training in ‘'eSkills'
  • Provision of incentives for companies to adopt green energy practices that can attract investment in the cloud, particularly in the siting of data centres
  • Ensuring data transfer policies, such as privacy rights protection, do not impede the development of cloud services.

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