The Big Call

Among the predictions I made in New York last week, the one that may mean the most to people in the tech industry is the same one that Steve Lohr picked up for his own blog, noted in the last entry, and supported by IBM shortly after the dinner.

Has the global economy now essentially “outgrown” the U.S.? In most matters, economists would give a qualified “no” to this question. But my bet is that, for the first time, IT spending will continue to grow so quickly outside the U.S., that a decline in U.S. markets will not pull down total spending.

In other words, in the Information Technology universe, the U.S. matters, it just doesn’t matter as much as the rest of the world.

And that, if it turns out to be true, is a first.

Most large IT corporations now make more than half their revenues outside the U.S., and most other countries are showing GDP growth rates that will remain robust, even with a dip in the U.S. China now depends more on Europe than the U.S. (and, interestingly, Europeans fear Chinese trade policies more than Americans, 59% to 50%). India increasingly is doing work that may be outsourced, at the very high end (doctors reading medical imaging, engineers reviewing structural requirements) or may be for domestic or other non-U.S. clients.

Certainly, all of these economies would be hurt by a U.S. recession. But large IT companies, for the first time ever, may be positioned to do better than the original mass IT market.