IT will rescue Britain, insists Microsoft boss

Ballmer predicts thousands of new computing jobs but calls for investment in skills

Britain's information technology industry will create almost 80,000 jobs over the next four years and will be vital to the country's economic recovery, according to the boss of Microsoft.

Steve Ballmer, who was appointed chief executive of the US computer giant in 2000, said yesterday: "There will be three times as many jobs created in the information technology sector [as] in the economy at large."

He predicted that 2,500 new IT companies would set up in the UK by 2013, creating 78,000 jobs. The forecast was compiled by the research company IDC, which expects £50.2bn to be spent on information technology in the UK this year.

Mr Ballmer was presenting the Confederation of British Industry's annual lecture, entitled "Thriving and Surviving". He introduced the crowd to Microsoft's mantra of "new efficiency", where technology would provide customers with more for less.

He added: "[The economy] may be down for a while, but we should be able to survive with the right framework and innovation. Innovation should get us back on the path to long-term economic growth."

Mr Ballmer called for more investment in education, especially science and technology, and warned that the West had fallen behind emerging economies. "We need business leadership and the right regulatory framework from governments. Then innovation will solve all the problems," he said.

Microsoft had not been immune from the recession, Mr Ballmer admitted, with businesses spending down by 20 per cent and consumer spending also falling. But he insisted that despite its first decline in revenue, Microsoft was in good shape, saying: "I had to concede that any revenue decline is severe if you've never had one, but it was only a few per cent."

He called the global credit crisis a "cultural reformation" for Microsoft because the company "couldn't continue to invest like we had". He said that in the wake of the credit crunch "the real productivity growth driving gross domestic product will be work processes and innovation".

GDP growth was bound up in information technology, Mr Ballmer explained, and the US and the UK were "increasingly based on services not manufacturing". "Services are driven by better use of information," he said. "I see more scope for innovation in information technology than ever in the next five to 10 years."

Today, Microsoft will unveil its first Windows-based mobile phone. Mr Ballmer also said his company's decision to take on Google by launching its Bing internet search engine was paying off. "We haven't blown the doors off yet but people are pleased with the product and it is growing," he said.