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1 IT Environment 11 Country Overview The UK economy has grown for eight consecutive years Prospects for continued growth are strong and real GDP growth is expected to rise above 2 percent in 2001 despite the global economic slowdown All of the one hundred largest US companies have established operations in the UK The UK attracts over 20 of global inward investment destined for Europe and nearly 40 of investment projects from the Far East and the United States The services sector including banking insurance and investment management accounts for almost 70 of the UKs GDP Britains telecommunications sector is among the most liberal in Europe providing opportunities for innovative services and service providers Broadband is in the process of being rolled out across the country The British economy is market-driven with independent regulatory bodies supervising some sectors where the general public is affected including the telecommunications sector The recent passing of the UK digital signature and data protection regulations are expected to accelerate the use of the Internet and e-commerce The UK has no significant trade or investment barriers or restrictions on the transfer of capital The barriers that do exist are due to EU Directives and regulations An EU common external tariff applies to all non-EU imports and a local valued-added tax of 175 percent applies to most transactions including imports Road and rail transportation and distribution in the UK needs capital investment for modernization and the government has planned significant capital injection over the next few years 12 UK Information and Communications Technology ICT Overview The UK telecommunications infrastructure is highly developed The UK is extensively cabled and has ISDN bandwidth on demand Digital TV will play a major role in bringing the Internet to non-PC users with half of the population expected to go digital by 2005 Due to the continued dominance of the traditional telecommunications carriers the cost of local calls
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