The looming US-China trade war is not expected to dampen information and communications technology (ICT) spending. IDC is predicting that worldwide ICT spending on hardware, software, services, and telecommunications will rise to US$4.8 trillion by 2023, with a compound annual growth rate (CAGR) of 3.8% over the 2019-2023 forecast period.
"Global market conditions remain volatile, and although the economy has performed broadly better than expected in the past six months in many countries, a sense of uncertainty over the short-term economic and business outlook has been rising at the same time," said Serena Da Rold, program manager in IDC's Customer Insights and Analysis group.
She conceded that confidence indicators are fluctuating on a monthly basis, depending on short-term indicators ranging from speculation over tariffs and trade wars to political wild cards, with a potential global slowdown looming for 2019 and 2020.
Da Rold said: “Digital transformation (DX) and the adoption of automation technologies will be driving investments in applications, analytics, middleware, and data management software, as well as increasing demand for server and storage capacity."
Commercial purchases will account for two thirds of all ICT spending by 2023, up from 60.4% in 2018 and growing at a solid five-year CAGR of 5.1%. Banking and discrete manufacturing will be the industries spending the most on ICT over the forecast period followed by professional services, which will also see the fastest growth in ICT spending, driven largely by service provider spending. Media and personal and consumer services will also grow nicely as these companies transform their businesses to offer new services and improve customer experience.
Planned upgrades and refresh cycles will be the largest driver of commercial ICT spending, new investments in the technologies and services that enable the DX of business models, products and services, and organizations will be a significant source of spending. IDC recently forecast worldwide DX spending to reach $1.18 trillion in 2019.
Consumer ICT spending will grow at a much slower rate (1.5% CAGR) resulting in a gradual loss of share over the five-year forecast period. Consumer spending will be dominated by purchases of mobile telecom services and devices (such as smartphones, notebooks, and tablets).
China will also be the fastest growing region with a five-year CAGR of 6.1%, spending $618 billion by 2023.
Ashutosh Bisht, senior research manager with IDC's Customer Insights and Analysis group, commented that accelerating digital transformation efforts in Asia-Pacific will continue to drive significant investments in technologies in the next few years – from hardware and services to applications.
“The investments are driven by both government and enterprises in the region as they are understanding the value of what these new technologies bring to the overall operational activities. It also harnesses the potential of a lot of initiatives being launched to make the workforce well versed. Upskilling and future-proofing the workforce are on top of employers' and the governments' agenda," he added.