Global ICT spending to reach $4.3 T in 2023

Global spending on hardware, software, services and telecommunications is set to reach $4.8 trillion in 2023, according to the International Data Corporation (IDC).

The new forecast comes despite a slowing global economy and impending trade war between the United States and China, with the IDC predicting information and communications technology (ICT) purchases will achieve a compound annual growth rate (CAGR) of 3.8% between 2019 and 2023.

“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,” IDC Customer Insights and Analysis Group Program Manager Serena Da Rold said.

“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.

“End-user surveys reflect the impact of this uncertainty on business decision-making, but our forecasts remain roughly stable overall for 2019 compared with our previous release and slightly accelerated in the medium term, driven by stronger growth in software and hardware,” Da Rold concluded.

Commercial purchases will likely account for two-thirds of all ICT spending by 2023, up from 60.4% in 2018 and reaching a 5.1% CAGR, IDC said in its latest forecast.

Banking and discrete manufacturing are expected to spend the most on ICT between 2018 and 2023, followed by professional services, which will also see the fastest growth in ICT spending, largely driven by service provider spending.

Media and personal and consumer services will see a 5.8% and 5.7% CAGR over the forecast period, respectively, as these companies transform their business to offer new services and improve customer experience.

While purchases for planned upgrades and refresh cycles will continue to be the largest driver of commercial ICT spending, new investments in the technologies and services that enable the digital transformation (DX) of business models, products and services and organisations — such as applications, analytics, middleware and data management software as well as server and storage capacity — 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, however (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.

The United States will be the largest geographic market with ICT spending forecast to reach $1.66 trillion in 2023. Western Europe will be the second-largest region with $927 billion in ICT spending in 2023, followed by China at $618 billion. China will also be the fastest growing region with a five-year CAGR of 6.1%.

“In the US, a favourable business climate and strong consumer confidence continues to buoy technology spending and innovative projects. Tech-intense areas such as the financial services sector and telecom industry are holding strong as they are committed to serving their demanding and evolving customers in new and innovative ways,” said IDC Customer Insights and Analysis group Vice President Jessica Goepfert.

Image credit: © stock.adobe.com/au/NicoElNino