Information and communications technology (ICT) is an enabler of economic progress, and a driving force of the Global Networked Economy. Those organizations that have mastered the applications of next-generation technologies are making waves of market disruption everywhere. That said, expect more of the same, at an accelerated pace in future.
Worldwide spending on ICT will be nearly $4 trillion in 2018, according to the latest global market study by International Data Corporation (IDC). Ongoing growth will be driven by enterprise investment on cloud services, software and Hybrid IT infrastructure.
Global ICT Market Development
The consumer market will account for more than $1.5 trillion in ICT spending in 2018 and will deliver more than one third of all worldwide spending throughout the forecast period. Consumer spending will also experience the slowest growth over the forecast period with a CAGR of 1.2 percent. Roughly 80 percent of consumer spending will go to devices and mobile telecom services.
Banking, discrete manufacturing, telecommunications, and professional services will be the four largest industries for ICT spending in 2018 at more than $900 billion combined. While all four industries will invest heavily in applications, infrastructure, outsourcing, and telecom services, spending levels will vary depending on industry needs.
Banking will invest the most in IT outsourcing and project-oriented outsourcing ($115 billion combined) while telecommunications spending will be led by infrastructure purchases ($85 billion). Professional services and banking will experience the fastest growth in ICT spending with five-year CAGRs or 5.9 percent and 5.2 percent, respectively.
The United States will see $1.3 trillion in ICT spending in 2018 making it the largest geographic market this year and throughout the forecast, with spending expected to grow at a CAGR of 3.6 percent. China will be the second largest market for ICT spending at $499 billion this year with solid growth (5.2 percent CAGR) forecast through 2021.
Japan, the UK, and Germany will round out the top five countries for ICT spending in 2018. The countries that will experience the fastest ICT spending growth over the 2016-2021 forecast period are the Philippines (7.5 percent CAGR), India (7 percent CAGR), and Peru (6.7 percent CAGR).
"The growth of technology spending in the U.S. professional services industry is propelled by the tech-savvy firms that comprise it. Meanwhile, banks and retailers share the common desire to deliver a delightful, cohesive, channel-agnostic customer experience. These initiatives are enabled by technology investments to help organizations unite their physical and online worlds," said Jessica Goepfert, program director at IDC.
In terms of company size, the small office category will account for 7 percent all ICT spending throughout the forecast period. Most of this spending (around $100 billion per year) will go toward fixed and mobile telecom services, while devices will also be a significant spending category.
On the other end of the spectrum, very large businesses will account for more than 50 percent of all ICT spending throughout the forecast. These businesses will focus the majority of their spending on IT outsourcing, project-oriented outsourcing, applications, and infrastructure as they pursue their digital transformation strategy.
The spending patterns for small businesses will closely resemble those of the small office category with slightly more spending going toward applications and outsourcing. Medium and large businesses will experience more balanced spending across all technology categories.
Outlook for Global IT Investments
Spending on information technology (IT) will reach $2.16 trillion this year, led by business and consumer spending on devices, applications, IT outsourcing, and project-oriented outsourcing -- including application development and system and network implementation.
In addition, more than $300 billion will be spent on business process outsourcing and business consulting services this year. Telecommunications spending is forecast to be $1.5 trillion this year, with 95 percent of the total going to fixed and mobile telecom services.
Mobile phones will be the largest segment of technology spending at nearly $500 billion in 2018, followed by mobile data and mobile voice at more than $400 billion each.