Skip to main content

ICT Infrastructure Investment will Reach $4.6 Trillion

Business spending on information and communication technologies (ICT) may evolve over the next five years as the global economy puts pressure on organizations to increase technology investment because growth and competitiveness are increasingly dependent upon digital transformation, artificial intelligence (AI), and data analytics leadership.

Worldwide ICT spending on hardware, software, services and telecommunications will reach $4.6 trillion by 2022, representing average growth of 4 percent per year. Commercial customers will represent around 63.5 percent of total spending by 2022 ($2.9 trillion), while consumers will still account for 36.5 percent ($1.7 trillion), according to the latest market study by International Data Corporation (IDC).

Global ICT Market Development

Consumer spending growth will lag behind business and government spending due to increasing saturation in smartphones and media tablets. The fastest growth will come from the professional services segment (7 percent), including cloud and digital service providers, which will account for a rapidly increasing share of overall technology spending.

Other fast-growing segments include media (+6 percent), banking (+5 percent), retail (+5 percent), and manufacturing (+5 percent), while the slowest growth in commercial technology budgets will come from federal government, followed by wholesale and construction firms.

"In the short term, the trade war between the U.S. and China continues to add volatility to the outlook," said Stephen Minton, vice president at IDC. "Some firms are also facing the double whammy of weaker sales in China, an increasingly important export market for the manufacturing industry. Meanwhile, the impact in China itself could persist over a longer period of time, with manufacturing and financial services firms being the most exposed."

Countering negative sentiment around the economy in China is increasing demand for ICT solutions related to digital transformation. This is driving major investments by large enterprise and state-owned customers in industries such as retail, manufacturing, healthcare, and financial services, especially around cloud and AI.

In fact, digital transformation is also driving technology investment within Europe.

Companies in Western Europe are looking to embrace new technologies like AI and robotics to improve their business processes, also they are adopting more customer-centric approaches to IT spending decisions. This is especially true in customer-facing industries like retail, banking, transportation, and telecommunications.

Overall growth in Western Europe will slightly lag emerging markets in Asia-Pacific over the forecast period, but the U.S. market is set to post some of the strongest growth rates in spite of its relative maturity.

According to the IDC assessment, business investments in digital transformation, cloud, and AI will help drive overall U.S. growth of 4.5 percent over the forecast, equaling Latin America as the second fastest growing region for total ICT spending after China.

Outlook for Technology Applications Growth

"In the U.S., the professional services industry is expected to continue with strong technology growth and investments. The appetite for cloud-based delivery, new apps, and tech-fueled services show no signs of slowing, and thus we are optimistic about the growth opportunity for this industry," said Jessica Goepfert, vice president at IDC.

Consumer-driven industries such as retail and hospitality are benefitting from higher wages and disposable incomes. In response, firms in this space are working to develop and deliver unforgettable customer interactions. This takes shape as customizable experiences and infusing technology into their operations. For instance, hotels are implementing technology in guest rooms that can be controlled by mobile apps.

Popular posts from this blog

Bold Broadband Policy: Yes We Can, America

Try to imagine this scenario, that General Motors and Ford were given exclusive franchises to build America's interstate highway system, and also all the highways that connect local communities. Now imagine that, based upon a financial crisis, these troubled companies decided to convert all "their" local arteries into toll-roads -- they then use incremental toll fees to severely limit all travel to and from small businesses. Why? This handicapping process reduced the need to invest in building better new roads, or repairing the dilapidated ones. But, wouldn't that short-sighted decision have a detrimental impact on the overall national economy? It's a moot point -- pure fantasy -- you say. The U.S. political leadership would never knowingly risk the nation's social and economic future on the financial viability of a restrictive duopoly. Or, would they? The 21st century Global Networked Economy travels across essential broadband infrastructure. The forced intro...