Forrester's new forecasts have projected a healthy 5.3% growth in technology spending by 2024, a significant boost from the 3.5% measured the previous year.
As economic conditions show slow signs of improvement, two key factors are expected to drive growth going forward: increased investments in software and IT services and the resurgence of economic activities specifically in the Asia-Pacific region, including China.
By 2027, Forrester expects IT software and services to account for more than two-thirds (69%) of global technology spending.
Companies are spending more on technology
The firm predicts that by 2023, investments in generative AI software will amount to around $227 billion at a compound annual growth rate of 36%.
More imminently, in 2024 total global technology spending will peak at $4.7 trillion. Europe and North America are expected to see growth rates of 5.1% and 5.7% respectively, as they recover from a financially difficult few years.
Forrester attributes Europe's growth to greater business digital maturity and advanced adoption of cybersecurity, while North America is expected to spend more in its financial services and healthcare sectors.
However, leading the way, with a growth rate of 5.7%, will be Asia-Pacific, predominantly India, the Philippines, Vietnam, Indonesia, Malaysia and China.
Michael O'Grady, senior forecasting analyst at Forrester, shared a positive message: “Technology companies faced significant economic headwinds last year, but 2024 promises a better outlook.”
O'Grady added a comment that won't surprise anyone even remotely involved in the tech industry: “Demand for cloud and AI is strong across all regions, and genAI is expected to drive the tech market over the next three years.” . “
With increased IT spending, suppliers and manufacturers will face greater demand, allowing them to increase prices. Although not mentioned in the study, Forrester's research has us wondering if now would be a good time to upgrade your company's IT before prices rise.
