New forecasts from Forrester have projected a healthy 5.3% growth in technology spend for 2024, a significant boost over the 3.5% measured in the previous year.
As economic conditions show slow signs of improvement, two key factors are expected to fuel the growth moving 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 software and IT services to account for more than two-thirds (69%) of global tech spend.
Businesses are spending more on tech
The firm predicts that, by 2023, investments in generative AI software will total around $227 billion at a 36% rate of compound annual growth.
More imminently, 2024 will see total global tech spend reach highs of $4.7 trillion. Europe and North America are expected to see 5.1% and 5.7% growth rates respectively, as they recover from a challenging few years financially.
Forrester credits Europe’s growth to higher enterprise digital maturity and advanced cybersecurity adoption, while North America is expected to spend more on its financial services and healthcare sectors.
However, leading the way with a 5.7% growth rate will be Asia-Pacific, predominantly India, the Philippines, Vietnam, Indonesia, Malaysia, and China.
Michael O’Grady, principal forecast analyst at Forrester, shared a positive message: “Technology companies faced significant economic headwinds this past year, but 2024 promises a better outlook.”
O’Grady added a remark that will come as no surprise to anybody with even the slightest involvement in the tech industry: “Demand for cloud and AI is strong across all regions, with genAI expected to boost the tech market over the next three years.”
With IT spend on the up, suppliers and manufacturers will face greater demand, buying them the potential to raise prices. Though it’s not mentioned in the study, Forrester’s research has left us wondering whether now would be a good time to upgrade your business’s IT before prices rise.
