New forecasts from Forrester predict healthy 5.3% growth in technology spending through 2024, up significantly from the previous year’s 3.5%.
With economic conditions slowly showing signs of improvement, two key factors are expected to drive growth going forward: increased investment in software and IT services and the revival of economic activities, particularly in the Asia-Pacific region, including China.
Forrester expects that software and IT services will account for more than two-thirds (69%) of global technology spending by 2027.
Companies are spending more on technology
The company predicts that investments in generative AI software will reach approximately $227 billion by 2023, at a compound annual growth rate of 36%.
Soon, total global spending on technology will peak at $4.7 trillion by 2024. Europe and North America are expected to post growth rates of 5.1% and 5.7% respectively as they recover from a difficult few years financially.
Forrester attributes Europe’s growth to higher enterprise digital maturity and advanced cybersecurity adoption, while North America is expected to spend more on financial services and healthcare.
However, with a growth rate of 5.7%, the Asia-Pacific region will lead the way, especially India, the Philippines, Vietnam, Indonesia, Malaysia and China.
Michael O’Grady, chief forecasting analyst at Forrester, shared a positive message: “Technology companies have faced significant economic headwinds over the past year, but 2024 promises a brighter outlook.”
O’Grady added a comment that will come as no surprise to anyone with even the slightest involvement in the technology industry: “Demand for cloud and AI is high across all regions, with genAI expected to dominate the technology market over the next three years will stimulate. ”
As IT spending increases, suppliers and manufacturers will face increased demand, giving them the opportunity to increase prices. Although not mentioned in the study, Forrester’s research has us wondering whether now would be a good time to upgrade your company’s IT before prices rise.