Forrester: Global Tech Spend To Grow 5.3% In 2024, Reaching $4.7 Trillion
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Insights
The projected increase in technology spending, particularly the 5.3% growth in 2024, is indicative of a broader digital transformation trend. This uptick is significant as it suggests a rebound from slower growth rates in 2023. The emphasis on software and IT services, which are expected to dominate global tech spending by capturing 69% of the market, demonstrates a shift in business priorities towards digital infrastructure, cloud computing and cybersecurity.
From a market research perspective, the compound annual growth rate of 36% for genAI software by 2030 is a strong indicator of the technology's disruptive potential. Investors and businesses should monitor the development of genAI closely, as it may lead to new business models and revenue streams. The Asia Pacific region's rapid growth, especially in the six countries mentioned, suggests a reallocation of global tech investment focus, with potential implications for supply chains and global market strategies.
India's IT export market, forecasted to reach $194 billion in 2023, is a critical element to consider for investors examining the tech sector. The substantial revenues from technology services underscore the country's role as a significant global player in the industry. Additionally, the expected growth across all regions, including a 5.7% increase in the Asia Pacific, 5.4% in North America and 5.1% in Europe, indicates a healthy expansion rate that could have positive effects on related stocks and sectors.
Investors should note the varying growth rates across different industries, such as financial services and healthcare, which may offer targeted investment opportunities. The influence of government initiatives, like the CHIPS and Science Act in the US and the EU's Coordinated Plan on AI, could also serve as catalysts for sector-specific growth and are worth tracking for their impact on market valuations and investor sentiment.
The correlation between economic growth in the Asia Pacific region and increased tech spending is noteworthy. It highlights the role of technological advancement as a driver of GDP growth. The focus on emerging technologies like genAI and cloud services suggests that economies investing heavily in these areas could experience accelerated growth and increased competitiveness on the global stage.
Long-term, the shift towards software and IT services could lead to job market transformations and require a reevaluation of economic policies to support this sector's growth. The data points to a potential reshaping of global economic dynamics, with Asia Pacific countries positioning themselves as leaders in tech innovation and exports. The ripple effects of this shift could influence trade balances, currency valuations and international relations.
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Global tech spend is expected to reach
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Asia Pacific will grow5.7% .India is one of the largest exporters of technology services: IT exports will reach$194 billion $350 billion
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North America will grow5.4% . Software and IT services will capture60% of US tech spend in 2027, up from53% in 2018. Financial services and healthcare will see the fastest tech spend growth in 2024, with more modest growth in retail, manufacturing, transportation, and logistics.
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Europe will grow5.1% . After a challenging 2023, the European economy will recover in 2024 to grow almost double the rate compared to the previous year. Longer term, European tech spend will see5.1% to5.7% growth from 2024 to 2027, driven by higher enterprise digital maturity and more advanced cybersecurity adoption.
“Technology companies faced significant economic headwinds this past year, but 2024 promises a better outlook,” said Michael O’Grady, principal forecast analyst at Forrester. “Asia will see the fastest economic growth due to India’s growing IT export market as well as significant investments in tech innovation. Similarly, in the US, heavy investments in emerging technologies through the development of three primary CHIPS and Science Act agencies will fuel tech spend growth. In
Resources:
- Read Forrester’s Global Tech Market Forecast, 2023 To 2027 (client access required).
- Learn more about Forrester’s Global Tech Market Forecast, 2023 To 2027, in this blog.
- Read Forrester’s US Tech Market Forecast, 2023 To 2027 (client access required).
- Learn more about Forrester’s US Tech Market Forecast, 2023 To 2027, in this blog.
- Read Forrester’s European Tech Market Forecast, 2023 To 2027 (client access required).
- Learn more about Forrester’s European Tech Market Forecast, 2023 To 2027, in this blog.
About Forrester
Forrester (Nasdaq: FORR) is one of the most influential research and advisory firms in the world. We help leaders across technology, customer experience, digital, marketing, sales, and product functions use customer obsession to accelerate growth. Through Forrester’s proprietary research, consulting, and events, leaders from around the globe are empowered to be bold at work — to navigate change and put their customers at the center of their leadership, strategy, and operations. Our unique insights are grounded in annual surveys of more than 700,000 consumers, business leaders, and technology leaders worldwide; rigorous and objective research methodologies, including Forrester Wave™ evaluations; 100 million real-time feedback votes; and the shared wisdom of our clients. To learn more, visit Forrester.com.
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Hannah Segvich
hsegvich@forrester.com
Source: Forrester
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