CAMBRIDGE, Mass.—Forrester has issued a new Global Tech Market Forecast, 2023 To 2027 that predicts improved economic conditions will help the global technology spend to grow 5.3% in 2024—up from 3.5% growth in 2023.
“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 Europe, greater investment in cybersecurity and the EU’s Coordinated Plan on AI will help the region bounce back. Demand for cloud and AI is strong across all regions, with genAI expected to boost the tech market over the next three years.”
The study finds that two factors will primarily contribute to this growth: Increased spending on software and IT services, including generative AI (genAI), cloud, security, and digital, and economic growth in Asia Pacific.
By 2027, software and IT services will capture 69% of global tech spend, with investments in genAI software predicted to reach $227 billion by 2030 at a 36% compound annual growth rate. Asian countries, especially India, the Philippines, Vietnam, Indonesia, Malaysia, and China, will see the fastest tech spend growth in 2024.
Even so, North America will see strong growth of 5.4% in 2024 the study predicts. Software and IT services will capture 60% of U.S. tech spend in 2027, up from 53% 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.
Asia Pacific will grow 5.7%. India is one of the largest exporters of technology services: IT exports will reach $194 billion in 2023, and total technology and service industry revenues could reach $350 billion by 2025.
Europe will grow 5.1%. 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 see 5.1% to 5.7% growth from 2024 to 2027, driven by higher enterprise digital maturity and more advanced cybersecurity adoption.
More information is available here.
