Technology spending is set to grow by 6.4% in the Asia Pacific region, reaching US$710 billion in 2024. This growth is fueled by sustained demand across various sectors including software, services, communications equipment, tech outsourcing, hardware maintenance, and computer equipment.
Software and IT Services Lead the Charge
Software spending in APAC is expected to grow by 10.3% in 2024, marking a vibrant trajectory towards being the largest tech category in the region by 2027, with a forecasted total of US$265.1 billion. Despite the adversities faced on the global stage and regulatory challenges within local markets, such as China, the domain continues to show strong growth. Demand for IT services is also expecting to grow a respectable 6.5% in 2024. Investments in cloud and data are key drivers here. The digital transformation wave, particularly in Southeast Asian economies, encourages this upward trajectory. However, challenges such as the scarcity of tech talent may temper the growth in tech consulting to a more modest rate of 4.9% by 2025.
Communications Equipment and Computer Equipment Remain On a Firm Footing
The communications equipment sector is experiencing a notable uplift, with growth anticipated to be at 5.3% in 2024. The journey towards commercializing 5G plays a pivotal role here, although some flattening in investment is expected from mobile telcos in China. The outlook for computer equipment presents a mixed bag. While the high-end, AI-capable PC segment could see a boost, the broader computing hardware market will continue to remain sluggish. Data centers remain in high demand, though facing challenges related to power supply and especially the pivot towards renewable energy sources.
Looking Ahead: Embracing Innovation
While challenges such as regulatory environments, global economic conditions, and talent shortages present hurdles, the overarching trajectory is one of opportunity and resilience. As the region continues to chart its course in the tech world, the emphasis on sustainable and innovative practices appears key to navigating the future of technology spending in Asia Pacific.
Forrester clients can find more details, including growth forecasts by major APAC countries, in the report here. This report is a thorough collection of significant facts. We found the process of compiling it informative, and we hope you find reading it equally insightful.
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