APAC businesses prioritize ICT budgets

Photo by Burak The Weekender

Recent data from the IDC Worldwide ICT Spending Guide: Enterprise and SMB by Industry reveals that the total ICT Spending in the region has surged past the $1.3 trillion mark in 2023 and is expected to grow at a robust compound annual growth rate (CAGR) of 4.6% by the end of 2027.

Businesses across the Asia/Pacific region are strategically investing in technology to not just survive but thrive amidst looming global economic uncertainties.

Organizations within Asia/Pacific are redefining their spending priorities, shifting away from traditional hardware investments towards cloud services, automation, and sustainability initiatives; this strategic reallocation of resources underscores a pivotal shift from mere expenditure to smart, future-oriented investments in technology.

“As global uncertainties persist, Asia/Pacific’s strategic tech investments demonstrate a clear message: embracing innovation is not a luxury, but a necessity for survival and sustained growth,” says Mario Allen Clement, Associate Research Manager, Data & Analytics, Asia/Pacific. “Those who navigate these challenges and leverage technology effectively will be best positioned to weather the storm and emerge as leaders in the new digital landscape,” he added.

The top 10 Fastest growing industries in the Asia/Pacific region now account for almost 20% of the total ICT spending market, driven by factors such as product innovation, data proliferation, and supportive government policies.

Sectors like Software and Information Services are experiencing significant growth, propelled by increasing demand for digital solutions and evolving regulatory landscapes. These sectors’ internal teams become the first testbed for any new technologies they plan to offer their potential customers.

Rising healthcare demand, customized value-based care, digital health adoptionand regulatory requirements are fueling healthcare payer IT spending in Asia/Pacific. Within the Capital market, spending is surging due to economic growth in the region such as tech innovation,digitalization, sustainability and talent. While challenges like infrastructure gaps and affordability persist, embracing technology is becoming a key weapon for navigating the uncertainties and emerging stronger as global pressure builds.

“2024 onwards, as regional growth steadily aligns with pre-pandemic levels and IT budgets demonstrate resilience, we anticipate a boost in economic performance. Strategic investments in IT and AI innovation will play pivotal roles, outpacing GDP growth and enhancing productivity”, says Vinay Gupta, Research Director, Data & Analytics, Asia/Pacific.

“This era of IT budget optimization but increased investment in Gen-AI and related innovation underscores the criticality of technology in competitive strategy and business planning for sustainable success,” he added.

Large businesses (500-999) and Very Large Businesses (1000+) in Asia/Pacific are boosting their ICT spending, which is forecast to grow at 7.1% Year-on-Year (YoY) compared to 2022, This is mainly led by software solutions and industries embracing digital transformation.

SMB and SOHO ICT market is thriving, projected to grow at 4.3% YoY compared to 2022. This dynamism is fueled by rapid digitization, government support, and affordable cloud solutions. However, affordability, limited IT expertise, and cybersecurity threats pose challenges, particularly for SOHOs. Despite these hurdles, mobile wallets, digital payments, and AI adoption signal promise for the future.