Tech spending in India to grow by 9.6% in 2023
Forrester is forecasting that global tech spend will grow 4.7% in 2023 to reach $4.4 trillion — 100 basis points lower than Forrester’s previous forecast, which we published in February.
Why the downward revision? In the United States, where Forrester is forecasting tech spend growth of 5.4%, it is because of inflation-induced interest rate hikes and increased unemployment projections. In Europe, where Forrester is forecasting tech spend growth of 3.6%, it is because of the effects of the Russia-Ukraine War and the fall of the Euro and pound against the dollar. In general, still-strained supply chains, slowing liquidity, and innumerable other factors are responsible. Businesses will therefore dial in tech spend, working to reduce costs, improve time-to-market, and support high-value investments.
For 2022–2027, Forrester forecasts that tech spend growth will be driven by:
- Software and services. Spend on tech software and services will grow twice as fast as other tech categories (communications equipment, computer equipment, and telecom services). By 2027, tech software and services will capture 66% of global tech spend, up from 60% pre-pandemic. In 2022, the six largest cloud providers captured 4.7% of global tech spend, as well as 26.4% of tech spend growth between 2018 and 2022. Forrester forecasts that the public cloud market will more than double in size by 2026, reaching $1 trillion and capturing nearly a quarter of global tech spend.
- The Middle East and Africa (MEA) and Asia Pacific (APAC). MEA and APAC will have the fastest regional tech spend growth, with respective growth rates of 6.8% and 6.3%. By 2025, Africa’s internet economy could reach $180 billion, 5.2% of the continent’s GDP. Similarly, by 2025, the Saudi government plans to spend $25 billion on tech through the promotion of technology localization and private sector employment growth. The UAE plans to double the contribution of the digital economy to its GDP from 10% to 20% in the next decade. Software and IT services investment is a large priority for Japan, which is struggling to remedy previous underinvestment in software. India’s domestic tech spend will grow by 9.6% in 2023, while India’s total IT industry, driven by exports, is forecasted to grow 15% in 2022.
- Longer-term R&D investment. As businesses and governments prepare for a turbulent 2023, they will look towards future, R&D-driven gains. Pre-pandemic, US tech companies captured more than one-fifth of private R&D investments, with this share set to rise. China’s State Council aims to have 10% of the country’s GDP come from core digital industries by 2025. India, one of the countries with the fastest tech spend growth, received $11.7 billion in foreign direct investment (FDI) into research and development in 2022. EU members’ government R&D spend grew 6% in 2021.
Technology will remain a focus for the media, businesses, and governments in 2023, even as much else remains uncertain. Technology companies’ performance will be under media scrutiny, with the tech-heavy NASDAQ having lost nearly 30% of its value in 2022. Businesses will look to technology to mitigate skill shortages, employee layoffs, and margin pressures. Governments will see how they can use technology to develop their economies in the long term.
To learn more about our forecasted $4.4 trillion in global tech spend, as well as how spend is distributed by tech category and region, Forrester clients can read the new report, Global Tech Market Forecast, 2022 To 2027. And if you want additional detail on your region, consult Forrester’s technology spend forecasts for 2022–2027 in the United States and Europe. Forrester
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