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Emerging APAC markets to see 4.7% surge in IT spending

As the economy recovers, firms in emerging APAC markets will be doubling down on IT spending to accelerate digital business transformation, states Gartner

|Feb 7|magazine7 min read

The emerging Asia Pacific markets are expected to enjoy a 4.7% year-on-year surge in IT spending in 2021, to US$236 billion, according to the latest forecasts by Gartner, which p rojects global IT spending could hit US$3.9 trillion in 2021, an increase of 6.2% on 2020.

This emerging Asia Pacific market category, which includes India, Indonesia, Malaysia, Thailand and others (but not China, Singapore, Australia, New Zealand or South Korea) is expected to witness an even bigger increase in IT spend in 2020, up 6.4% to US$251 billion, as the region’s organisations try to catch up with digital transformation in the wake of the pandemic. 

More than other regions, these emerging APAC countries witnessed a significant decline in IT spending during 2020, a 6.1% decrease on the previous year netting only US$225 billion, no doubt having been negatively affected by the effects of COVID-19. 

According to Gartner’s research, businesses will need to advance digital transformation plans five years to survive in a post-pandemic world with some regions needing greater advancement to catch up. 

APAC to accelerate digital transformation plans

According to Gartner’s VP of Distinguished Research, John Lovelock, companies will be forced to accelerate digital business transformation plans at least five years to survive the post-COVID-19 world, a business environment with a permanently higher adoption of remote work and digital touch-points.

“With the economy returning to a level of certainty, companies are investing in IT in a manner consistent with their expectations for growth, not their current revenue levels,” states Lovelock.

Enterprises are industrialising remote work for employees as quarantine measures keep employees at home, and as countries continue remote education throughout the year “there will be a demand for tablets and laptops for students”, says Lovelock. 

In fact, digital business transformation is likely to be a huge spending driver through 2024, with areas such as “cloud computing, core business applications, security and customer experience at the forefront”, while optimisation initiatives, such as hyper-automation, will continue, the focus of which “will remain on returning cash and eliminating work from processes, not just tasks”. 

Furthermore, states Lovelock, “greater levels of digitalisation of internal process, supply chain, customer and partner interactions, and service delivery is coming in 2021” enabling IT to transition from supporting the business to being the business. 

China and Singapore to see greater IT spend growth

The mature Asia Pacific market, which includes Singapore, South Korea, Australia and New Zealand, are likely to see an overall lower IT spend this year, at 3.1%, to US$174 billion, except Singapore which Gartner predicts will witness an IT spending increase to 5.2% growth in 2021, states Gartner. 

However, China, Hong Kong and Taiwan, are expected to enjoy substantial growth of 10.4% this year, netting US$498 billion, as the countries advance digital transformation plans considerably, with a slimmer growth expected in 2022. 

Gartner research
The February issue of Business Chief APAC