In a recent update to the International Data Corporation (IDC) Worldwide ICT Spending Guide: Enterprise and SMB by Industry, it was revealed that worldwide spending on information and communications technology (ICT) approached a staggering $4.7 trillion in 2022. Despite a slightly slower 2023, the ICT industry is forecasted to experience steady growth through 2027, boasting a 5.7 percent compound annual growth rate (CAGR).
The software and information services sector is anticipated to be the standout performer during the 2023-2027 forecast period, with an impressive 11.4 percent CAGR. This surge is attributed to a strategic shift by technology companies, engaging in course correction initiatives following rapid expansion in investments and hiring observed in previous years. Following closely is the capital markets industry with a projected CAGR of 10.2 percent, and the life sciences industry with an 8.8 percent CAGR, partially fueled by substantial growth in China.
In 2022, the top three ICT spending industries were banking, federal/central government, and telecommunications, cumulatively contributing $715 billion to the global ICT expenditure. Software and information services, along with retail, followed as the next largest spenders, collectively constituting nearly 35 percent of the total spending.
The growth trajectory is expected to be driven primarily by software, boasting an impressive 12.0 percent CAGR. Key areas within the software category, including artificial intelligence applications (36.3 percent CAGR) and integration and orchestration middleware (22.1 percent CAGR), will spearhead this upward momentum. Hardware and telecom services, while representing the largest areas of ICT spending, are projected to grow at a slower pace, with CAGRs of 4.2 percent and 2.6 percent, respectively. Business services and IT services are expected to align closely with the overall market average.
Geographically, the United States is slated to be the largest market in terms of ICT spending, anticipated to reach a remarkable $2.38 trillion by 2027. Following suit, Western Europe is projected to be the second largest market, with investments totaling $1.19 trillion, and China not far behind at $721 billion. Latin America is anticipated to witness the most rapid spending growth, boasting a five-year CAGR of 8 percent, closely trailed by the USA and China.
The future of ICT expenditure appears promising, fueled by strategic realignments within the industry and burgeoning technological advancements, particularly in the realm of software and information services. As the world increasingly relies on technology for various facets of life and business, the ICT sector is poised for substantial growth in the years to come. Stay tuned for further updates on this evolving global landscape.