There will be impact on the information and communications technology (ICT) spending in the wake of the Russia-Ukraine war.
IDC expects a steep decline and slow recovery for ICT spending in Russia and Ukraine. The global impact of this decline will be somewhat limited. Russia and Ukraine account for 5.5 percent of all ICT spending in Europe and 1 percent worldwide.
At the same time, the crisis’s likely impact on trade, supply chains, capital flows, and energy prices will affect the global economy on a broader scale with negative consequences for both the regional and worldwide ICT market.
The conflict has halted business operations in Ukraine while the Russian economy is feeling the early impact of Western sanctions. This will affect tech spending in both countries with double-digit contraction of local market demand expected in 2022.
Tech spending among Western European countries may increase in part due to expanded defense and security allocations.
More than 100 global companies have subsidiaries in Ukraine and many more have operations in Russia. The conflict has already displaced tens of thousands of developers in Ukraine and led to the relocation of some services in both countries. These relationships, along with the physical assets and personnel associated with them as well as any future expansion plans, will need to be reevaluated in light of the conflict.
Exports of finished products and technology components to Russia will be significantly affected by the sanctions, but the impact to Western companies will relatively small given the size of the market. Imports of tech materials from Russia and Ukraine will be affected, particularly in the semiconductor sector where supplies of neon gas, palladium, and C4F6 used in chip manufacturing will be greatly reduced.
IDC Global CIO Quick Pulse Survey found that more than half the respondents are reassessing their tech spending plans for 2022, with 10 percent expecting strong adjustments to their ICT investment plans, said Andrea Siviero, associate research director, European Customer Insights & Analysis.