Global tech spending to hit $4.7 trillion by 2024

Global technology spending is the total amount of money spent on technology products and services by businesses, governments, and consumers around the world. It includes spending on hardware, software, services, and infrastructure.

Global technology spending has grown steadily in recent years, driven by a number of factors, including the growing adoption of cloud computing, the growth of artificial intelligence (AI) and growing demand for connectivity.

The largest spending segment in the global technology sector is software, accounting for 40% of total spending in 2023. The next largest segments are hardware (26%), services (24%) and infrastructure (10%).

The US is the largest market for global tech spending, accounting for 32% of total spending in 2023. China is the second largest market, accounting for 20% of total spending.

The rise in technology spending is having a significant impact on the global economy. It is creating jobs, driving innovation, and helping businesses become more efficient and productive.

2024 promises to be an exciting year for the technology market, from the rapid growth of the Asia-Pacific market, the huge demand for software, the scalability of Generative AI to the growing need for green transformation and digital transformation.

Additionally, economic conditions will improve this year due to lower energy prices, a recovery in supply chains, and a decline in inflation. Forrester forecasts global tech spending will reach $4.7 trillion in 2024, growing 5.3%, which is considered a significant improvement from 2023's growth of 3.5%.

Overall, the technology picture in 2024 is quite bright with many positive signals. Many people are cautiously optimistic about the strong growth potential of this field in 2024.

Asia-Pacific to lead growth, tech spending up 5.7%

According to the International Monetary Fund (IMF) World Economic Outlook, the Asia-Pacific region will lead the way in terms of growth. Among major economies, the six economies that are forecast to have the largest real GDP growth in 2024 are all from this region, including India, the Philippines, Vietnam, Indonesia, Malaysia and China. Accordingly:

The Asia-Pacific region will grow 5.7%.Leading the region is India, one of the world’s largest exporters of technology services, with rapid growth in domestic and government technology spending reaching 9.5% by 2024. In China, the digital economy is estimated to account for 41.5% of GDP. Meanwhile, the report found that in Japan, 60% of small and medium-sized enterprises have not yet started their digital transformation process, and 80% of digital investments are used for maintenance and operations.

North America will grow 5.4%.In this region, the financial services and healthcare sectors will have the fastest growth in technology spending through 2024. Information technology (IT) software and services will account for 60% of US technology spending by 2027, up from 53% in 2018. The US government is allocating $25 billion to emerging technologies through 2024 through the CHIPS and Science Act.

The Eurozone will grow 5.1%.Europe will bounce back from a difficult 2023, when technology spending grew by just 2.6%. Europe needs to accelerate its technology spending growth further to achieve its digital business development goals. If current trends continue, only 66% of businesses will use cloud computing, 34% big data and 20% AI, far short of the 75% target set for 2030.

Software, generative AI, green transformation and digital transformation are the focus of 2024

In 2024, Forrester recommends that businesses invest in technology that supports sustainable growth in the future. Three key areas to focus on include software, generative artificial intelligence, and green and digital transformation.

These areas will help businesses become more adaptable and flexible by streamlining their operations, paving the way for future growth. At the same time, they will reduce risks for businesses by creating a sustainable, safe environment and reducing negative impacts on the environment.

Software field:Both custom and off-the-shelf software revenue will grow by double digits. Demand for cloud services is strong. Microsoft's cloud revenue will grow 27% in fiscal 2023, while Google Cloud revenue will grow 26% in the first nine months of 2023.

Investment in artificial intelligence software is forecast to increase 36% annually from 2023 to 2030, reaching $227 billion.

Field of artificial intelligence:Major consulting firms are shifting to providing AI-based solutions to build a track record of delivering solutions, a key factor in attracting clients. Over the next three years, French digital services firm Capgemini plans to invest $2 billion in generative AI, while global audit firm PwC (UK) and multinational IT consulting and services firm Cognizant (US) are each investing $1 billion.

Leading companies in generative AI are partnering with major cloud providers to access computing power, such as OpenAI with Microsoft, Anthropic and Stability AI with Amazon, and Cohere with Oracle.

Green transformation and digital transformation fields:Governments are under pressure to control the energy consumption of data centers, which without effective controls can account for up to 4% of global electricity consumption. Accordingly, the European Climate Neutral Data Center Pact commits to achieving carbon neutrality for data centers by 2030.

Research shows that innovative companies have faster revenue growth, and companies with higher levels of digital investment also have greater productivity growth.