2022 has been a wild ride, from market swings to organizational turmoil to weakening consumers. The global stock market lost $18 trillion in value, with the tech-heavy Nasdaq-100 slumping 35%. Tech companies have seen growth screech to a halt, prompting mass layoffs across the industry. And uncertainty is likely only to continue, with Forrester forecasting US tech spend growth of only 5.4% in 2023, compared to 7.4% in 2022.
Both the roller coaster that was 2022 and the challenge that is 2023 highlight the need for executives to better integrate market insights into their overall technology strategy. As a result, Forrester launched its Technology Insights and Econometric Research (TIER) — research focused on labor, investments, budgets, and productivity — that can help technology execs calibrate strategy to unfolding market conditions and adapt with predictive, option-oriented actions to yield stronger results.
To help execs prepare for 2023, we just published a new report, Use Forrester’s Tech Insights And Econometrics Research To Plan For 2023, to give insight into what labor, investments, budgets, and productivity will look like this year. Here are some key highlights from the report to stay ahead of in 2023:
- The US labor market will remain tight in 2023. The US labor market remained tight in 2022, even though all indicators pointed to an expansionary period, perhaps indicating a larger structural change in the labor market. This means 2023 holds significant implications for the workforce, as we expect the labor market to remain tight even with the Federal Reserve’s efforts to cool it and expanding layoffs in businesses worldwide.
- 2023 US capital expenditures will mirror 2022, with a focus on CX and EX. According to the Federal Reserve Board, US capital expenditures surged in 2021 and stabilized in 2022. We expect 2023 to more closely mirror 2022. Regardless, companies should continue to invest in higher-margin segments to protect long-term value, such as customer experiene (CX) and employee experience (EX), as suggested in Forrester’s 2023 planning guide for technology executives.
- 2023 tech budgets will shift to productive efficiency to deliver value. Forrester’s report TIER: Technology Is An Engine For Growth, So Budget Accordingly recommends a budget that considers optimizing future outcomes given current cost constraints. The companies that do this will have the greatest long-term success beyond the current downturn.
- Slowing productivity must be addressed in tech investment portfolios. While we saw productivity bounce back from the pandemic-driven slump, we expect productivity to idle toward the downside due to 2023’s forecasted slower growth.
Executives cannot afford to hesitate in 2023. Forrester’s TIER can help evaluate and identify the right decisions now to prepare for the eventual market rebound. If you want to learn more, feel free to schedule an inquiry or guidance session!
This research falls under Forrester’s Tech Insights and Econometric Research (TIER).