Spending in AI-augmented software and services will outpace other IT categories

SINGAPORE, June 11, 2024Forrester’s (Nasdaq: FORR) Asia Pacific Tech Market Forecast, 2023 To 2027 reveals that technology spending in Asia Pacific (APAC) ) will remain robust and grow by a Compounded Annual Growth Rate (CAGR) of 6.4% to 7.4% per year from 2024 to 2027, reaching US $876 billion in 2027.

Over the next few years, software spending will continue its rapid growth, followed by spend on IT services, communications equipment, and computer equipment. The share of software purchases will climb from 26.4% in 2024 to 30% of total tech spend in 2027, outpacing the other IT categories due to demand generated by AI and AI-augmented enterprise software and services.

In 2024, Forrester projects tech spend growth across countries in the Asia Pacific to be:

  • 4% in Australia. Reaching nearly A$73.5 billion (approximately US$49 billion), Australia’s digital growth is heavily influenced by sustainability efforts and the local services economy, which has remained strong.
  • 2% in China. Tech spending in China will hit ¥1,847 billion (approximately US$261.9 billion) in 2024. Despite slowing economic growth and trade restrictions, China’s efforts around governing AI risks and introducing regulation will contribute to this growth.
  • 8% in India. Estimated to reach ₹4,492 billion (approximately US$54.5 billion) in 2024, India’s domestic tech economy continues to enjoy strong growth due to an all-round digitization push from the central and state governments.
  • 6% in Singapore. In 2024, tech spending will grow to S$24.2 billion (approximately US$18 billion). “The Silicon Valley of Asia” remains a stable regional hub for technology talent and innovation.
  • 1% in the rest of Southeast Asia. Tech spending in six major Southeast Asian economies (Indonesia, Malaysia, Philippines, Thailand, Taiwan, and Vietnam) will hit US$74 billion in 2024. Uptick in digital consumption spurred by large Millennial and Gen Z populations, favorable policy environments, and investments from tech giants will accelerate digital innovation.

“While challenges such as regulatory environments, global economic conditions, and talent shortages in the region present hurdles, overall, the APAC market is well-positioned for tech growth,” said Leslie Joseph, principal analyst at Forrester. “As the region continues to grow in importance in the tech world, new opportunities offered by the explosion of AI and the increased demand for cloud can be significant revenue and growth drivers for firms.”

Resources:

  • Read Forrester’s Asia Pacific Tech Market Forecast, 2023 To 2027 report (client access required).
  • Learn more about Forrester’s Asia Pacific Tech Market Forecast, 2023 To 2027, in this blog post.
  • Discover how Forrester supports IT leaders and how to get the most out of emerging technologies being deployed.

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