APAC tech spend remains robust despite fragile economy
Technology spend in Asia Pacific (APAC) will grow 5.8% to reach US$732 billion in 2023, according to Forrester's Asia Pacific Tech Market Forecast, 2022 To 2027.
The research covers leading markets in the Asia Pacific region such as Australia, China, India and selected Southeast Asian countries on their forecasted technology spend in 2023 and beyond.
The forecast found 74% of growth will come from software and services as cloud adoption in the region increases. Additionally, software spending will continue to rise at a compound annual growth rate of 10.3% through 2027.
In spite of challenges including fragile post-pandemic supply chains; a shortage of science, technology, and engineering workers; and questions around how quickly China can restart its economy, Asia Pacific tech spend will continue to grow by 6.8% to 7.3% per year from 2024 to 2027.
In 2023, Forrester projects regional tech spend growth across Asia Pacific to be:
6.3% in Australia. In 2023, tech spending in Australia will rise to nearly A$70 billion. Renewed sustainability efforts and the local services economy will strongly influence Australia's 2023 tech spend and digital growth.
7.4% in China. Forrester estimates that tech spending in China will grow 7.4% to hit 1.7 trillion in 2023. Technology innovation will play a key role in industrial modernisation, and generative AI will catalyse tech investments in all major industries.
10.1% in India. Tech spending growth in India will be the highest in the region and is expected to reach 3.9 trillion in 2023. Strong government support for ongoing digitalisation efforts will continue to impact investments in building a national digital infrastructure.
4.6% in Singapore. In 2023, tech spending in Singapore will hit S$22.17 billion. The Silicon Valley of Asia continues to be a stable regional hub for technology talent and innovation, with the government allocating high-level budgets toward innovation initiatives.
7.9% in the rest of Southeast Asia. In 2023, tech spending in the five major Southeast Asian economies (Indonesia, the Philippines, Thailand, Vietnam, and Malaysia) will approach US$47 billion, with Indonesia, Vietnam, and the Philippines having the highest growth rates of 9.3%, 9.3%, and 8.1%, respectively.
"Asia Pacific currently accounts for 75% of global GDP growth," says Leslie Joseph, principal analyst at Forrester.
"While we anticipate APAC tech spend growth to increase even further, its crucial that countries and businesses invest in the right technologies to continue to benefit from growing digital and cloud infrastructure," Joseph says.