“Generative AI will change everything, but like IoT, blockchain and other big trends we’ve already seen, it’s unlikely to have a significant impact on IT spending.”

John-David Lovelock, a senior VP analyst at Gartner, said there is widespread excitement about generative AI in the market, but he also predicted that IT spending trends will be somewhat limited due to accumulated fatigue from constant change.

Global market research firm Gartner announced on the 22nd that global IT spending will reach a total of 5 trillion dollars in 2024, a 6.8% increase from 2023, and of this, Korea's IT spending is expected to reach 109.7 trillion won, a 4.8% increase from last year.

Domestic IT spending is expected to grow across all sectors, with the software sector in particular expected to continue its high growth rate of 11.5%. The devices and IT services sectors are also expected to show growth rates of 6.6% and 6.5%, respectively.
In particular, Gartner predicted that although generative AI received great expectations last year, there would be no significant change in short-term IT spending growth.

“2024 will be the year when organizations make real investments in planning how they will use generative AI,” said John, but “IT spending will remain driven by more traditional forces like profitability and labor, while the ongoing impact of change fatigue will stall.”

The global IT services sector is expected to continue its growth in 2024, becoming the largest share of IT spending for the first time ever.

Global IT services spending this year is expected to reach a total of $1.5 trillion, up 8.7% from last year, largely driven by companies investing in organizational efficiency and optimization projects. Such investments are one of the factors being taken into consideration in the current period of great economic uncertainty.

“Consumer adoption of devices and communication services has been stagnant for more than a decade,” Lovelock said. “Consumer spending levels are largely determined by price changes and replacement cycles, so growth is bound to be slow, and it is inevitable that they will be overtaken by software and services.”

He continued, “Just as IT has moved from the back office to the front office to generate revenue, companies are continuing to find more diverse ways to use technology,” and “There will be no stagnation in corporate IT spending until companies have a stable understanding of how and where they will use technology.”

The overall IT spending growth rate in 2023 is expected to be 3.3%, a mere 0.3% increase from 2022. This was found to be mainly due to change fatigue among CIOs, but momentum is expected to recover in 2024, with overall IT spending growing by 6.8%.

On the other hand, it is predicted that the overall IT spending environment will remain somewhat constrained in 2024 due to change fatigue.

In terms of change fatigue, we expect that CIOs’ resistance to change could manifest itself in the form of hesitation to sign new contracts, pursue long-term initiatives, or collaborate with new technology partners. In order to start new initiatives, CIOs need a higher level of risk mitigation measures or assurance of results.