IDC forecasts global IT spending to reach $2.7 trillion in 2020
3.3% annual growth through 2020... Financial services, manufacturing, and healthcare sectors drive the market

According to the latest research report by IDC (www.idc.com), global IT spending is projected to grow at an annual average rate of 3.3% over the five years from 2015 to 2020, increasing from $2.4 trillion in 2016 to $2.7 trillion in 2020.

According to this report (Worldwide Semiannual IT Spending Guide: Vertical and Company Size) , investment in the Third Platform (*3rd Platform: an IT platform based on cloud, mobility, big data, and social) is expected to continue in major industries such as financial services and manufacturing as part of efforts toward digital transformation. In the case of the telecommunications industry, investment is expected to gradually improve compared to the sluggishness of the past few years, but the scale of improvement is expected to be relatively small. During the forecast period, IT spending in the major industries of banking, manufacturing, and telecommunications is projected to account for one-third of total IT revenue.

In the consumer sector, the expansion of smartphone demand accounted for 25% of total IT spending in 2015. However, as consumer demand for PCs, tablets, and smartphones weakens, it is expected to have a negative impact on the overall IT market. In the future, the enterprise sector is expected to lead the tablet market rather than consumer sales.

Visitors are examining smartphones at the Electronics Show. (Courtesy of Electronics Show)

Stephen Minton, Vice President of IDC’s Consumer Insights and Analytics Group, explained, “While the consumer and public sectors have driven overall IT spending so far in 2016, strong momentum is building in other major industries such as financial services and manufacturing,” noting that new project-based investments in data analytics and collaboration applications are continuing. Minton further explained, “The adoption of third-platform technologies by mid-sized companies is increasing rapidly, and assuming the economy stabilizes in 2017, small businesses are also expected to start adopting third-platform technologies.”

Despite concerns that growth has peaked, the healthcare sector is projected to be the fastest-growing, recording an average annual growth rate of 5.7% over the next five years. The banking, media, and professional services sectors are expected to surpass a combined total of $475 billion by 2020, recording an average annual growth rate of 4.9%. Furthermore, while public sector spending is expected to remain behind the private sector, gradual improvement is anticipated. As oil prices rebound from recent lows, IT spending in the natural resources sector is projected to show signs of recovery.

In terms of company size, large enterprises (with 1,000 or more employees) are expected to account for more than 45% of global IT spending, while small businesses (with fewer than 10 employees) are projected to account for approximately one-fourth of total IT spending over the next five years. Small and medium-sized enterprises (100-499 employees) and middle-sized enterprises (500-999 employees) are expected to show the fastest growth and record an average annual growth rate of 4.4%.

"While the small business market is facing challenges due to the economic downturn in some regions, there is pent-up demand for IT assets, so purchases are expected to materialize once the economy recovers," Vice President Minton added. "The highest growth is projected for small and medium-sized enterprises, which is attributed to their greater agility compared to large corporations and their lower exposure to economic volatility compared to small businesses."