Asia Pacific Tech Spending Forecasts: Lackluster in 2017, Acceleration in 2018

Frederic Giron
Vice President, Research Director
January 25, 2017

Forrester just released our forecast for business and government purchases of technology goods and services in Asia Pacific (AP) markets. CIOs in the AP region will continue to face a business environment of high uncertainty and modest economic growth in 2017, with 3% growth in tech spending. Better economies in 2018 will push growth closer to 6%. Customers in the region will grow and exert more power, creating challenges that require CIOs to do more — and do it faster. Following are some of the high-level trends by major AP country:

  • Japans slow-growth tech market is Asia’s biggest — but not for long. Japan is expected to spend US$248 billion and on tech goods and services in 2017, which is the largest among all Asia Pacific countries. Measured in yen, growth will be low: 1% in 2017 and 0.4% in 2018.
  • Chinas tech market will continue to shift from hardware to software and services. Forrester projects that China’s tech market spending will grow at 7% in yuan renminbi in 2017 (3% in US dollars). Hardware markets will continue to mature; state-owned enterprises will continue to replace foreign products with local alternatives; and cloud adoption will reduce the need for capital expenditures.
  • Indias tech spending will maintain the highest growth rate in Asia Pacific. India’s total tech purchases will increase by 8% in 2017 and by 10% in 2018 in rupees (5% and 8%, respectively, in US dollars). A robust economy, combined with government-led initiatives like Digital India and Make in India, will spur increased investment in the software, services, and outsourcing segments.
  • South Koreas tech market will grow moderately. South Korea’s tech spending is expected to grow by 2% in both 2017 and 2018 in Korean won. Under the Creative Economy strategic plan, Korea aims to become a regional tech startup hub. The government is investing US$3 billion in the program, which will boost spending on emerging technologies and related tech services.
  • Australias tech focus has shifted to digital operational excellence. In 2017, around half of the tech investment in Australia will go to software, tech outsourcing, and consulting services. These will also be the top three categories in terms of growth, at rates of 6%, 6%, and 5%, respectively. Australian businesses have made deep investments in digitizing CX and will begin to master digital operational excellence in 2017.
  • ASEAN tech spending will grow by 5% in 2017. In the broader region, spending on software will rise by 9% and on tech outsourcing by 12% in 2017 as leading countries in the region push for new technology solutions in the public and private sectors. To realize its Smart Nation vision, Singapore, the biggest tech market in the region, will aggressively increase its investments in network coverage and data and analytics for the city-state.

We share more details on Forrester’s Asia Pacific 2017 predictions during a complimentary on-demand webinar that you can listen to here.

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