APAC tech spending to surge to USD $710 billion in 2024

Technology spending in the Asia Pacific (APAC) region is forecast to grow by 6.4%, reaching USD $710 billion in 2024, according to Forrester's Asia Pacific Tech Market Forecast, 2023 To 2027, released today. The report anticipates that tech spend will maintain a robust Compounded Annual Growth Rate (CAGR) between 6.4% and 7.4% annually from 2024 to 2027, ultimately reaching USD $876 billion by 2027.

Software spending is set to continue its rapid growth, followed by IT services, communications equipment, and computer equipment. The share of software purchases is projected to climb from 26.4% in 2024 to 30% of total tech spend by 2027. The growth in software spending is primarily driven by demand for Artificial Intelligence (AI) and AI-augmented enterprise software and services.

Forrester projects varied tech spend growth rates across different APAC countries in 2024. Australia is expected to see a 4% increase in tech spending, reaching nearly AUD $73.5 billion (approximately USD $49 billion). Australia's digital growth is heavily influenced by sustainability efforts and a robust local services economy.

China is forecasted to experience a 7.2% growth in tech spending, hitting CNY ¥1,847 billion (approximately USD $261.9 billion). Despite the challenges posed by slowing economic growth and trade restrictions, China's efforts around governing AI risks and introducing regulations will contribute significantly to this growth.

India, on the other hand, is set to enjoy a substantial 10.8% boost, reaching INR ₹4,492 billion (approximately USD $54.5 billion) in 2024. The country's tech economy benefits from a broad digitisation push across central and state governments.

Singapore's tech spending is anticipated to grow by 5.6%, reaching SGD $24.2 billion (approximately USD $18 billion) in 2024. The country continues to serve as a stable regional hub for technology talent and innovation.

In the rest of Southeast Asia, comprising six major economies—Indonesia, Malaysia, the Philippines, Thailand, Taiwan, and Vietnam—tech spending is projected to grow by 8.1%, hitting USD $74 billion in 2024. This growth is spurred by increased digital consumption among large Millennial and Gen Z populations, favourable policy environments, and investments from technology giants.

Leslie Joseph, principal analyst at Forrester, remarked, "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. 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."

The report underscores the significance of AI and cloud technologies in driving the next wave of growth activities. It calls attention to the emerging opportunities in these sectors and highlights the potential for substantial gains for firms that effectively leverage these technologies. Forrester's comprehensive analysis offers valuable guidance for IT leaders and industry stakeholders navigating the evolving technological landscape in the APAC region.