The information & communication technology is a dynamic industry that is experiencing exponential growth due to the emergence of various technologies such as AI, AR-VR, IoT, Blockchain, cloud computing, and others. The emerging technology’s contribution in the growth of IT sector was high in 2018, followed by software, hardware, tech services and telecom services. The global spending on IoT is expected to reach US$ 1.29 Trillion by 2020, which is one of the important factors that will propel the growth of the ICT industry. Increasing use cases of IoT such as in smart metering, asset tracking, connected vehicles, and others are increasing the overall spending on IoT.
At the same time, development in mobile & wireless communication technology is creating opportunity for the industry. Wireless communication includes technologies such as Wi-Fi, 5G cellular, Vehicle-to-everything, LoRAWAN, and others. The increasing number of smart city projects across the globe is one of the factors that is driving the demand for these enhanced wireless communication technologies.
Developing and developed countries such as China, Germany, India, USA, and others have allocated budget for smart cities projects, which is driving the demand for enhanced technologies in these countries. For instance, the Indian government has announced a budget of US$ 927.097 Mn for smart city project for the year 2020-2021. Thus, increasing investment in smart city projects across the globe is creating opportunities for the ICT industry. Additionally, major players in the market such as Google, Microsoft, Facebook, Intel, Cisco, Apple, and others are strengthening the ICT industry by investing more in R&D for innovation.
ICT spending was US$ 4,571.6 Bn and US$ 4,813.1 Bn in 2017 and 2018 respectively, a growth by 5% as compared to the previous year. This rising spending in ICT industry has been accentuating the industry growth in recent days.
IT-based services are mainly in demand from sectors such as education, fintech, telecom and broadcast, insurance, manufacturing, and others. Enterprise software drived the overall IT spending in 2019 at 8.3%, followed by IT services at 4.7%., On the other hand, data centers and communication services witnessed a sluggish growth in 2019. Wider accessibility to cloud-based services and ongoing modernization are contributing to the growth of IT services. Various industries are using IT technologies for improving their productivity, customers services, product quality, and others.
North America dominated the ICT industry in 2019 and is expected to show similar trends in coming years. Huge investments in 5G technology and infrastructure, along with R&D innovations, are some of the factors to drive the growth of the ICT industry in the region. According to a market study, North America is expected to have 345 million 5G subscribers by 2025 due an increase in customer spending on mobile connectivity. Additionally, increasing adoption of multicloud services is also driving the growth of the ICT industry in the region.
The Asia Pacific region is growing at the fastest pace due to a rapid increase in spending on tech services and goods. China and Japan dominated the Asia Pacific market in 2019 due to increasing demand for automated and enhanced services and goods. China witnessed the highest spending of US$ 256 Bn on tech services and goods in 2019, which was followed by Japan with US$ 198 Bn and India with US$ 70 Bn spending.