Covid stimulus and digital push buoy tech sector
ICT spending in New Zealand and Australia is expected to grow 2.1% despite the impact of ongoing lockdowns on both sides of the Tasman.
Analyst group IDC Research estimates both countries will spend US$84 billion this year on information and communication technologies and is forecasting the growth to continue at a rate of 2.5% per year out to 2025.
Almost every category of ICT spending is up, with the consumer category the only one likely to see a decline overall by the middle of the decade, down 1% and reflecting the recent trend towards a slower upgrade cycle of smartphones as consumers hold onto them for longer.
"Government stimulus initiatives measures and A/NZ businesses prior investment in digital transformation, played a key role in mitigating against the worst impact of the pandemic on business investment activity," IDC reported.
New business models necessitated by the pandemic, hybrid workplaces and online learning fueled the growth in hardware, software and ICT services revenue. The banking and government sectors account for 30% of the ICT spend and together are forecast to grow at a rate of 2.8% year over year.
Banks were trying to improve customer engagement and innovate in the face of disruption form fintech start-ups.
"Governments across the region have continued to increase tech budgets to enhance crisis response capability, improve operational efficiency, provide effective services to citizens as the pandemic hit and, going forward, to grow the digital economy ecosystem," IDC's analysts noted.
The focus in the coming year would be "the continual adoption of cloud-based infrastructure and modernisation of application platforms".
Another analyst group, Gartner, is more bullish in its growth projections for public sector ICT spending
Its latest research suggests New Zealand government IT spending will grow 7.9% in 2022 to $2.6 billion, higher than the global average of 6.5%. The bulk of the spending growth is expected to be in the area of IT services.
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