E-govt plans drive Asia's public sector IT spending

E-government and other ICT initiatives in the region will drive public sector spending to over US$31 billion by the end of the decade, according to research company IDC.

Government spending on ICT in the Asia-Pacific region, excluding Japan, is expected to grow at a five-year compound annual growth rate (CAGR) of 8.7 percent to reach US$31.7 billion by 2010, from US$22.7 billion this year.

According to Victor Lim, IDC's Asia-Pacific vice president for business development (verticals), emerging economies such as China and India will be "huge drivers of IT spending" over the next few years, as these countries build up their ICT infrastructure.

Public sector spending in China will grow significantly, Lim noted in a statement. With a CAGR of 12.3 percent, the Chinese public sector market is expected to be worth US$11.7 billion in 2010, up from US$6.5 billion in 2006. By 2010, the country will account for 36.9 percent of the region's public sector IT spend, up from the current 28.6 percent.

India and Vietnam are expected to have the fastest growing government IT spend, with a CAGR of over 16 percent each, during the forecast period.

Lim noted that mature economies, however, will not grow as much but will move up the ladder in terms of ICT sophistication.

"An example of such sophistication is the increased focus on government-to-public interaction and government-to-industry collaborative efforts, driving IT initiatives and service rollout especially in the education and healthcare sectors," he added.

According to the statement Hong Kong, Singapore and Taiwan are expected to grow at more modest rates of 3 percent to 5 percent until 2010.