Innovation
Emerging economies will be bigger IT spenders than US
New report says rising investments, large growing SMB base and a young workforce will boost the IT consumption of five emerging markets--India, Indonesia, Malaysia, Philippines and South Africa.
An impending economic and social windfall for emerging markets will power strong technology consumption that threatens to outpace the United States.
According to the inaugural "Growing in the E+ Markets" study released Thursday by market advisory firm Zinnov, the five emerging economies (E+) India, Indonesia, Malaysia, Philippines and South Africa will experience strong demand for technology in the coming years.
This demand is being driven by domestic and foreign investment, small and midsize business (SMB) growth, and a demographic dividend in the form of a young workforce, it stated.
Elaborating on the findings, Zinnov director Praveen Bhadada said there are over 90,000 large enterprises in these E+ countries compared to 41,000 in the U.S. These five markets are also home to 75 million SMBs which makes them the largest SMB market globally, and the per capita GDP in these economies is growing 250 percent faster than the U.S.
"These are great indicators which is why E+ markets are becoming a force in reshaping global industry across sectors," Bhadada said.
As a result, technology vendors are adapting their models to the business opportunity including volume licensing deals with trade bodies, innovative financing models for SMBs, and local talent developments, the report stated.
IT companies will also focus on mobile in these countries, where 50 percent of Internet traffic is channeled via mobile phones. In the U.S., by contrast, 87 percent of Web traffic is hosted on PCs, desktops and fixed line connections. "Vendors are increasingly moving to mobile-enabled versions of their solutions to win enterprise and end-customers."