IDC: Asia-Pacific digital transformation spend to tip $375.6b this year

The research firm has highlighted China as the top-spending country.
Written by Asha Barbaschow, Contributor

The International Data Corporation (IDC) is expecting digital transformation-related activities to conjure up $375.8 billion in spending this year from organisations in the Asia-Pacific region.

According to the IDC Worldwide Semiannual Digital Transformation Spending Guide, the region is estimated to spread the spend over the technologies and services that "enable the digital transformation of business practices, products, and organisations".

China will be the largest geographic market for digital transformation spending in the Asia-Pacific, with IDC saying China will deliver more than 60% of the region's total spend this year.

SEE ALSO: China to lead APAC tech spend, 5G race ahead of global markets

"The adoption of emerging technologies supporting [digital transformation] strategies in Asia-Pacific is shaping up as its helping to re-imagine their businesses, re-evaluate their value chain, reconnect with their customers, and rebuild their organisation into a digital-native enterprise," senior research manager for IDC's Customer Insights & Analysis group Ashutosh Bisht said.

"Government and enterprises in the region are understanding the value of what these new technologies bring to operational activities. It also harnesses the potential of a lot of initiatives being launched to make the workforce well versed. Upskilling and future-proofing the workforce are on top of employers and the government's agenda."

IDC said digital transformation spending is expected to steadily expand throughout the 2017-2022 forecast period, achieving a five-year compound annual growth rate of 17.4%.

The discrete manufacturing industry is expected to spend $83.9 billion on digital transformation, while the process manufacturing industry should spend $46.8 billion, IDC said.

For both industries, IDC has isolated that the top digital transformation spend will be on smart manufacturing, followed by digital supply chain optimisation.

"Smart manufacturing is supported by significant investments in autonomic operations, manufacturing operations, and quality," IDC's spending guide says.

Government will be the next largest industry in 2019, followed closely by transportation and utilities.

"Each of these industries will be pursuing a different mix of strategic priorities from convenient access to healthcare for the government industry, digital supply chain optimisation in the transportation industry, and digital grid in utilities industry," the guide continued.

SEE ALSO: How to take digital transformation from buzzword to reality in your organization (TechRepublic)

The use cases IDC said that will see the largest investment across all industries in 2019 will be autonomic operations, with $25.5 billion; robotic manufacturing, with $25.2 billion; root cause with $16.5 billion; and freight management with $13.8 billion.

Hardware and services investments will account for more than 83.6% of all digital transformation spending in 2019 and will be spread across several categories, including enterprise hardware, personal devices, and IaaS infrastructure.

According to IDC, services spending will be led by connectivity services, at $44.2 billion, and IT Services at $17.6 billion.

The fastest growing technology categories, IDC said, will be system infrastructure software and IaaS.

Global digital transformation spending will approach the $2 trillion mark in 2022, IDC has previously said.


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