Small firms in emerging markets up IT spend

Fewer small businesses in markets such as China and India are feeling pinch from downturn, with 17 percent indicating budget increases, new research shows.
Written by Vivian Yeo, Contributor

Small businesses in emerging markets are beginning to bounce back from the economic downturn and adjusting their IT budgets upward, new research has revealed.

Just over half (55 percent) of emerging market firms perceive a negative impact from the economy in the second quarter, down from 72 percent in the first quarter, market research consultancy Techaisle said in a statement Monday. San Jose, Calif.-based Techaisle focuses on emerging markets, emerging technologies and interactive entertainment.

The study was conducted in five markets categorized as emerging--Brazil, China, India, Russia and Turkey--and four classified as mature--Germany, Malaysia, the United Kingdom and United States.

In mature markets however, the trend was reversed. Around 90 percent of small businesses indicated in the second quarter they were negatively impacted by the economy, compared to 75 percent in the previous quarter. The sentiment was felt most strongly in Germany and the United Kingdom, reported Techaisle.

Similarly, while fewer mature market businesses indicated IT budget increases in the second quarter compared to the first, their emerging market counterparts are picking up pace in IT investments.

About 17 percent of smaller companies in emerging markets indicated budget increases in the second quarter, up from just over 10 percent a quarter earlier. Small businesses in China and India showed the most voracious appetites for IT, with 28 percent indicating budget growth.

Exploring netbooks a key priority
Exploring the use of netbooks is one of the key areas of IT investment for small businesses with increased budgets globally, according to Techaisle's findings. "Investigating netbooks" came up consistently as a top five investment priority for those with bigger budgets.

Smaller companies in mature markets said they planned to also invest in new servers, new desktops, upgrading existing servers and upgrading business productivity software.

Those in emerging markets were focused on new servers, new desktops, new laptops and upgrading existing servers.

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