Forrester is upbeat about APAC tech spending through to 2027

Forrester's Asia Pacific Tech Market Forecast, 2023 To 2027 said technology spending in Asia Pacific region (APAC) will remain robust and grow by a CAGR of 6.4% to 7.4% per year from 2024 to 2027, reaching US$876 B in 2027.

Over the next few years, software spending will continue its rapid growth, followed by spend on IT services, communications equipment, and computer equipment. The share of software purchases will climb from 26.4% in 2024 to 30% of total tech spend in 2027, outpacing the other IT categories due to demand generated by AI and AI-augmented enterprise software and services.

In 2024, Forrester projects tech spend growth across countries in the Asia Pacific to be: 

- Four percent in Australia. Reaching nearly A$73.5 B, Australia's digital growth is heavily influenced by sustainability efforts and the local services economy, which has remained strong, the consultancy said.

- China will see 7.2% growth in tech spending, or ¥1,847 B in 2024. Despite slowing economic growth and trade restrictions, China's efforts around governing AI risks and introducing regulation will contribute to this growth, Forrester commented.

- The numbers in India will be higher, at 10.8% or ₹4,492 B in 2024, as India's domestic tech economy continues to enjoy strong growth due to an all-round digitisation push from the central and state governments, the consultancy said.

- In contrast, tech spending will grow 5.6% in Singapore to S$24.2 B in 2024. "The Silicon Valley of Asia" remains a stable regional hub for technology talent and innovation, Forrester said.

- The rest of Southeast Asia will see tech spending rise 8.1%. The category covers six major Southeast Asian economies (Indonesia, Malaysia, Philippines, Thailand, Taiwan region, and Vietnam) will hit US$74 B in 2024. Drivers for digital innovation, according to Forrester, include an uptick in digital consumption spurred by large Millennial and Gen Z populations; favourable policy environments, and investments from tech giants.

"While challenges such as regulatory environments, global economic conditions, and talent shortages in the region present hurdles, overall, the APAC market is well-positioned for tech growth," said Leslie Joseph, Principal Analyst at Forrester. 

"As the region continues to grow in importance in the tech world, new opportunities offered by the explosion of AI and the increased demand for cloud can be significant revenue and growth drivers for firms."