India to have fastest tech spending in Asia Pacific, to grow by 12% in 2017

According to Forrester’s Asia Pacific 2017-2018 tech market outlook forecast, the region’s tech spending will see moderate growth this year. APAC was once the fastest-growing tech market in the world, but no more — at least until 2018. Forrester now forecasts that slowing economies in most Asia Pacific markets will mean a lackluster 3% growth for technology budgets in 2017, followed by faster growth of 5.7% in 2018.

Other key findings, as outlined in the new research, include:

• Japan is still the largest tech market, but others are growing faster. Japan is expected to spend US$248 billion on tech goods and services in 2017, which is the largest among all Asia Pacific countries. China is not far behind and will grow much faster, while India is a distant third but will have the fastest growth.
• India’s tech spending will maintain the highest growth rate in Asia Pacific. In the next two years, technology spending will continue to grow faster in India than elsewhere in Asia Pacific. India’s total tech purchases will increase by 8% in 2017 and by 10% in 2018 in rupees (5% and 8%, respectively, in US dollars). A robust economy, combined with government-led initiatives like Digital India and Make in India, will spur increased investment in the software, services, and outsourcing segments. Although telecom will remain the largest segment in India, Forrester expects only modest growth in 2017 and 2018.
• Software and services will lead Asia Pacific tech market growth. While telecom services will remain the largest area of spending, it will be flat or grow by 2% to 4% in constant currency terms. Computer equipment, the second-largest tech category, will grow by 5% and 6% in US dollars and 3% and 6% in constant currencies. While software and tech consulting services have become two of the largest and fastest-growing tech budget categories in the US and Europe, the APAC region has not reached this point yet, as many countries are still assembling the hardware infrastructure that underpins modern technology. But it is heading in that direction, with software becoming the third-largest tech market category in the region.
• BT starts to become a driver of software and services. Few Asia Pacific markets have the maturity to embrace the business technology (BT) agenda to the same extent as the US. The BT agenda includes technologies that help firms win, serve, and retain customers. BT accounts for 14% of Asia Pacific tech spending, versus 32% in the US. BT spending will grow much faster than IT spending through 2018 as firms work to meet the changing expectations of empowered customers.