Publication date: 15 Nov 2022
Digital Spending in Asia/Pacific* to Reach US$1.05 Trillion by 2026, IDC Reports
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Digital Products, Services, and Experience Are Key in Driving Digital Transformation Investments
SINGAPORE November 16, 2022 – According to the recent release of the Worldwide Digital Transformation Spending Guide, the Digital Transformation (DX) Spending in Asia/Pacific* is forecast to reach US$543 Billion in 2022, a year-on-year growth of about 18% from 2021.
“In the new digital business era, we expect digital technologies to represent a growing percentage of organizations’ IT budget.” Said Sandra Ng, Group Vice President and General Manager for IDC Asia/Pacific including Japan (APJ) Research. “Even with the looming recession and other potential storms of disruption, the focus on digital will only drive organizations to modify business and operating approaches, leveraging technologies and consumption models to drive new competitive advantage,” she added.
The pandemic in the last two years accelerated the need for digital transformation (DX) to improve an organization's resilience against market disruption. As we move ahead into the dark clouds of economic turbulence, IDC's research indicates enterprises embracing digital technology as the way forward.
The transition from DX 1.0 to DX 2.0 asserts that traditional business models need to diversify and invest in growing their share in digital business models to survive in the long run. A connected ecosystem is key to attract, attain and convert customers as we evolve into providing a digital solution using existing business models. In a recent survey conducted by IDC (Future Enterprise Resilency & Spending 22 Survey), business agility was the main improvement recognized by respondents in organizations that have increased investments in digital transformation in 2021. They will continue to invest as they look at improvements in employment productivity and sustainability as critical areas that notice better results.
Nearly 35% of DX spending throughout the forecast period will come from the Discrete and Process Manufacturing where robotics manufacturing, autonomic operation and root cause use case lead the spending. Asia/Pacific* is driven by increasing innovation in these industries as demand continues to grow as it caters to a global market. The next largest industry for DX Spending is the Government Sector which accounts for a total of 10% of the overall share. Critical infrastructure management, remote health monitoring and advanced public transit use cases lead the spending. The automation increase in government sector has accelerated due to the investment for smooth operations across the region.
Robotics manufacturing continues to be the largest use case to dominate the DX spending. Repetitive precision tasks which involve high accuracy continue to drive the growth with a CAGR of 21% for the forecasted period (2021-2026). Smart Manufacturing has dawned a new importance in the region as many manufacturing companies are increasing spending to improve their operation and reduce operational costs. In the same survey, more than 38% of respondents agree that Robotic Process Automation is the most important for productivity and process automation business strategy.
"Amidst strong backlash from global supply chain constraints, increasing impact from inflation and political uncertainty, investments in digital transformation are expected to remain stable.", said Mario Allen Clement, Associate Research Manager, IT Spending Guides, IDC Asia/Pacific. "Automation, intelligence, operational transparency, and customer experience hold key for investments to grow in the Digital Transformation across the region," he added.
The Asia/Pacific* region accounts for almost 30% of total DX Spending worldwide followed by United States. Asia/Pacific* continues to be seen as having a high growth potential as advancement in technology adoption continues to improve. Organizations continue to allocate their DX Investments towards a number of strategic priorities which will be accomplished as they grow in their digital footprints.
The IDC Worldwide Digital Transformation Spending Guide (V2 2022) examines the digital transformation opportunity from a use case — technology, industry, and geography — perspective. The Spending Guide quantifies enterprise spending for more than 300 DX use cases and 12 technology markets across 19 industries and 14 geographic regions. The Guide provides spending data for 51 DX strategic priorities and 99 programs as well as technology spending by deployment type (cloud, non-cloud/other).
*Asia/Pacific excluding Japan
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About IDC Spending Guides
IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships. For more information about IDC's Spending Guides, please contact Vinay Gupta at vgupta@idc.com. Click here to learn about IDC's full suite of data products and how you can leverage them to grow your business.
About IDC
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