IDC: Worldwide Spending on Digital Transformation is Forecast to Reach Almost $4T by 2027
NEEDHAM, Mass., May 30, 2024 -- Worldwide spending on Digital Transformation (DX) is forecast to reach almost $4 trillion in 2027, according to the latest update to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide. With artificial intelligence (AI) and Generative AI pushing investments, the DX market is forecast to grow with a compound annual growth rate (CAGR) of 16.2% over the 2022-2027 period.
As organizations continue to prioritize digitalization, DX investments are projected to grow substantially, potentially reaching or even surpassing two thirds of all Information and Communication Technology (ICT) spending by 2027.
"Digital transformation is no longer a discretionary investment: companies that want to be competitive and win in the digital economy are leading the way," said Angela Vacca, senior research manager with IDC's Data & Analytics Group. "Today, DX spending represents a bigger market compared to the non-DX portion of ICT spend. And digital business investments are ramping up even faster with the advent of Generative AI which is having an impact across industries; still, opportunities are varied across different market spaces."
The financial services industry is growing at a very fast pace with a five-year CAGR of 20.5% and three use cases that are growing well above the average rate. Robotic Process Automation-Based Claims Processing is the fastest growing use case with a CAGR of 35.1%, followed by Real-time Financial Advice (29.5%) and Digital Banking Experience (29.3%).
These use cases have something in common: all three are highly data intensive and rely heavily on AI, generative AI, and data and analytics technologies. The huge advances that financial institutions are employing are transforming their organizations into more effective, more customer-centric organizations that can respond more rapidly to changing customer demand and to a fast-moving macro-economic environment.
The industry that will see the largest DX investments over the 2022-2027 forecast period is Discrete Manufacturing with worldwide spending of almost half a trillion dollars in 2024. This spending will grow to more than $700 billion dollars in 2027 with Omni-Experience Engagement and Sustainability being the strategic priorities that are growing at the fastest pace among discrete manufacturing companies.
The fastest growing regions are Latin America and China, which will have five-year CAGRs of 17.9% and 17.4%, respectively.
"China is entering an era where AI is omnipresent in the digital transformation of business. Supported by various digital-friendly policies, Chinese companies are concentrating on new forms of productivity, leveraging cutting-edge technologies to drive industrial advancement, intelligence, and sustainability," said Jing Qian, market analyst with IDC's Data & Analytics Group China.
"The rise of Gen AI presents both challenges and opportunities for organizations. As digital investments become dominant, it is crucial for organizations to partner with vendors who can provide guidance on resource allocation and effective digital transformation strategies. To stay competitive and innovative, it is essential to harness its potential benefits and avoid missing out on opportunities due to uncertainty," said Mariya Yahnyuk, research analyst with IDC's Data & Analytics Group.
The IDC Worldwide Digital Transformation Spending Guide (V1 2024) examines the digital transformation opportunity from a use case — technology, industry, and geography — perspective. The Spending Guide quantifies enterprise spending for 376 DX use cases and 12 technology markets across 19 industries and 14 geographic regions. The Guide also provides spending by technology group (hardware, software, services) and deployment type (cloud, non-cloud/other).
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 Worldwide Digital Transformation Spending Guide, please contact Angela Vacca at avacca@idc.com.
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About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company.
Source: IDC
