Global spending on digital transformation (DX) will reach $3.9 trillion by 2027, according to new figures from IDC beancounters.
This growth trajectory is underpinned by a five-year compound annual growth rate (CAGR) of 16.1 per cent, IDC thunk.
While the US is poised to command a significant 35.8 per cent share of global digital transformation spending in 2023, the Asia/Pacific region (including Japan and China) closely follows with a robust 33.5 per cent share.
Meanwhile, the EMEA region is set to contribute 26.8 per cent of DX spending worldwide this year.
IDC senior research manager Angela Vacca said: “In Europe, digital transformation spending is growing fast, and we estimate a CAGR of 16 per cent across the 2023-2027 timeline.
“In this context, investment opportunities will vary depending on countries, industries, and use cases. The fastest-growing geography will be the Nordics, where financial services and telecom/media companies will be the most dynamic, growing their DX spend by more than 20 per cent across the forecast period.
France will see a 32 per cent increase in machine learning-driven predictive analytics in the healthcare provider industry in 2027. This shows that the European market is dynamic and diverse and that opportunities need to be pinpointed, she said.
IDC’s associate research manager Mario Allen Clement said that digital transformation has taken centre stage across enterprises in the Asia/Pacific as the focus rapidly shifts from traditional business models.
“Customer experience, innovation, and efficiency are leading to business models that are boosting both productivity and profitability for businesses. “With a young and growing population that is more tech-savvy than older generations, rapid infrastructure developments towards urbanisation are driving the demand for digital offerings both in products and services,” Clement said.
“Integration of multiple third platform technologies such as cloud computing and artificial intelligence coupled with a need to cater to real-time customer experience will continue to push investments further across industries with specific use cases as priorities in the Asia/Pacific market.”
Noteworthy is the remarkable growth exhibited by select digital transformation use cases identified by IDC.
These include ‘mining operations assistance,’ ‘robotic process automation-based claims Processing,’ and ‘digital twins,’ boasting five-year CAGRs of 32.6 per cent, 30.6 per cent, and 28.5 per cent, respectively.
In industries, discrete manufacturing takes the lead in digital transformation spending, constituting around 18 per cent of global investments.
Critical use cases in this domain encompass robotic manufacturing, autonomic operations, inventory intelligence, and intelligent warehousing.
Other prominent industries with significant DX investments include professional services, where the emphasis lies on operational efficiency use cases and process manufacturing.
The securities and investment services industry is poised to witness the most rapid growth in DX spending, boasting a five-year CAGR of 21.1 per cent, followed closely by banking and insurance, with CAGRs of 20 per cent and 19.2 per cent, respectively.
