Digital transformation investments to top $6.8 trillion globally as businesses & governments prepare for the next normal


December 8, 2020 | By RetailME Bureau

65% of the world’s GDP is set to be digitalized by 2022 and direct digital transformation (DX) investments will total $6.8 trillion between 2020 and 2023. That’s according to the latest predictions from International Data Corporation (IDC), which expects end-user organizations to continue building on their existing strategies and investments as they strive to become digital-at-scale enterprises of the future.

“The COVID-19 pandemic and subsequent economic fallout has accelerated digital transformation across the Middle East, Turkey, and Africa (META), spurring unprecedented demand for contactless services, cloud solutions, and collaboration applications as governments and businesses sought to rationalize IT costs and provide access to an increasingly distributed workforce,” says Jyoti Lalchandani, IDC’s group vice president and managing director for the META region.

“As the focus on operational efficiency intensified, tech-enabled automation became a key priority, reshaping organizations’ processes and operations.

“Most economists predict a return to economic growth in 2021 as a vaccine becomes widely available. As this recovery begins, the focus of end-user organizations will revert to business growth and new investment. But the technology investments made during the pandemic will ensure that the ‘Next Normal’ that emerges will be very different from the pre-COVID economy. Indeed, by 2022, 70% of all organizations globally will have accelerated their use of digital technologies, transforming existing business processes to drive customer engagement, employee productivity, and business resiliency.”

Given this significant expansion in the digital economy, and with digitally transformed enterprises accounting for a much larger share of the market, IDC is urging technology providers to reset and refresh their strategies as their customers recover and begin preparations for the ‘Next Normal’.

“The demand for IT has changed dramatically as a result of COVID-19, with almost every segment of the market being impacted by massive changes in customer behavior,” says Del Prete.

“We predict that direct investment in digital transformation will grow at a healthy compound annual growth rate (CAGR) of 15.5% globally between 2020 and 2023, while non-DX ICT investment will contract at a CAGR of -1.4% over the same period. And as more and more companies become fully transformed from the less than 20% of enterprises today, relative GDP from digitalized products and services will expand exponentially.”

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