Gartner: China's IT spending is expected to grow 7.7% in 2021

According to the latest forecast by Gartner, the world's leading information technology research and consulting company, global IT spending is expected to reach US$3.9 trillion in 2021, an increase of 6.2% over 2020. As CIOs prioritized spending on mission-critical technologies and services at the beginning of the epidemic, global IT spending fell by 3.2% in 2020. China's IT spending is expected to reach 3.09 trillion in 2021, an increase of 7.7% over 2020.

In 2020, digital transformation reached an unprecedented speed to meet the needs of remote work, education and new social norms, which made isolation and social distancing measures a double-edged sword - as the new year began, this double-edged sword has offset the negative impact of the epidemic on IT spending.

“CIOs will need to strike a balance between cost savings and IT expansion in 2021,” said John-David Lovelock, distinguished research vice president at Gartner. “As economic certainty returns, companies are investing in IT based on their expectations for growth, rather than their current revenue levels. Projects with the fastest time to value are dominating digital business and will receive more funding and board-level attention in 2021.”

All IT spending segments are expected to return to growth in 2021 (see Table 1). Enterprise software is expected to see the strongest rebound (8.8%) as remote work environments expand and improve. Equipment will be the second-highest growing segment in 2021 (8%), with IT spending expected to reach $705.4 billion.

Table 1. Global IT spending forecast (Unit: million US dollars)

Source: Gartner (January 2021)

Mr. Lovelock said: “Multiple factors will combine to drive the device market higher. As countries continue to conduct remote education this year, students will have increasing demand for tablets and laptops. Similarly, enterprises are industrializing remote work for their employees as employees are confined to their homes due to epidemic prevention measures and stable budgets allow CIOs to reinvest in assets that were stretched thin in 2020.

From now until 2024, companies must accelerate their digital business transformation plans by at least five years to survive in the post-epidemic era, which requires companies to permanently increase the adoption of remote work and digital touchpoints. Gartner predicts that global IT spending related to remote work will reach US$332.9 billion in 2021, an increase of 4.9% from 2020.

“Digital business is the dominant technology trend in late 2020 and early 2021. Areas such as cloud computing, core business applications, security and customer experience are at the forefront of this trend. Enterprises will continue to adopt optimization initiatives such as hyperautomation, and the focus of these projects will continue to be on returning cash and reducing work in the process (not just reducing tasks).”

Although COVID-19 vaccines are available, governments will still need to take health interventions against the virus throughout 2021. Non-COVID-19 geopolitical factors, such as Brexit and tensions between China and the United States, will also limit recovery in some regions.

Overall, the world will not be able to return to 2019 spending levels before 2022, although many countries may recover earlier. Industries that gather people, such as catering, tourism, and entertainment, will remain at the bottom for a long time.

“The COVID-19 pandemic has changed the technology equation for many industries. In 2021, internal processes, supply chains, customer and partner interactions, and service delivery will become more digitized, transforming IT from a technology that supports the business to a business. The biggest change this year may be how IT is funded, rather than how much to fund it.”

China's IT spending is expected to reach 3.09 trillion in 2021, an increase of 7.7% compared to 2020. (See Table 2)

Table 2. China IT spending forecast (unit: million RMB)

Source: Gartner (January 2021)