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May 31, 2001
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Money > Business Headlines > Report May 31, 2001 |
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Global IT spend to touch $1.746 trillion by 2005NetScribes/TM Arun Kumar Despite the recent slowdown in the US economy, global IT spending is expected to experience a strong and sustained 9.8 per cent compounded annual growth rate between 2001 and 2005, says a recent study by Aberdeen Group. The study expects global IT spend to rise to $1.746 trillion by 2005 from the expected $1.21 trillion in 2001. According to the report, North America, Western Europe, and the Asia Pacific Rim will continue to dominate global IT spending with a lion's share of 85.4 per cent of the total IT spend by 2005, just a shade less than the 86 per cent they are expected to account for in 2001. "These three regions lead all others by a substantial margin and are the most significant established markets," the report says. The report says that key drivers to this growth would vary depending on the region. "But the ubiquitous presence of the Internet and the limitless improvements in all business practices promised by new technologies and applications encourage spending in order to remain competitive or to create new markets," it says. Significantly, by 2005, North America's share of the total spend will drop by about 2 per cent to 39 per cent and Western Europe's share will go down by 0.5 per cent to 24 per cent. The Asia Pacific Rim's share will increase by over 1 per cent to 22 per cent, the report predicts. However, North America will continue to lead all other regions in spending, followed by Western Europe and Asia Pacific Rim. Driven principally by the US, North America will maintain its position as the world's leading region for IT spending with a CAGR of about 8.5 per cent for the period and will spend $681 billion on IT by 2005. Western Europe's CAGR, according to the report, will be slightly higher at 9.2 per cent as the region narrows the spending and infrastructure gap between itself and North America; by 2005, it will spend $422 billion on IT. At 11.4 per cent, the Asia Pacific Rim will experience the highest growth rate among the three leading regions as it continues to fulfill the demands of the region's advanced economies. By 2005, the region will spend $387 billion on IT, the report says. |
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