Forrester has released a report detailing an expected increase in global technology spending, projecting a rise to USD $4.9 trillion by 2025.
The Global Tech Market Forecast, 2024 to 2029, by research firm Forrester, predicts that global tech spending will see a growth rate of 5.6% in 2025, reflecting an increase from USD $4.7 trillion in 2024. This growth is driven largely by advancements in software, IT services, generative AI, and cloud technologies, with Asia Pacific and North America anticipated to lead in growth rate.
According to Forrester, software and IT services will make up a significant portion of the global technology market in 2025, comprising 66% of the total spend. The report attributes this to rising investments in cybersecurity solutions and the modernisation of existing systems. Software, in particular, is poised to grow at a rate of 10.5%, expected to capture 60% of tech spend growth by 2029, marking it as the fastest-expanding sector in technology.
Generative AI investments are set to catalyse growth across specific industries, the report highlights. Industries such as financial services, retail, and media are expected to increasingly rely on AI-powered tools to improve customer experiences and operational efficiency. Consequently, businesses will need to adapt by repositioning their workforce, pursuing tech talent, and reducing technical debt.
In the Asia Pacific region, tech spending is predicted to increase by 5.6% in 2025. A substantial rise in real GDP growth, surpassing the global average, will be seen in countries such as India, the Philippines, Vietnam, and Indonesia. Notably, governmental initiatives in China and India, along with increased generative AI and semiconductor investments in Japan and South Korea, are key factors contributing to this growth. India, in particular, is expected to experience a 9.6% rise in tech spending in 2025.
North America's tech spending is forecasted to grow by 6% in 2025. In the United States, tech expenditure, excluding staffing costs, is anticipated to surpass USD $2 trillion for the first time. Notably, 63% of this spend will be driven by financial services and insurance, government, media and information, and professional and business services. The US is highlighted as a leader, representing 41% of global tech spending and 46% of AI software spend, signifying its stronghold in generative AI and cloud technology adoption.
In Europe, tech spending is projected to rise by 5% in 2025, with expenditures exceeding USD $1.5 trillion for the first time. By 2029, software and IT services are expected to account for 78% of tech spending in the region, up from 68% in 2016. More than 40% of European tech spending is seen to come from the financial services, media and information, and professional and business services sectors.
Principal Forecast Analyst at Forrester, Michael O'Grady, noted, "Over the next five years, technology investments will reshape industries at an unprecedented pace. GenAI, cloud technologies, and cybersecurity will take center stage, transforming how businesses operate and deliver value. Companies that prioritise these investments will not only strengthen their competitive edge but also achieve sustainable growth, but it's important that they also balance their rapid tech investments with ongoing efforts to manage legacy systems and reduce technical debt."
