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AI, security and remote work driving European ICT spending

European information and communication technology (ICT) spending will total $1.1 trillion in 2024 and will reach more than $1.3 trillion by 2027, recording a five-year (2022-2027) compound annual growth rate (CAGR) of 5.3%. Software and business services remain the main drivers fuelled by the need for remote work, security and accelerating adoption of artificial intelligence, according to a forecast by International Data Corporation (IDC)

“European industries will continue to face challenges in 2024, but with the easing macroeconomic pressure, ICT spending is poised to gain momentum.” 

“ICT market value will record the fastest growth in Sweden, Finland, and Norway this year, where a strong base of software companies is driving digital innovation.” 

“In contrast, the overall ICT market is expected to struggle in Romania, where high inflation has resulted in a significant drop in the market value of devices, leading to a slight decline in total ICT spending.”

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“Although inflation and energy prices have been falling, geopolitical tensions and the economic slowdown will fuel uncertainty for European businesses well into 2024. However, ICT investments remain safe, and spending will grow across all industries,” says Zsolt Simon, senior research analyst at IDC Europe. 

“The software and information services industry will be particularly interesting to watch, as developments in generative AI will boost spending in the years ahead.”

IDC says that the energy sector will present one of the highest growth rates of ICT spending this year as the diversification of energy sources and compliance with environmental and sustainability-related regulations will require upgrades in digital capabilities.

“Software and information services organisations will continue to invest heavily in cloud solutions and AI tools.” 

“The adoption of generative artificial intelligence (GenAI) through a wide range of areas, including chatbots, language processing and coding, will support investments in software solutions such as customer relationship management (CRM) applications and collaborative applications.” 

“While the healthcare payer industry remains the smallest in terms of total value, it will record strong ICT spending growth through 2027, building on the technology developments in health insurance systems to provide safer, more flexible, and more reliable service to clients.”

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