IDC: European ICT Investments are Growing 4 Percent in 2022

IDC Research

Global research company IDC estimates that Europe’s ICT spending will total $1.1 trillion in 2022. It means that in 2022, the growth rate will be 4 percent, according to IDC. Europe’s ICT spending will be close to $1.4 trillion by 2026, expanding at a 5 percent five-year CAGR from 2021 to 2026.

In 2022, software investments will account for the majority of technology spending in Europe. Software will also see the fastest year-over-year increase, driven by platforms for artificial intelligence, collaborative apps, and tools for software quality and life-cycle management.

The software industry has been able to withstand circumstances that affected the hardware sector, which is anticipated to contract 0.1 percent this year, thanks to investments in cloud-first solutions. The Russian-Ukrainian War, inflationary pressures, and an anticipated recession are all reducing demand for equipment in Europe. The rising cost of living, product shortages, and halted shipments will have the most effects on consumer spending on electronics.

Consumer, banking, and discrete manufacturing will be three of the main ICT customers in 2022, accounting for over 46 percent of total ICT spending. Disruptions in the supply chain have an impact on Europe, and many of these are related to the conflict in Ukraine. Many sectors are being impacted by this, and they are using automation to streamline procedures and lessen disruption.

Andrea Minonne, Research Manager at IDC UK
“European companies are caught in a series of challenges including skill shortages, supply chain disruptions, post-COVID-19 recovery, high inflation, rising costs of living, and armed conflict in Eastern Europe,” said Andrea Minonne, Research Manager at IDC UK.

To redefine how financial services deliver employee and customer experiences, banking will put a special emphasis on transformative processes that emphasize automation and customer-centricity. Through automation, core banking services, risk management, HR and talent management, and audit and compliance will all be reimagined. On the production side, a lack of qualified workers is disrupting the supply chain.

When resources are scarce, many businesses will invest in technology to relieve strain on current employees, automate operations, and lessen their reliance on human labor.

The outlook for Russia is less encouraging, with an overall decrease in ICT spending of 23% predicted for 2022. This will be caused by a significant decline in hardware expenditure as a result of the exit of several hardware suppliers from Russia. The resilience of technology and the dependence on domestic firms, however, will both contribute to the growth of the software and IT services industries.

Skill Shortages, Supply Chain Disruptions, High Inflation

“European companies are caught in a series of challenges including skill shortages, supply chain disruptions, post-COVID-19 recovery, high inflation, rising costs of living, and armed conflict in Eastern Europe,” said Andrea Minonne, Research Manager at IDC UK. “Technology has proved to be a solution to many of these challenges as organizations are looking at automation and real-time decision making to maximize their performance in such challenging times.”

IDC’s Worldwide ICT Spending Guide Enterprise and SMB by Industry, formerly known as the Worldwide Semiannual ICT Spending Guide Industry and Company Size, is IDC’s flagship all-in-one data product for collecting IT expenditure across more than 100 technology categories and 53 countries. The guide offers a detailed look at the market for IT expenditure from the perspectives of a country, an industry, a company’s size, and a technology.