In this exclusive interview, Gerald Wang (picture), Research Manager, IDC Government Insights, Asia/Pacific, discusses the ICT trends in Asia Pacific public sector in the light of the recently released IDC Government Insights’ report, “Pivot Table: Asia/Pacific (Excluding Japan) Public Sector IT Spending 2013–2018
Recently, IDC Government Insights released a report titled, "Pivot Table: Asia/Pacific (Excluding Japan) Public Sector IT Spending 2013-2018". What were the major take aways from that report?
Traditional IT budgets continue to shrink due to government-wide cost efficiency and productivity-focused measures- The overall year-over-year (YoY) IT spending growth in 2015 for the APEJ public sector is anticipated to grow at 5.9%, which indicates both a more cautious as well as maturing APEJ public sector IT spending landscape. This is because the APEJ public sector will be increasingly focused on consolidating and streamlining of scarce ICT resources, attaining better manageability tools for effective decision making, and addressing the urgent need to increase cybersecurity priorities of digital assets
Emerging ASEAN economies transitioning into more matured ICT spending mindsets with increased IT services spend (e.g. a growing confidence / capability for higher level ICT program management and thereby, outsourcing more ICT contracts, especially non-mission critical ones)- 2015 will be the year the overall hardware spending is surpassed in absolute numbers by overall IT services spending for the APEJ public sector. The Association of Southeast Asian Nations (ASEAN) member-countries leading this transition include Malaysia, the Philippines, and Thailand, indicating more established domestic ICT landscapes
Large-base domestic ICT markets (i.e. China and India) and leading ICT economies (i.e. Singapore, South Korea and Australia) dominate the Asia Pacific total ICT spend- Together, public sectors in Australia, the PRC, India, Singapore, and South Korea are forecasted to spend over US$1 billion on IT spending in 2015. As a group, they represent 82% of the entire APEJ public sector IT spending
The report said that IT investments of the Asia Pacific excluding Japan (APEJ) government sector will increase from US$25.4 billion in 2014 to US$32.5 billion in 2018 with a five-year compound annual growth rate (CAGR) of 6.2%. What are the reasons behind this growth? Are there any particular technologies at play here?
Slowing APEJ ICT spending is due to maturing government ICT spend in China. However, this also means there will be growing appetites for disruptive innovations (e.g. IoT landscapes, wearables, immersive interfaces, etc.) so as to fulfill productivity, industry creation and empowerment and socioeconomic empowerment goals. Quelling sharp variations in global socioeconomic uncertainties will be critical for the government sector in 2015. As China's gradually maturing economy tapers down, the robust Asia/Pacific growth forecasts experienced in the past five years, many governments are expected to embrace pervasive ICT use as a means of sustaining productivity drives, thereby, turning the ICT landscape into a dynamic battlefield of innovation, cross-functional collaborations, and personalized eservices.
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