Led by the financial services, manufacturing, and healthcare sectors, information technology spending worldwide is projected to hit $2.7 trillion by 2020, according to a report from IT research firm IDC.
The company's semi-annual report, which looks at IT spending across more than 100 technology categories and 53 countries, covers 20 industries and projected healthcare IT spending would remain the fastest growing industry with a five-year compound annual growth rate (CAGR) of 5.7%, despite concerns that spending growth may have peaked.
In addition to the healthcare sector, industries such as financial services and manufacturing, where companies continue to invest in third platform solutions such as cloud, mobility, and big data as part of their digital transformation efforts, are expected to drive spending growth.
"In the US, the greatest near-term growth is expected among healthcare providers, professional services firms, banks and securities and investment services organizations," Jessica Goepfert, program director of customer insights and analysis at IDC, said in a statement. "These service-based organizations are turning to third platform technologies like mobility and big data to enable more productive and meaningful ways to engage with clients."
She noted that in addition to these customer-centric priorities, businesses operating in regulated environments are also turning to technology to assist with compliance.
In addition to the big three drivers of IT spending, banking, media, and professional services are also projected to see robust growth with CAGRs of nearly 5% and combined revenues of more than $475 billion in 2020.
Thanks to the ongoing smartphone explosion, consumer purchases accounted for nearly a quarter of all IT revenues in 2015, but the report warns weakening spending on mobile devices (including tablets) and PCs could have a dampening effect on the IT market overall.
"While the consumer and public sectors have dragged on overall IT spending so far in 2016, we see stronger momentum in other key industries," Stephen Minton, vice president of customer insights and analysis at IDC, said in a statement. "Enterprise investment in new project-based initiatives, including data analytics and collaborative applications, remains strong and mid-sized companies have been especially nimble when it comes to rapidly adopting third platform technologies and solutions."
Minton said assuming the economy remains stable in 2017, smaller businesses will also begin to climb aboard the third platform in greater numbers.
The report, which breaks down businesses into five size segments, found more than 45% of all IT spending worldwide will come from very large businesses (those with more than 1,000 employees), while medium (100-499 employees) and large (500-999 employees) business will see the fastest growth in IT spending, each with a CAGR of 4.4%.
"The small business market has been challenged by the economic slowdown in some regions but there is now some pent-up demand for IT assets in this segment, which will materialize as the economy begins to improve," Minton added. "Meanwhile, the strongest growth is still among mid-sized companies, which are more nimble than very large enterprises and less exposed to economic volatility than the smallest businesses."