The crisis will affect investments in new technologies
Research firm IDC has said that global technology investment will slow down considerably in 2009 due to the financial turmoil that has puzzled international markets since September.
IDC now expects global information technology investment to grow 2.6% in 2009, below its previous forecast of 5.9% growth. In the US, investment is expected to grow just 0.9%, well below IDC's forecast of 4.2% in August.
There are already clear signs that investment in technology is weakening. Last week, Cisco Systems, the first of the major technology companies to report its revenues including the month of October, warned that orders for its networking system fell sharply during that month. The tech leader expects sales to decline in the current quarter.
Despite the economic slowdown, IDC expects investment in technology products and services to continue to grow next year, only at a slower pace.
Information technology, IDC research chief John Gantz said in a statement, "is in a better position than ever to withstand the downward pull of an economic slowdown."
Gantz noted that technology is deeply implicated in important business operations and "is critical to achieving greater efficiency and increased productivity." Software and services, which can save companies money, will see strong growth, while investment in hardware is expected to decline in 2009, except for data storage.
Geographically, growth will be slower in the US, Japan and Western Europe, where it will be around 1% next year. The emerging markets of Central and Eastern Europe, Africa, Latin America and the Middle East will continue to experience what IDC has called “healthy growth,” albeit at levels markedly lower than their previous double-digit forecasts.
IDC expects technology investment to “fully recover” in 2012, with growth rates close to 6%. Still, the research firm estimates that the sector will lose more than $ 300 billion in revenue due to falling investment over the next four years.
As bleak as the situation may sound, IDC analyst Stephen Minton pointed out that technology investment is actually doing better this time than in the previous crisis, after the 9/11 attacks. The recession of 2001 and 2002 came after a technology bubble characterized by overinvestment by companies in technology products.
This time around, however, there is no such bubble, so although companies are reducing their investment in technology as part of broader cuts to cope with the recession, they still tend to consider investment in technology as an important part. of his business, Minton noted.
Source: Associated Press