Annual ICT Spending to Reach $5.5 Trillion by 2020

The growth of new technologies including the IoT, Robotics, and AR/VR will drive the next wave of growth in the ICT industry, enlarging the overall market opportunity to $5.5 trillion by 2020, according to the new IDC Worldwide Black Book: 3rd Platform Edition.

The forecast illustrates the extent to which the industry is dependent upon new technology innovation for growth in the years ahead, as traditional revenue streams begin to decline in the face of cannibalization, substitution, and the shift to cloud-based solutions.

New technologies, which IDC calls "Innovation Accelerators," will provide almost $7.4 trillion in aggregate industry revenue from 2015-2020, adding $1.8 trillion to the overall size of the industry in terms of annual sales by the end of the forecast period.

A large proportion of this spending will come from the fast-growing IoT market, which is forecast to reach almost $1.3 trillion in annual revenue by 2020, of which more than $1 trillion represents new opportunity outside of traditional technology market categories (devices, infrastructure, software, services, and telecom). Robotics, AR/VR, security, cognitive/artificial intelligence, and 3D printing will contribute the rest of this fast-growing portion of the ICT market.

Between 2015 and 2020, overall ICT Spending, excluding the Innovation Accelerators, will see a compound annual growth rate (CAGR) of just 1% in constant currency terms. Including the Innovation Accelerators, ICT spending will increase by 5% over the same period.

In total, the Innovation Accelerators will post a CAGR of 18%. Asia/Pacific (excluding Japan) represents the largest market for Innovation Accelerators, forecast to reach more than $600 billion by 2020, followed closely by the United States. The fastest growth over the same period will be in Latin America, Central & Eastern Europe, and the Middle East and Africa.

With public cloud services still growing at a double-digit rate, cloud will continue to cannibalize from traditional spending on infrastructure, software, and IT services. Big data and analytics is also still expanding at a double-digit rate of growth and is forecast to see a 12% CAGR between 2015 and 2020.

Public cloud services and big data and analytics will each provide more than $200 billion in annual revenue by 2020. Meanwhile, the explosion in smartphone sales over the past few years and the ongoing growth of mobile data services means that mobility is already valued at more than $1.5 trillion in annual sales.