COVID-19 Will Continue to Affect IT Spending in Europe This Year

European IT spending will decline 4.7% in 2020 and reach $487 billion as the COVID-19 crisis continues to loom over the European economy, according to IDC. Although many countries are relaxing lockdown restrictions, businesses will continue to face strong challenges throughout the year and industries such as transportation and personal and consumer services will be the most affected. Consequently, the combined industries will experience a decrease of 11.6% in IT spending this year.

With tough restrictions on passenger mobility and many countries implementing quarantine measures on arrival, airlines have drastically cut the number of flights, causing significant financial losses, and leading many companies to reconsider their operational strategies. The impact on tourism and leisure businesses is also strongly negative, with many hotels, restaurants, bars, and pubs forced to shut down following government guidelines. Although many countries are allowing some businesses to reopen and the situation is expected to mildly improve in the months ahead, the economic rebound will be very slow for these two industries.

On the other hand, the public sector will experience a less significant slowdown of investments in technology in 2020. Governments, educational institutions, and healthcare providers are using technology to address issues such as the monitoring of social distancing compliance, distance learning, and remote patient consultations.

"During the COVID-19 pandemic, many businesses had to adapt quickly to a new normal," said Andrea Minonne, senior research analyst, IDC Customer Insights & Analysis. "Technology has helped in many areas, from smart working to distance learning, remote asset control, and automation. Emerging technologies such as AI, blockchain, ARVR, robots and drones have helped businesses adapt to a new normal. On one hand, COVID-19 has created a challenging environment for business to invest in innovation and that has caused a drop in IT spending. On the other hand, emerging technologies represent a way to help both businesses and society respond to the crisis response.