ICT Spending Growth in CEE in 2020 Will Fall Short of Previous Year

Overall ICT market spending in Central and Eastern Europe (CEE) is forecast to grow by 3.1% in 2020 year on year, which is a decline from the 4.0% growth seen in 2019, according to IDC. Total spending, including telecom and business services, will total $136.66 billion in 2019, with an expected compound annual growth rate (CAGR) of 2.9% through 2023.

"In Central and Eastern Europe, cost and efficiency are regularly at the top of business priorities. Companies should carefully consider where to tighten their belts, and to leverage new technologies that will facilitate cost savings rather than representing a burden on their budget," says Ivana Slaharova, Insights research manager at IDC CEMA.

Manufacturing, finance, and telecommunications make up the greatest share of spending in the business sector, accounting for about 48% (combined) in 2019. Telecommunications will be also the fastest developing industry, with IDC forecasting 6.3% year on year growth in 2020.

In Central and Eastern Europe in 2019, 41% of the total ICT spending came from telecom services, followed by hardware (34%) and IT services (13%). Broken down by country, the biggest market is Russia ($47 billion in ICT spending), followed by Poland ($ 20.4 billion) and the Czech Republic ($10.9 billion). Large businesses (more than 500 employees) accounted for half of total ICT spending in 2019. Medium-sized businesses (100-499 employees) were responsible for around 23% of spending, followed by small businesses (17%) and small office/home office (nearly 10%).

There are many innovative technology startups in the CEE region, which are supported by the government in the initial stages of their development. But it is difficult for many of these organizations to raise a second or third round of funding to grow their business and expand to international markets.