According to Forrester Research, the growing digital economy is expected to capture 17% of global GDP by 2028, with a 7% compound annual growth rate (CAGR) through 2028. This growth will drive robust technology spending across the globe. In 2025, global technology spending is projected to reach $4.9 trillion, with a robust growth rate of 5.6%.
The drivers of this growth are clear. The finance and insurance, government, and media and information sectors currently account for 46% of global tech spend. Other key drivers of global tech spending include software, IT services, and emerging technologies such as generative AI (genAI) and cloud computing.
Software Spending to Capture Nearly 60% of Global Tech Spend Growth
Software spending is expected to be a major driver of global tech spend growth, capturing nearly 60% of global tech spend growth through 2029. This growth will be fueled by increasing demand for cybersecurity, cloud computing, genAI, and legacy system modernization. The forecast shows that software spending by enterprises and governments will reach 1.7% of global GDP by 2029, nearly doubling its worth since 2016.
GenAI is expected to revolutionize sectors such as financial services, media, and retail, enhancing customer experiences with more personalized and humanlike virtual assistants and customer service solutions. As a result, genAI is expected to be a major driver of software spending growth in the coming years.
IT Services Spending to Remain Strong
IT services spending is also expected to remain strong, with 19% of global tech spend coming from tech consulting and system integration services, and 15% coming from tech outsourcing and hardware maintenance. Driven by infrastructure as a service, outsourcing services growth is expected to outpace that of consulting services.
Regional Trends: US and Asia Pacific Region to Drive Growth
The United States is expected to see a 6% increase in technology spending in 2025, driven by lower inflation, reduced interest rates, and a dynamic technology sector. The US accounted for 41% of global tech spend and 46% of AI software spend in 2024. Almost 70% of the top 24 companies by market cap that saw the fastest growth from 2015 to 2023 come from the US, and more than half of these are media and information companies.
The Asia Pacific region is also expected to drive growth, with a surge in real GDP growth that far exceeds the global average, led by countries such as India, the Philippines, Vietnam, and Indonesia. This rapid economic expansion drives tech spending growth, with emerging countries known for innovation like China, India, Japan, and Malaysia showcasing the region’s potent tech investment potential.
Managing Tech Inhibitors: Balancing Tech Talent Availability and Technical Debt
Enterprises need to balance tech talent availability with the minimization of technical debt and tangible tech investment returns. Legacy systems still capture two-thirds of global tech spending, and with the half-life of tech skills at less than five years, skills renewal of the tech workforce is vital.
To accelerate technology spending growth in 2025, enterprises will focus on growing their AI infrastructure capacity, with strong growth expected for data centers, as well as finding growth through partnerships and acquisitions.
