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Worldwide Digital Transformation Investments Forecast to Reach $1.8 Trillion in 2022, According to New IDC Spending Guide

Global spending on the digital transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022, an increase of 17.6% over 2021. According to a new update to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide, DX spending will sustain this pace of growth over the 2022-2026 forecast period with a five-year compound annual growth rate (CAGR) of 16.6%.

"IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager, Customer Insights & Analysis at IDC. "As organizations accelerate their pursuit of a digital-first strategy, they are channeling these investments into both internal operations and external direct engagement. The investments in internal operations are largely focused on improving efficiency and resilience while customer experience transformation has become a DX priority for many companies."

Operational investments stand out among the 51 strategic priorities included in the DX Spending Guide. The DX priorities that will see the largest investment in 2022 include Back Office Support and Infrastructure, Smart Manufacturing, and Digital Supply Chain Optimization. Together, these three investment areas will represent more than $620 billion in DX spending this year. Other operational priorities that will see significant investments in 2022 include Connected Assets, Facility Management, and Operationalizing Data and Information. Customer experience investments, such as Omni-Experience Engagement, and Omni-Channel Commerce, will account for more than $300 billion in DX spending in 2022. The DX strategic priorities that will experience the fastest spending growth over the five-year forecast include narrowly focused priorities like Frictionless Insurance (27.4% CAGR) and Legal (27.0% CAGR) as well as operational priorities such as Enterprise and Resource Management (26.0% CAGR).

From an industry perspective, the discrete and process manufacturing industries will account for nearly 30% of worldwide DX spending this year, followed by the professional services and retail industries. The utilities and banking industries will also see DX spending of more than $100 million this year. Meanwhile, the financial services sector will deliver the fastest DX spending growth over the 2022-2026 forecast period, with the securities and investment services, insurance, and banking industries all forecast to have five-year CAGRs of 19% or more.

The United States will be the largest geographic market for DX spending in 2022, accounting for nearly 35% of the worldwide total. Western Europe will be the second largest region for DX spending, followed closely by China. China will also deliver the strongest growth in DX spending with a five-year CAGR of 18.5%. Latin America will be the region with the second fastest growth with a CAGR of 18.2%.

"Digital transformation spending in EMEA will be nearly $469 billion in 2022, an increase of 16.7% over 2021 and underlining the strong importance of DX projects across industries in Europe," said Angela Vacca, senior research manager, European Industry Solutions, Customer Insights & Analysis. "The highest growth will be in the finance and manufacturing industries where Big Data and Artificial Intelligence related use cases will dominate across financial institutions and IoT and robotics related use cases will be growing very dynamically among manufacturing companies. In Central and Eastern Europe, the Russia-Ukraine war will delay investments for the current year impacting across many sectors, particularly the resource industry. Supply chain disruptions will also impact some manufacturing and distribution segments while disruption of networking and IT supply chains will contribute to the postponement of some DX projects in the telecom industry."

The IDC Worldwide Digital Transformation Spending Guide (V1 2022) quantifies enterprise spending for more than 300 DX use cases and 12 technology markets across 19 industries and 14 geographic regions. The guide provides spending data for 51 DX strategic priorities and 99 programs as well as technology spending by deployment type (cloud, non-cloud/other).

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information about IDC's Spending Guides, please contact Monika Kumar at mkumar@idc.com.

Click here to learn about IDC's full suite of data products and how you can leverage them to grow your business.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,200 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

Global spending on the digital transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022, an increase of 17.6% over 2021, according to the IDC Worldwide Digital Transformation Spending Guide.

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