China to Overtake the USA as the Largest Market for IT Products and Services
The annual report from TBK Consult showing the relative demand for information technology in each of the 229 countries in the world confirms the steady shift from Europe and the Americas towards Asia. With the current trends, China will overtake the US as the largest market by 2018.
The information technology industry is by nature a global industry. As the industry is blessed with low cost of entry and simple supply chains, international growth comes much easier than in most other industries. Embarking on the global growth journey is also a necessity. The combination of industry characteristics, economy of scale advantages and “crossing the chasm” challenges make the industry a “winner takes all” game. Information technology companies either grow fast globally or die slow locally.
“We have changed the algorithm behind the BECH Index for the 2016 and 2017 versions”, says Hans Peter Bech, author of the whitepaper. “The consequence of the new algorithm is a significant adjustment of the shares of global demand between countries and regions. Applying the new principles on the GDP numbers for the period 2014-17 shows China as the fastest growing market and, also, very soon, will be the largest market for IT products and services.”
The 2017 edition of the BECH Index confirms that world demand for information technology continues to be on the move and that the changes are accelerating. The Americas have experienced a steep decline in the period (2014-2017) due to a drop in the demand from all countries in North, South & Central America. Europe continues to lose its share of global demand although the decline is much slower than in the Americas. Nevertheless, North America and Europe continue to be very interesting areas with some of the biggest markets in the world and because of increasing labor costs and public expenditure, there is a growing need for business analytics and process and cost optimization solutions. The Middle East has stabilized their share and shows a small increase in the 2017 figures. China continues its growth and has, with a 15% increase, further consolidated its position as the second largest information technology market in the world. If the trends continue, China will take the position as the largest market in 2018.