And the winners are China and India – The BECH Index 2020

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“The information technology industry is by nature a global industry, says Hans Peter Bech, author of the whitepaper. “The top 25 countries make up more than 80% of world demand for information technology products and services with 204 countries sharing the remaining 20%. This doesn’t mean that these 25 markets are the most attractive as issues other than size may play a more important role. The six countries Cina, USA, India, Japan, Germany and Russia make up over half of world demand for information technology.”

This whitepaper presents an estimation of the relative demand capacity for B2B information technology and related services worldwide. This estimation is called “The BECH Index.” TBK Consult calculates the BECH Index annually based on data published by The Central Intelligence Agency (CIA).

The whitepaper is based on the CIA national accounting estimates for 2019 and does not reflect the impact of the COVID-19 pandemic. The virus will no doubt claim a substantial portion of the expected economic growth in most countries, but it may not impact the overall distribution of industrial demand. We will not know for sure until we see the numbers in 2021.

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The COVID-19 pandemic is changing the agenda for most businesses in all countries and it is uncertain what the world will look like on the other side.

This whitepaper is based on the CIA national accounting estimates for 2019 and does not reflect the impact of the COVID-19 pandemic. The virus will no doubt claim a substantial portion of the expected economic growth in most countries, but it may not impact the overall distribution of industrial demand. We will not know for sure until we see the numbers in 2021.

The world market is divided into 229 countries of which some of the bigger countries must be considered as several markets. Talking about the US as one market when you haven’t won the first customer or independent channel partner there yet may seem overly self-confident. For most information technology companies, the US is at least 50 geographical markets, Germany is 14 markets (Bundesländer), France is at least 4 markets, the UK is 4 markets, the Nordics are 4 markets and so on.

As the whitepaper illustrates, world demand continues moving east. The Americas have experienced a 15 per cent decline in the period 2014-2020.

The demand from Central and South America drops again in 2020 and the decline in demand from North America results in a net loss of 1.52 per cent for the area.

The European Union has lost 11 per cent of global demand in the same period and after a slight increase in 2018, the decline continues in 2020. Russia, the sixth biggest market, has lost 13,79 per cent since 2014. The loss in 2020 is 2.18 per cent.

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 information analytics, process and cost optimization information technology-based solutions.

The Middle East’s share of global demand has decreased continuously since 2017 and the region has lost 3,65 per cent in four years. Future growth in the Middle East still requires a restructuring away from the dependency on oil and gas and a general liberation of the economy. I remain skeptical that they will be successful with such a transformation and predict a continued decrease in the region.

China continued its growth and has, with a 7.69 per cent growth from 2019 to 2020, become the largest information technology market in the world pushing the USA to second place.

For 2020 the Asia Pacific region’s share of global demand increased 2.33 per cent. The most prominent growth area is India showing a 34 per cent increase in the period 2014-2019. However, from 2019 to 2020 India’s share of world demand declined 1.57 per cent.