World Demand for Information Technology is on the Move
As information technology companies prepare for global growth the first question to answer is “how?”
We discuss these issues in the first three whitepapers in the series named “Entering a Foreign Market in the Information Technology Industry.” I also have a conversation on “The Intense Planning and Logistics behind Expanding a Business” with Marylou Tyleron her blog.
We recommend that B2B information technology companies verify the viability of their business models in their domestic market first. When growing revenue has been proven profitable, predictable and scalable then it is time to conquer foreign markets.
Where?
The second question asked before jumping to foreign markets is “where should we go next?”
To help information technology executives make this decision based on facts rather than emotions, TBK Consult calculates and publishes the BECH Index annually.
The BECH Index for a country reflects the demand capacity of the country and thus also reflects the share of global demand for information technology related products and services.
Table 1: The BECH Index for the Major Markets 2012-15
As can be seen from Table 1, world demand is on the move. The Americas experienced a slight decline in 2015 mainly due to a drop in North America. Europe continues to lose its share of global demand. Nevertheless, Europe continues to be a very interesting area 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 slight growth in the Middle East has most likely been affected by the changes in the oil prices experienced lately and we should expect some further decline here in the 2016 figures. Future growth in the Middle East will require a restructuring of the economies away from the dependency on oil and gas. China continues its growth and has consolidated its position as the second largest information technology market in the world.
10% of the World’s Countries Represents 85% of Global Demand for Information Technology
These 25 countries make up close to 85% of world demand for information technology products and services with 201 countries sharing the remaining 15%. This doesn’t mean that these 25 markets are the most attractive as other issues than size may play a more important role.
The five countries USA, China, Japan, Germany and the UK make up more than half of world demand for information technology.
Table 2: Top 25 information technology countries in the world
The ranking has a new member as Turkey has jumped from below the list in 2014 to position 22 in 2015. Hong Kong has left the top 25 markets for information technology.
