Govt IT spending to grow
Tan Ee Sze
12/07/2007

Governments and government organisations within the Asia Pacific region, excluding Japan, (APEJ) will continue to spend steadily on IT services and products with a compound annual growth rate (CAGR) of 7.9 per cent from 2007-2011.

This IT growth is largely driven by China and India, which together account for more than half of the total, according to a report by Government Insights, an IDC company.

"The public sector within the APEJ region represents an industry of diverse spending behaviour, with spending expected to exceed US$32b by 2011. Developing countries like China and India continue to be key drivers of this spending as they have been building up their information and communications technology (ICT) infrastructure to increase outreach to their citizens, especially in the rural areas," said Raphael Phang, research director of Government Insights Asia Pacific.

"With a double-digit CAGR in the China (10.2 per cent CAGR) and India (17.6 per cent CAGR), the growth rate of these developing countries also outpaces all other countries within the region," he added.

The Government Insights study provides latest forecasts for the IT spending in the public sector including government, education, and healthcare, from 2007 to 2011, and provides IT spending across geographies, broad IT segments, and specific IT categories. Government Insights predicts overall IT expenditure by broad segments will continue to be largely driven by hardware, although a slight decline is expected in this expenditure from 57.5 per cent in 2007 to 54 per cent in 2011. Expenditure on services is expected to increase steadily with a similar trend for software expenditure during this period.

"IT investment in the APEJ Government sector will remain strong, and is expected to account for US$19.5 billion of the total public sector IT expenditure by 2011," said Raphael. However, going forward, he said growth is expected to decline as e-government initiatives shift beyond the infrastructure build-out stage, towards maximising the value of existing infrastructure.

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