Political and economic uncertainty are causing a slowdown in Australia’s tech market, with only two per cent growth forecast for this year, and one per cent for 2018, according to research firm Forrester.
A new report from the firm has attributed the Australian tech industry’s slowing growth to a number of factors: increasing competition from global operators, changing trade deals, and political uncertainty – including the shift toward populist, anti-globalisation governments in the US, UK and other European countries. The Brexit vote in the UK and the election of Donald Trump in the US have introduced major uncertainties in the economic outlook for key tech markets, and for their trading partners, according to Forrester.
However, there will be some areas of growth in the tech market, with Forrester forecasting that approximately half of Australia’s technology investment will go towards software, technology outsourcing and consulting services. In particular, 36 per cent of businesses in Australia and New Zealand have invested in machine-to-machine or IoT solutions or will do so over the next 12 months to automate or optimise the back end or to create new revenue opportunities.
Overall, while the Asia Pacific region was once the fastest-growing tech market in the world, that is no longer the case. Across the Asia Pacific, 2017 is expected to see a growth of three per cent for technology budgets, and a growth of 5.7 per cent in 2018. Japan is still at the forefront, with China not far behind. Over the next two years however, Japan is expected to be eclipsed by China and India – two countries that will see some of the strongest growth in the world over the next few years.
Globally, the US tech market is expected to see the strongest growth at 4.3 per cent in 2017 and 4.8 per cent in 2018. This will be due to the stimulus of likely tax cuts and increases in infrastructure spending. Other markets such as those in Latin America and Europe are expected to struggle, while Canada and the Asia Pacific are expected to see similar growth rates to North America.