1. Massive Investment in IT Worldwide
According to a presentation by Harris Miller, President of the World Information Technology and Services Alliance in October 2004, global ICT spending had reached US$2.5 trillion by 2004 and was projected to surpass US$3 trillion by 2007 (as shown in Figures 1 and 2 below).
Figure 1: Global ICT Spending ($US billions)
According to a study by the World Information Technology and Services Alliance (WITSA) in 2008, the global information and communications technology (ICT) market will exceed US$$3.7 trillion (US$1.00=RM3.25) [in 2008] and US$4 trillion by 2011.
Figure 2: Global ICT Spending by Region ($US billions)
Of these amounts, approximately 70% was business and governmental investment, with the balance in consumer goods. According to Miller's presentation, in 2003, governmental spending on IT amounted to $398.1 billion worldwide, while business and industry accounted for approximately US$1.5 trillion, with a majority of that investment in communications, finance, manufacturing, services, transportation and general business. From 1999 through 2004, total ICT spending ranged from 6.75% to 7.35% of total global gross domestic product (GDP).
According to IT market research firm IDC in late February 2008, worldwide IT spending will rise by 5 percent in 2008, reaching $1.38 trillion, and in the United States IT spending growth will moderate at 4 percent, compared to 6 percent growth in 2007. In January, ITD predicted that that between 2006 and 2010, IT spending worldwide will grow at a compound annual growth rate of 6.3 percent, rising from $1.16 trillion in 2006 to $1.48 trillion by 2010.
According to Andrew Bartels at Forrester Research in February 3, global purchases of IT goods and services will equal $1.7 trillion in 2008, growing by 6% after a 12% increase in 2007. A declining US dollar boosted 2007 growth rates and will do so in 2008 as well; measured in Euros, global IT purchases growth will be 4%. A US economy in or near recession will be the main cause of slower 2008 growth, pulling down growth in IT purchases both in the US and with major trading partners in Europe and the Americas. IT purchases in the US will grow by less than 3%, while growth in Western and Central European purchases will slow to 3%; IT purchases in the rest of the Americas will expand in local currencies at 6% rates. Asia Pacific and the oil-exporting area of Eastern Europe, Middle East, and Africa will be the main engines of growth. Total global spending on technology goods, services, and staff, the global IT operating budget from a CIO perspective, will reach $2.4 trillion in 2008, an 8% increase from 2007.
According to Dale W. Jorgenson and Khuong Vu, the growth of IT
investment jumped to double-digit levels after 1995 in all the G7 economies
- Canada, France, Germany, Italy, Japan, the United Kingdom and
the United States. These economies accounted for nearly half of
world output and a much larger share of world IT investment. The
surge of IT investment resulted from a sharp decline of prices of
IT equipment and software. Jorgenson (2001) traced this to a drastic
shortening of the product cycle for semiconductors from three years
to two years, beginning in 1995. All seven regions of the world
economy experienced a surge in investment in IT equipment and software
The impact of IT investment on economic growth was most striking in the G7 economies. The rush in IT investment was especially conspicuous in the U.S., but jumps in the contribution of IT capital input in Canada, Japan, and the U.K. were only slightly lower. France, Germany, and Italy also experienced a surge in IT investment, but lagged considerably behind the leaders. IT investment subsided among the G7 economies after the dot-com crash of 2000, while the contribution of Non-IT investment varied considerably and explains important differences among growth rates of the G7 economies.
Even though the above analysts and experts do not agree on the exact numbers or the precise definition of IT investment, it is clear that global spending and investment on IT have been enormous since 1995, and have continued to grow from 3-6% per year. If we assume that a good portion of those IT expenditures are in the form of contracts, projects and portfolios of projects, then the need for project management has been growing rapidly along with the investment. This is exactly what we have seen in the PM profession and in the marketplace.
2. www.witsa.org/sa04/DP2004Pres-SA04v1.ppt#256, 2, Slide 2
6. Jorgenson, Dale (Harvard University) and Vu, Khuong (National University of Singapore); Information Technology and The World Growth Resurgence: www.economics.harvard.edu/faculty/jorgenson/files/handbook.worldgrowt hresurgence.palgrave.08_0214.pdf