Global information technology spending in 2023 is expected to be considerably affected by a recession, which is expected in the second half of the year, the president of the International Data Corporation has said.
IT spending by companies is set to grow by as much as 5.3 per cent on an annual basis to $3.3 trillion this year but could fall to about 3 per cent should a recession take hold, Crawford Del Prete told The National in an interview on the sidelines of the IDC CIO Summit in Dubai on Wednesday.
Inflation will be the main drag on the economy, presenting a tough task for monetary institutions such as the US Federal Reserve and the European Central Bank, he said.
“That, combined with geopolitical challenges associated with the war in Ukraine … and the opening up of China, from zero-Covid to a more open policy, will also place demand on good ground. All this will create a relatively inflationary environment,” Mr Del Prete said.
“The challenge for IT spending is that it takes potential dollars off the table that companies need to spend on other things, like the price of goods, services and energy. We would then see a deceleration in IT spending.”
Still, a recession — often defined as two consecutive quarters of negative gross domestic product growth — this year “probably won't be that bad”, he said.
Enterprises and governments have lauded the critical role that digital transformation plays in the economy and society, as the world prepares for a future powered by technology.
At the same time, they also have to deal with the challenges of macroeconomic and geopolitical factors that hinder their ability to spend more on innovation.
The Fed raised interest rates this month — the eighth time since 2022 — by 25 basis points and hinted that more increases were to come as it attempts to rein in decades-high inflation.
The International Monetary Fund, which has also warned of rising recession risks, expects global inflation to decline to 6.6 per cent in 2023, from 8.8 per cent last year, and fall further to 4.3 per cent in 2024.
It has also raised its global economic growth estimate for this year to 2.9 per cent, from a previous forecast of 2.7 per cent.
Russia's military offensive in Ukraine has also disrupted global supply chains and sent oil prices soaring, but both have since stabilised a year into the conflict.
Companies need to properly analyse their strategies and introduce technology that would not only solve business problems but also create more value for its customers and positively affect their bottom lines, Mr Del Prete said.
At the moment, artificial intelligence is the most crucial technology segment that enterprises must tap into, as it will be able to bring down costs and upskill workers, he said.
“Any company that is not looking at AI as a way to make their business and workers more productive and raise their margins is running a significant risk of becoming irrelevant over time,” Mr Del Prete said.
“There is no greater tech that you should be looking at and understanding right now. With AI, we are at the dawn of a new era.”
The latest available data from the IDC suggests that global spending on AI-centric systems will surpass $300 billion by 2026, surging about 154 per cent from an estimate of $118 billion in 2022.
I don’t believe we’re becoming over-reliant on AI; it is going to allow people to play to their strengths
Crawford Del Prete,
president of the International Data Corporation
That would be a compound annual growth rate of 26.5 per cent from 2022 to 2026, which is more than four times greater than the 6.3 per cent forecast for global IT spending over the same period.
Mr Del Prete acknowledged jobs could be lost from an automation standpoint but he said companies, as a result of using AI, would be able to create or grow new business units, resulting in the need for more staff.
“I don’t believe we’re becoming over-reliant on AI; it is going to allow people to play to their strengths,” Mr Del Prete said.
“When it comes to the journey to digitisation and rethinking consumer experiences, we’re probably at the end of the beginning.
“We have a whole lot more to do, and we're seeing levels of interaction in more ways that we can’t even imagine today.”
The five pillars of Islam
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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57%20Seconds
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Jetour T1 specs
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The specs
AT4 Ultimate, as tested
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
TOP 5 DRIVERS 2019
1 Lewis Hamilton, Mercedes, 10 wins 387 points
2 Valtteri Bottas, Mercedes, 4 wins, 314 points
3 Max Verstappen, Red Bull, 3 wins, 260 points
4 Charles Leclerc, Ferrari, 2 wins, 249 points
5 Sebastian Vettel, Ferrari, 1 win, 230 points
WOMAN AND CHILD
Director: Saeed Roustaee
Starring: Parinaz Izadyar, Payman Maadi
Rating: 4/5
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BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
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UAE currency: the story behind the money in your pockets
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Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
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War 2
Director: Ayan Mukerji
Stars: Hrithik Roshan, NTR, Kiara Advani, Ashutosh Rana
Rating: 2/5
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
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Transmission: 8-speed auto
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The Settlers
Director: Louis Theroux
Starring: Daniella Weiss, Ari Abramowitz
Rating: 5/5
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Results
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