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.”
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
MATCH INFO
Confederations Cup Group B
Germany v Chile
Kick-off: Thursday, 10pm (UAE)
Where: Kazan Arena, Kazan
Watch live: Abu Dhabi Sports HD
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
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Zayed Sustainability Prize
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Killing of Qassem Suleimani
Famous left-handers
- Marie Curie
- Jimi Hendrix
- Leonardo Di Vinci
- David Bowie
- Paul McCartney
- Albert Einstein
- Jack the Ripper
- Barack Obama
- Helen Keller
- Joan of Arc
Why your domicile status is important
Your UK residence status is assessed using the statutory residence test. While your residence status – ie where you live - is assessed every year, your domicile status is assessed over your lifetime.
Your domicile of origin generally comes from your parents and if your parents were not married, then it is decided by your father. Your domicile is generally the country your father considered his permanent home when you were born.
UK residents who have their permanent home ("domicile") outside the UK may not have to pay UK tax on foreign income. For example, they do not pay tax on foreign income or gains if they are less than £2,000 in the tax year and do not transfer that gain to a UK bank account.
A UK-domiciled person, however, is liable for UK tax on their worldwide income and gains when they are resident in the UK.
KILLING OF QASSEM SULEIMANI
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
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KILLING OF QASSEM SULEIMANI
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
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Fixtures
Opening day Premier League fixtures for August 9-11
August 9
Liverpool v Norwich 11pm
August 10
West Ham v Man City 3.30pm
Bournemouth v Sheffield Utd 6pm
Burnley v Southampton 6pm
C Palace v Everton 6pm
Leicester v Wolves 6pm
Watford v Brighton 6pm
Tottenham v Aston Villa 8.30pm
August 11
Newcastle v Arsenal 5pm
Man United v Chelsea 7.30pm
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
The Birkin bag is made by Hermès.
It is named after actress and singer Jane Birkin
Noone from Hermès will go on record to say how much a new Birkin costs, how long one would have to wait to get one, and how many bags are actually made each year.
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
