IDC Asia Pacific Reports Asia Pacific Manufacturing Spend Excluding Japan to Grow at 4.8% CAGR

IDC Asia Pacific Reports Asia Pacific Manufacturing Spend Excluding Japan to Grow at 4.8% CAGR

Singapore, 2 February, 2016 – According to the new IDC Manufacturing Insights Spending Guide , manufacturing spending in the Asia/Pacific region excluding Japan (APeJ) will grow at 4.8% compound annual growth rate (CAGR) for the 2015-2019 period.

The perspective titled Asia/Pacific (Excluding Japan) Manufacturing IT Spending 2015–2019 Forecast Perspective published along with the pivot table analyses the market dynamics in specific countries. China is expected to undergo waves of automation and digitization due to inflation of wages and given its focus on making manufacturing world-class according to its visionary ‘Made in China 2025″ initiative. The shutdown of the automotive industry in Australia will have a negative impact on the IT spending in this sector. ‘Make in India’ and its associated policies is creating interest in supply chain management making it the top area of growth replacing ‘security’ due to the expected passing of Goods and Services Tax (GST) bill in 2016. Singapore is becoming a ‘connected society’ improving the day-to-day lives of citizens.

IDC provides other country highlights in the Manufacturing Spending Guide, namely:

• China will see an 8.5% year-on-year growth in software spending due to government initiatives such as Industry 4.0 and Internet Plus integrating IT with manufacturing. 46 pilot projects proposed by the ministry will focus on innovation to implement smart manufacturing.

• Australia will see a 5 year growth of 2.7% in manufacturing IT spending, slowed down primarily because of the auto industry shut down.

• Supply chain management will be the most growing area in Indian manufacturing with close to 14% CAGR between 2015 and 2019, in areas such as modern warehouses, improved logistic services and new software applications to operate them and integrate with the rest of the ecosystem.

IDC recommends that organizations should leverage upcoming trends in IT such as XaaS, usage-based models, strategic partnerships and connected enterprises to take a look at their IT spending patterns. These trends offer several benefits from cost reduction, agility, quick deployment, proven practices and additional capabilities. Software will grow the most at 7.5% CAGR between 2015 and 2019 as enterprises get comfortable with XaaS models. Hardware spend will be flat at less than 1% since companies have already invested on basic infrastructure for storage and computing.

“Technology spend in manufacturing continues to grow, however we see a shift as to where the spend is going. We are seeing companies take stock of existing investments to ensure they have delivered value. New spend is being focused towards operational efficiencies, such as factory of the future investment and new business models, such as product as a service”, said Dr. Christopher Holmes, Managing Director, IDC Insights, Asia Pacific.

“Legacy systems cannot be shut down in the near term while investment of money, time and effort is a must on the 3rd Platform and Innovation Accelerators making it a strategic decision making with buy-in from stakeholders across the enterprise”, adds Dr. Holmes.

The IDC Manufacturing Insights Spending Guide quantifies IT spending in manufacturing into three broad categories – hardware, software and services, across different enterprise IT applications, in 12 specific industries and in countries in APeJ region. The comprehensive spending guide will help decision makers from both end user organizations and IT vendors to understand where the industry is headed in their digitization journey in the next 5 years and to plan their investments accordingly.

About IDC Spending Guides

IDC’s Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information about IDC’s Spending Guides, please contact Rubal Sabharwal

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. To learn more about IDC, please visit Follow IDC on Twitter at @IDC.