Digital spending to approach $1.2T by 2022, study finds
Zinnov, a management consulting firm, has released its annual rankings in Zinnov Zones for Digital Services 2017.
The proprietary ranking system aims to help digital transformation stakeholders and decision-makers identify the top service providers in the digital domain, a press release said.
The study estimates that enterprises worldwide will spend more than $470 billion on digital services in 2017, and predicts that digital spending will increase at a compound annual growth rate of more than 20 percent to reach as much as $1.2 trillion by 2022.
Enterprises in banking, financial services and insurance, retail, manufacturing, hi-tech and telecom continue to be the top spenders jointly contributing more than 60 percent of the total global digital spending. Today, more than 5.5 million people are employed in job roles as a result of digital investments by enterprises.
Startup investments in technologies such as the Internet of Things, artificial intelligence, blockchain and robotic automation have increased significantly in the last 24 months, with an estimated $25 billion in funding overall. This is in addition to more than $30 billion invested in acquisitions focused on AI and IOT competencies.
The spend on externally sourced digital services is estimated to be $31 billion in 2017, according to Zinnov, and is expected to surpass $75 billion over the next five years.
"Digital is coming out of being a hype to becoming a real spend area in 2017," Praveen Bhadada, partner and practice head for enterprise digital transformation at Zinnov, said in the release. "Service providers and enterprises are jointly creating digital technology solutions, exploring newer business models, investing in centers of excellence, and building a robust external ecosystem of startups and partners. Accordingly, deal sizes are slowly starting to increase with over 15 percent of digital deals exceeding $3 million in contract value."