Technology spending across the Asia Pacific (APAC) region is forecast to reach US$876 billion in three years’ time, with software making up close to a third of this spend due to a demand for AI. This is according to research firm Forrester’s Asia Pacific Tech Market Forecast, 2023 To 2027 report, which claimed that software spending will continue to rapidly grow, followed by IT services, communications equipment and computer equipment. The share of software purchases in particular is predicted to rise from 24.6 per cent in 2024 up to 30 per cent of total tech spend in 2027, outpacing other spending categories, due to demand for AI and AI-augmented enterprise software and services. "While challenges such as regulatory environments, global economic conditions, and talent shortages in the region present hurdles, overall, the APAC market is well-positioned for tech growth," said Leslie Joseph, Forrester principal analyst. "As the region continues to grow in importance in the tech world, new opportunities offered by the explosion of AI and the increased demand for cloud can be significant revenue and growth drivers for firms." Australia’s tech spending growth for 2024 is expected to increase 4 per cent, reaching A$73.5 billion, with digital growth “heavily influenced” by sustainability efforts and the local services industry. Meanwhile, Singapore is expected to see 5.6 per cent growth in its tech spending, rising to S$24.2 billion, and claims it is “Asia’s most attractive startup destination”. As for other Southeast Asian countries – Indonesia, Malaysia, Philippines, Thailand, the Taiwan region and Vietnam – collective growth this year is expected to increase by 8.1 per cent, rising to US$74 billion. According to Forrester, an increase in digital consumption via large Millennial and Generation Z populations, favourable policy environments and investments from tech giants is expected to accelerate digital innovation. Forrester's APAC tech spend forecast comes months after it told IT leaders in April to ignore pressure to buy first generation AI PCs in 2024, but to start preparing for 2025.