According to global analyst firm Forrester "without a doubt", the COVID-19 pandemic will hit China’s GDP hard in the first quarter of 2020 as the virus spreads throughout a “highly connected world”.
“As such Forrester has adjusted our initial forecast of China’s tech spending for 2020. As China’s government is undertaking massive efforts to contain the coronavirus, growth will likely bounce back in the second half of the year if the outbreak doesn’t worsen,” Forrester says.
“Tech spending will drop by 2% in Q1, but as the government and enterprises accelerate the adoption of digital technologies to improve adaptiveness, the full-year growth rate will return to 4.5%, slightly lower than our earlier forecast of a 6.6% growth in 2020.
“In a more pessimistic scenario where the situation doesn’t improve, Forrester predicts that the China tech market could potentially decline by 6% in Q1 (-2% in H1) with an aggregate growth of only 2.3% for the full year.
“Similarly, we are also revising our global tech market forecast, where the odds of a tech market decline has increased significantly,” warns Forrester.
In addition, Forrester says that there are also several lessons that organisations around the world can learn from how the coronavirus has impacted China’s tech market.
According to Forrester, the global epidemic is symptomatic of the connectedness of today’s world and the pace at which things spread and change in it.
“Companies, supply chains, and ecosystems are inextricably connected, and any changes in customer needs, technology, and business trends in one corner of this global ecosystem will ripple across the globe,” says Forrester.
“While China plays a key role in the global supply chain, the global ecosystem is also critical to China’s business growth. China still relies upon foreign offerings in critical technology areas like chipsets, robot sensors, and industrial design software.
“To address the challenges in the global business ecosystem and sustain business growth, organisations worldwide must proactively accelerate loops between technology and humans and adapt their enterprises to rapidly exploit opportunities.
“CIOs must help companies improve their adaptiveness in terms of market, technology, and organization. Emerging technologies and platforms will play a critical role on this journey.”
- Here are some steps that Forrester says businesses can take to transform their organisaions into adaptive enterprises (more Chinese examples detailed in the report):
- Start with market adaptiveness
- Invest in emerging and platform technologies to enhance tech adaptiveness
- Use collaboration, automation and motivation to improve organisational adaptiveness