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Tuesday, 25 July 2006 17:44

Massive chasm in public sector IT spending in Asia

Information Technology spending in the public sector is growing strongly across Asia but there is still a wide gulf between the more mature countries in the region, such as Australia, New Zealand and Singapore, and the emerging countries.

Singapore based IT market researcher Springboard Research, which released the study, found that countries such as New Zealand and Australia are spending close to US$200 per capita on IT in the Public Sector, while countries such as India and Indonesia are spending as little as US$1 per capita.

Country                    Per Capita Public Sector IT Spending
New Zealand                $198.78
Australia                  $193.82
Singapore                  $152.89
Hong Kong                  $67.22
Korea                      $52.96
Taiwan                     $45.22
Malaysia                   $21.92
Thailand                   $7.41
China                      $3.67
Philippines                $2.94
India                      $1.29
Indonesia                  $1.10

“The degree of difference in IT spending per capita in the Public Sector across the region is staggering” commented Dane Anderson, Research Vice President at Springboard Research.  “While we have seen significant growth in technology spending in the Public Sector, in many of the developing countries the level of spending is still at extremely low levels on a per-capita basis.”

Springboard estimates that 2005 IT expenditure in the Public Sector in Asia (excluding Japan) was US$17.3 Billion and the market is expected to grow at a compound annual growth rate (CAGR) of 9.5% with Public Sector IT spending being close to US$25 billion by 2009.  The largest sub-vertical within the Public Sector was the Security & Defence segment, consisting of Defence, Intelligence, Border Control/Immigration, and Public Safety.  This sub-vertical accounted for close to 22% of the Public Sector IT spending across the region.

Jonathan Silber, Senior Market Analyst- Public Sector for Springboard Research, added, “We observed that three key tiers exist in per-capita IT Spending in the Asian Public Sector, with the top two tiers forecasted to post relatively stable growth rates between 4-5%.  Surprisingly, we expect the top tier countries like New Zealand, Australia, and Singapore to grow slightly faster than the tier two countries like Hong Kong, Taiwan, and Korea – but we anticipate the highest growth will come from the developing countries like India, China, the Philippines, Indonesia, and Thailand and will post annual growth rates between 11-19%.” 

Springboard expects the fastest growing countries to be the emerging twin towers of the region - India and China, with India’s Public Sector IT expenditure to grow at a CAGR of 19.6% and China’s growth to be 14.6%.

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Stan Beer co-founded iTWire in 2005. With 35 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.

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