APAC organisations will spend over $US375 billion on digital transformation this year with a five year CAGR of 17.4 per cent to 2022, according to new research from International Data Corporation (IDC).

China is driving most of the region’s spend with heavy investment in manufacturing, according to the report IDC Worldwide Semiannual Digital Transformation Spending Guide.

The market advisory firm found the bulk of spending will be on hardware and services (83.6 per cent) and the top digital transformation technology use cases, in terms of spending, are autonomic operations ($25.5 billion) and robotic manufacturing ($25.2 billion).

In the APAC region the two industries spending the most on digital transformation defined in the report as “technologies and services that enable the digital transformation of business practices, products, and organisations” are discrete manufacturing and process manufacturing, investing $83.9 billion and $46.8 billion respectively.

China rising

China’s own spend on those industries $55.3 billion on discrete manufacturing and $30.6 billion on process manufacturing accounts for over 65 per cent of the total regional figures. China will also spend $20.9 billion on digital transformation technology for state and local government.

Across all industries China delivers more than 60 per cent of the total APAC spend. The IDC report does not include Japan.

The APAC region’s heavy investment in manufacturing comes from a desire to make processes “smarter”, according to the report. Within manufacturing the top spending priority this year is “smart manufacturing” followed by “digital supply chain optimisation”.

According to the report, APAC organisations will spend over $50 billion this year on autonomic operations and robotic manufacturing to develop automated technology capable of self management.

After manufacturing, Government, transportation, and utilities are the next largest spending APAC industries.

Daniel-Zoe Jimenez, AVP – digital transformation, future enterprise and SMB, at IDC Asia/Pacific, said the region’s organisations are rethinking digital transformation with a more mature focus on the future of work.

“The pace of digital transformation has accelerated in the Asia/Pacific region, and this will continue to drive significant investments in technologies in the next few years – from hardware and services to applications,” Jimenez said.

“Organisations are becoming more mature and they are reshaping their digital vision and tactics to achieve measurable results.”

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