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Thailand’s Increased IT Spending Driven by Excellent Digital Outcomes in 2021

Digital Economy and Society Minister Chaiyawut said that digital technology has become an important part of daily life and the digital economy is expanding. There are many unexpected development opportunities in digital technology and businesses and consumers are accelerating transformation initiatives. Everything is more connected to the world and cross border / globalised services are no longer geographically restricted. Minister Chaiyawut said new trends are driving change in a more digital world underpinned by technology – surveillance, tracking and storage.

To move with the flow and maximise Thailand’s economic development with digital technology, the government has given priority to 5 G as it sees opportunities and potential. He reiterated the government’s commitment to leverage 5G for economic development and to increase the competitiveness on the world stage for Thailand. At present, the Ministry of Digital has accelerated the push to pilot the use of 5G technology in a total of nine projects spread widely across all regions of the country in various sectors including agriculture, health, industry, education, transportation and Smart City.

Government spending in Thailand increased to THB 417833 million in the third quarter of 2021 from THB 407010 million in the second quarter of 2021 showing an upward trend. Further, Thailand’s overall IT spending is expected to hit THB 819 billion in 2021, up 7.4% year-on-year.

Thailand’s IT spending is expected to grow 6.4% year-on-year to THB871 billion in 2022 with strong growth in enterprise software, driven by continued hybrid work and remote services, according to research by a global research firm. The projected IT spending growth for next year, however, is still higher than the global growth of 5.5% with US$4.47 trillion in IT spending expected in 2022. To put it in context, worldwide IT spending in 2021 is expected to reach $4.24 trillion, up 9.5% year-on-year.

Enterprise software is projected to see the highest growth of 14.8% to THB61.3 billion in 2022, followed by IT services with a growth of 9.8% to 85.4 billion and devices with a growth of 9% to 220 billion. Communication service is expected to see the lowest growth of 3.8% next year but would maintain the largest IT spending segment in the country at THB483 billion – about half of the total market.

Spending growth on devices, primarily PCs and tablets, reached a peak of 21.7% in 2021, buoyed by people working and studying from home. Individuals and enterprises upgraded their devices or invested in multiple devices for remote or hybrid work. Spending on data centre systems is projected to rise 4.6% to THB21.6 billion.

An industry expert noted that enterprises will increasingly build new technologies and software, rather than buy and implement them, leading to overall slower spending levels in 2022 compared to 2021. However, digital tech initiatives remain a top strategic business priority for companies as they continue to reinvent the future of work, focusing spending on making their infrastructure bulletproof and accommodating increasingly complex hybrid work for employees going into 2022.

Other reports note that the vast majority of businesses have been propelled by digital disruption with most executives globally admitting its transformative impact to an extent. Furthermore, the implementation rate of advanced technologies, except robotics, and basic technologies has all increased with the onset of the COVID-19 pandemic. This indicates a digital adoption of all technologies across business sectors at a rapid pace during the COVID-19 period. It is therefore crucial and intriguing to identify digital disruption perspectives and approaches to digital implementation across companies in Thailand.

The higher digital transformation rate coupled with and an immense and unforeseeable impact from the COVID-19 pandemic across all businesses are evident. Businesses are and should be more active in the digital transformation movement and the digital environment in the market, given the persistent and increasing VUCA world. For the most part, a majority of the companies have entered a digital adopter stage post-COVID-19 compared to the digital evaluator stage that existed pre-pandemic. As expected and borne out by performance in a post-pandemic landscape, financial services, life sciences and healthcare have seen astronomical growth, propelled by accelerated digital initiatives.

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