Global digital spending increased in 2023 despite economic headwinds

Company expenditure on digital technology has been on an upswing for the last two years, with a significant increase in sectors such as energy and utilities, high-tech, retail, telecom, and media. For the year 2023, a majority of companies have witnessed 20% of their technology budgets towards digital advancement, a joint report by Nasscom and Avasant has shown. 

Nearly 90% of these companies also plan to boost investment in technology areas like artificial intelligence, machine learning, big data analytics, cloud computing, and cybersecurity. Investment hotspots over the next 12 to 18 months are expected to include cybersecurity, AI, Generative AI, networking technology, and automation. By the first half of 2025, the focus is anticipated to move more towards cybersecurity, supported by rapid advancement in generative AI.

Generative AI on its own has emerged the hottest technology area, attracting investment from 70% of global enterprises. This has resulted in sectors like banking, financial services and insurance (BFSI), high-tech, discrete manufacturing, telecom, media, and entertainment, as well as energy, utilities, and alternatives expanding their digital services contracts. To be sure, Indian IT services major TCS, during its quarterly earnings result declaration on Friday said that it has a $900 million pipeline for AI and generative AI. Global consultancy and engineering services company Accenture in February announced that as of its first quarter, has a pipeline of $450 million worth of generative AI projects and PoCs. 

Nasscom-Avasant predicts that generative AI is expected to receive higher investment in 2024 with 73% of firms that already allocated funds for the technology further ramping up spending especially towards talent development. The top five Gen AI-related roles in high demand for 2024 are anticipated to centre on model fine-tuning and application, comprising positions such as Gen AI developers, prompt engineers, AI model curators, and AI content creators, in addition to the pivotal role of chief AI officer.

“A strategic framework for businesses seeking to hasten digital adoption in an era where artificial intelligence and skills are paramount. Prioritising the development of digital talent within organisations is essential to ensure the workforce can effectively leverage AI and other advanced technologies. Moreover, focusing on data mastery to extract actionable insights and informed decision-making is critical,” said Sangeeta Gupta, Sr. Vice President and Chief Strategy Officer at Nasscom.