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Slow Hong Kong business growth hampers IT budgets

Carol Ko (Computerworld HK) | Feb. 7, 2014
Hong Kong enterprises are on par with their regional counterparts in terms of their cautious business outlook for 2014, but available IT resources may not fully support such growth.

Hong Kong enterprises are on par with their regional counterparts in terms of their cautious business outlook for 2014, but available IT resources may not fully support such growth.

"Do more with less" will remain the central theme of this year. Key technology focus points will be: mobility, BI analytics and cloud computing.

These are the main findings from the "IT Spending and Priorities 2014 Study" conducted by Computerworld Hong Kong and Enterprise Innovation in December 2013.

The online study surveyed IT managers, executives and business leaders from various industries. The survey covers major Asian markets including Hong Kong, Macau, mainland China, Indonesia, India, Indonesia, Malaysia, the Philippines, Singapore, Sri Lanka and Australia.

Global economic growth is expected to remain sluggish this year, and Hong Kong enterprises anticipated mild business growth. The survey shows just 22% of Hong Kong IT leaders expect their business to expand in 2014 (a huge drop from 37% in 2013).

Regional peers share the same conservative outlook, with just 23% expecting growth. Regarding the business outlook, 50% of Hong Kong IT leaders expect to "consolidate with some growth plans" in 2014, in line with its regional peers (51%).
 

Flat budgets
Local IT leaders' lower business outlook this year dovetails with their low expectation for IT budget growth—just 26% expected an increase, compared to 42% of their regional peers expecting rising budgets. Such a gap has widened compared to last year, indicating Hong Kong is lagging behind the regional growth in IT spending 

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The majority of Hong Kong IT leaders (71%) expected their IT budgets to stay the same or decrease from last year, while the combined total was just 54% for the region as a whole.

CWHK's survey findings appear to match with Gartner's IT spending forecast. The researcher stated that in 2014 IT spending in Asia Pacific will reach US$767 billion, a 5.5% increase from 2013. This growth forecast has dropped from last year, when regional IT spending was expected to grow by 7.1%.

Retail and manufacturing
It's revealing to view IT budget expectations from the vertical perspective. Banking and finance as well as logistics and transportation are expected to suffer the most with shrinking IT resources in 2014 (26% and 18% respectively). But it's reassuring to know that these numbers actually dropped from last year (36% and 43% respectively) 

Thanks to the continuous influx of mainland Chinese shoppers, retail and manufacturing industries will enjoy the biggest IT budget increases this year (56%, compared to just 32% in 2013). More IT shops in the logistics and transportation sector will also celebrate increased IT budgets this year (45%, compared to just 29% in 2013).

 

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