Global spending on information technology (IT) surged by 8 per cent to US$1.5 trillion (Dh5.51tn) last year, with the UAE recording 15 per cent year-on-year growth.
An unexpected growth in IT spending follows a period of stagnation. It is being interpreted by analysts as an indication that businesses have regained enough confidence to start reinvesting in their futures.
For countries such as the UAE, the growth offers small-to-medium-sized IT companies a chance to resume the kind of revenue increase enjoyed before the global financial crisis struck the sector.
According to the analyst IDC, global spending on IT experienced its fastest rate of growth since 2007 last year. Including telecommunications services, the overall information and communications technology (ICT) market grew by 6 per cent to almost $3tn last year. Much of the growth was driven by non-western economies such as the Middle East.
"The market in the UAE bounced back from the 2009 recession to record 15 per cent growth last year and is expected to post almost 17 per cent growth in 2011," says the IDC analyst Stephen Minton. "Strongest growth last year was in outsourcing services, smartphones, disk storage and midrange-volume servers."
The rapid growth of the IT market in the UAE will present significant commercial opportunities for jobs growth. IT outsourcing is already a major area of work creation and is predicted to expand rapidly over the next few years.
Mr Minton believes a combination of factors is responsible for this sudden resurgence. These include a return to economic stability in Dubai after debt restructuring, a perception that the banking sector has stabilised, higher oil prices and the growing need for greater storage capacity for digital information. However, he added that IDC's predictions for the UAE were made before the recent political events in Egypt and elsewhere and are based on an assumption that the economy will post solid GDP growth this year.
Outsourcing services, also referred to by analysts as "operations management", is predicted to grow to almost 21 per cent in the UAE this year. By contrast, the UAE's packaged software market is predicted to grow by only 11 per cent. But the outlook for IT growth across the region is predicted to continue to grow, with operations management in the UAE continuing to mushroom by another 21.6 per cent next year, rising to 22.3 per cent in 2013.
Analysts are now identifying solid IT growth across the world's developing regions. According to Forrester, emerging markets will grow fastest. Brazil, Russia, India and China will enjoy some of the fastest growth in IT purchases this year at 11 per cent, with other emerging markets such as South Africa, Saudi Arabia, Indonesia, Chile and Mexico registering similarly strong growth. It will be nearly as strong in Canada, Australia, Scandinavia, the UK, the Netherlands, Switzerland, Singapore, the US, and Israel, which collectively represent more than half the global IT market.
But weaker growth is in prospect for developed countries such as Japan, Germany, France, Italy and Spain.
After solid growth last year, both the global and US markets for ICT products and services will grow at a slightly slower rate of 7.5 per cent in the US and 7.1 per cent globally, or between two and three times the rate of the overall economy.
"The slightly slower growth outlook for 2011 is due to economic worries in Europe, uncertainties about the strength of economic recovery in the US, and the potential for slowing growth in China," says Christopher Mines, an analyst at Forrester.
Forrester believes the real driver for IT growth is the increased capacity of IT to deliver quantifiable business advantages to users.
"The global technology industry is in a multiyear up-cycle of industry innovation and growth, during which tech investment grows faster than overall economic growth," says Mr Mines.
"The information economy is here and business intelligence is hotter than ever. Firms compete based on insights from analytics, and next-generation business intelligence will pave the way for a significant increase in business intelligence's impact on the enterprise.".
While IT growth is considered by global analysts as an indication the world is pulling out of the recession, it will not be the same world. The fact that IT growth is set to be the fastest in developing regions such as the UAE is evidence the country is set to use technology to try to leapfrog western economies.
While the IT sector may be smaller than more mature economies, buying the latest technology will enable businesses to gain market share from less nimble foreign competitors.