Future of Work (FoW) spending will be nearly $656 billion this year, an increase of 17% over 2020, according to a new forecast from the IDC Worldwide Future of Work Spending Guide.
Holly Muscolino, IDC research VP for content strategies and FoW, said the ongoing health crisis has highlighted that traditional work models do not provide the agility, scalability, and resilience required by the future enterprise.
“To drive growth and competitive differentiation, organisations will invest in technologies and services that power automation, human-machine collaboration, new organisational structures and leadership styles, dynamic learning opportunities, a reimagined workplace, and a digital work environment that is not bounded by time or physical place,” said Muscolino.
According to the guide, the largest area of investment in 2021 will be hardware, where companies are expected to purchase $228 billion in endpoint devices, enterprise hardware, infrastructure as a service (IaaS), and robotics and drones.
Services, including business, IT, and connectivity services, will be the second-largest area of spending at more than $123 billion.
Software will see the fastest spending growth with a CAGR of 21% over the 2020-2024 forecast period. This includes investments in enterprise applications, content and collaboration, analytics and artificial intelligence, human resources applications, security, and software development and deployment.
“Seeking automated decision support and virtual collaborative approaches, discrete and process manufacturing — the two largest spenders on FoW technology over the forecast period — are investing in key use cases like collaborative robotics, operational performance management, and 3D and digital product design and review for improved cost control and higher process efficiency,” said Eileen Smith, IDC’s program VP for Customer Insights and Analysis.
Together, discrete and process manufacturing will account for just over one-third of all FoW spending this year. Professional services, retail, and banking will be the next three industries in terms of FoW spend in 2021.
The construction industry will see the fastest growth in FoW spending over the forecast period with a five-year CAGR of 24%. Media and retail will follow closely with CAGRs of 20% and 19%, respectively.
The FoW use cases that will benefit from the most spending in 2021 include collaborative robotics, operational performance management, and automated customer management.
The use cases that are expected to see the fastest spending growth over the 2020-2024 forecast period are adaptive skill development, interconnected collaborative workspaces, and advanced project management.
