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Amid the global effort to make a post-Covid recovery, 2022 economic statistics failed to seem groundbreaking. Stepping into a new year, the world anticipates even more negative development. In this rather unfavorable climate, what will the IT industry in 2023 look like?
The stormy outlook of 2023
The year 2022 has witnessed a major slowdown in global economic growth. In the upcoming year, this downward trend, unfortunately, is predicted to continue – the World Bank even notes a possible tip to recession.
To be more specific, the growth of the global economy is expected to reach only 1.7% in 2023 and 2.7% in 2024. The dramatic downturn will be widespread for both advanced economies and developing ones.
Similarly, the Globe Bank anticipates a prolonged period of sluggish growth and increased inflation.
IT industry in 2023: Possible challenges and opportunities
After Covid-19, the IT sector will likely face considerable challenges in recruiting and retaining skilled employees, which certainly will impede their development plans. However, the IT industry in 2023 will also see steadily increasing IT investments, which implies possible chances for growth.
Recruitment challenges
The IT industry in 2023 will also be plagued with rather undesirable developments. Hiring and keeping skilled employees will be more difficult and expensive as the IT labor market becomes highly competitive.
Decreased hiring
According to the forecast of The Financial Express, in the IT industry in 2023, hiring is likely to rise by only 10%, which is half as high as the figure seen in 2022. Most of these opportunities will likely go to freshers.
Competing for skilled personnel
A significant inflation-driven rise in living costs calls for higher wages. In addition, a rapidly advancing sector also demands a better-educated workforce with more complex skill sets. Therefore, for companies in the IT industry in 2023, base pay, compensation, and benefits need to be raised to attract and retain talent.
Space for growth
However, not all chances are lost, as 2023 IT expenditures are expected to grow. To be more specific, Gartner predicts that global IT expenditures will climb by 5.5% to reach $4.5 trillion. Although the growth pace is indeed slow compared to the pre-Covid era, the market manages to maintain a favorable progression.
John-David Lovelock, distinguished research vice president at Gartner, considered responding to disruptions the key reason for increased IT investments. According to Lovelock, multiple economic fluctuations caused by wars, climate change, inflation, etc, are urging CIOs to boost investments in IT solutions. In a rather hard-to-predict era with many looming challenges, they acknowledge the importance of an agile approach to business, which allows the diversification of supply chains and new income streams. This trend implies a huge advantage to the IT industry in 2023.
Notable trends for the IT industry in 2023
In this article, GEM enlist two outstanding technologies that will become vital parts of 2023 technology outlooks: 3D printing & Digital Twins and AI.
Connecting the digital and physical world with 3D printing and Digital Twins
In 2023, the bridge between the digital and physical worlds will be strengthened as digital twin and 3D printing becomes more commonly adopted.
Digital twins are virtual replicates of real products, operations, or processes. The purpose of creating these twins is to perform safe and accurate tests in a digital environment, as real-life experiments can be highly risky and expensive. The IT industry in 2023 can benefit greatly from this trend, as it is used widely across sectors, from manufacturing to healthcare.
After the virtual testing, engineers and designers can create new components or machine parts using 3D printing technology – this practice is also known as additive manufacturing. One noteworthy development is how 3D printing is no longer limited to metals and plastic. In the future, there will be a greater diversity of materials being used, including ceramics and polymers. 3D printing will also be more application-specific. 3D printers can now modify several characteristics of materials, such as tensile strength and ductility, by adjusting parameters in the printing process.
Explore how Digital twins benefit manufacturers in Warehouse Management
Driving automation with Artificial Intelligence
Artificial Intelligence (AI) has been listed as one of the trends of the IT industry in 2023 that will continue to shape our lives in 2023, according to both CNN and Forbes.
Predictions show that the business world will push to leverage intelligent automation – which is largely driven and enabled by AI technologies. Intelligent automation uses AI-enabled analytics and solutions to handle data-driven tasks with little human intervention.
This is a huge step forward for AI adoption since the current use of AI mostly focuses on fulfilling repetitive and mundane tasks. In the coming time, businesses can significantly improve efficiency by streamlining processes and decision-making.
Learn more about how AI empowers the workforce and drives greater efficiency.
Closing thoughts
Predictions for the global economy remain gloomy, so concerns about the growth of the IT industry in 2023 are apparently valid. However, it is noteworthy that businesses are highly motivated to adopt innovative digital solutions to address their needs. Therefore, even in an economy that is slowing down, IT service providers can still seek significant business opportunities.
GEM Corporation is a leading IT service provider based in Hanoi, Vietnam. We stand out in the industry thanks to a large team of savvy IT talents, an adaptive tech stack, and, most importantly, a diverse portfolio of successful digital projects.
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