IT Investment in Japan: Key Research Findings 2021
IT Market Size at Domestic Private Enterprises for FY2021 Expected to Rise by 2.8% from FY2020
Yano Research Institute (the President, Takashi Mizukoshi) carried out a survey on IT investment at domestic private enterprises for FY2021 and the future trends.
The market size of IT (including hardware, software, and services) at domestic private enterprises was estimated as 12,970 billion yen for FY2020, a rise by 0.6% on a year-on-year basis. Many SMEs, particularly medium-sized enterprises, cancelled or postponed IT investment due to the downturn in business performance against the backdrop of COVID situation. Nevertheless, the market size stayed at almost the same level as in the previous fiscal year, since big companies carried out IT investments mostly as planned, and the companies that became aware of the need for improving telework environment and promoting digital transformation as well as business innovation accelerated IT investments.
Digitalization Advanced at More than Half of Companies due to COVID-19 Crisis
In the questionnaire, companies were asked about some changes affected by the COVID-19 pandemic in their status of digitalization and 453 domestic private companies responded back. The respondents were asked to choose one option from “Significantly Advanced”, “Slightly Advanced”, “Unchanged”, “Slightly Decelerated”, and “Significantly Decelerated”. In the questionnaire, digitalization is defined as the attempts in general that streamlines manual operation by digital technology or creates new added value.
As a result, a total of 55.2% of the respondents answered that the efforts for digitalization have advanced (9.7% answered that the digitalization “Significantly Advanced” and 45.5% answered “Slightly Advanced”). It is assumed that the increase of telework and online business activities in the COVID-19 calamity has accelerated the utilization of digital technology at enterprises.
Meanwhile, 41.3% of the respondents said their digitalization status has not changed (“Unchanged”). There are two types of reason for this, i.e., the case in which digitalization has been ongoing from the pre-COVID-19 situations, and the case in which digitalization has not been promoted even after the outbreak of COVID-19.
The market size of IT (including hardware, software, and services) at domestic private enterprises in FY2021 generated 13,330 billion yen, up 2.8% from the preceding fiscal year. It is projected to rise by 2.3% on a year-on-year basis to attain 13,640 billion yen for FY2022, growing further by 1.8% to reach 13,880 billion yen for FY2023.
Against the background of the restart of IT investment projects that were postponed in FY2020, and of the acceleration of IT investments at companies that became aware of the necessity for digitalization and business innovation, the market of IT is projected to grow stably for FY2021. After FY2022, although the growth rate may slow down to some degree compared to FY2021, the market is projected to show stable expansion because of activization of digital transformation (DX), full-scale adoption of 5G (the fifth-generation mobile network), spread of AI and IoT due to progress in data utilization, and promotion of workstyle reform.
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