Fuelled by an unexpectedly rapid economic recovery in the US, the technology sector in the second half of 2002 is about to turn around faster than previously predicted, according to a recent report.
Forrester Research said it had nearly doubled its projection for IT spending growth this year, from 2.2 per cent growth, to 3.9 per cent in the second half of 2002.
Driven by pent-up demand, corporate IT spending will help push the tech sector ahead by 10.4 per cent this year, up from 9.7 per cent.
And by the last half of 2003, new technologies like web services and internet-connected consumer devices will reinvigorate the entire technology sector, Forrester said.
The growth rate is expected to reach 12.5 per cent in 2004, up from 11.8 per cent.
Bruce Temkin, Forrester analyst and author of the report Tech Recovery Update: Coming Off the Bottom, said innovation will drive the recovery.
"Given the US economy's unexpectedly rapid turnaround, and its continued bolstering by low interest rates and the new congressional stimulus package, we've updated our model with a most optimistic set of growth assumptions," Temkin said.
New standards like XML and SOAP will lower the costs of system-to-system connectivity dramatically, he said. Broadband will reinvent consumer electronics, wireless sensors will reconnect everything, and ever-cheaper integrated circuits will drive internet connections into everyday devices by 2005.
The study also found consumers boosted their online purchases by 12 per cent in 2001, while the average company bought 9.5 per cent of materials on the web in the fourth quarter of 2001, up from 7.1 per cent in the third quarter.
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