The economy is definitely changing around us. We had a long run of low interest rates which, through what amounted to basically “free money”, created an aura of stability. However, when that run came to an end we discovered some pent up economic strife, mostly in the form of inflation. Inflation is brutal to the economy, as is the now (over?)reaction to the end of cheap money. The terms “recession” and “macroeconomic conditions’’ are being tossed around with varying levels of severity.

With all the inflation, rising interest rates, various doom and gloom prognostications, one would think that technology budgets would be going down, dropping like a rock. But they aren’t. In fact, they’re going up.

“The 2023 IT Budgets Survey, conducted by IDG Research Services, found that 80% of respondents plan to increase their technology spending by at least 3% in 2023, and 43% plan to increase spending by 10% or more. The survey also found that 86% of respondents plan to increase employee compensation in 2023, despite recession fears.” - CIO.com

“Despite turbulent economic times, IT budgets are staying flat or growing, with investment priorities focused on increasing operational efficiency and profitability…” - VMware

“Investing in digital technology remained a clear top priority, with 80% of respondents planning to increase their technology spend by at least 3%, and 43% planning to increase technology spend by 10% or more. Beyond technology…” - Gartner

“Worldwide IT spending is projected to total $4.6 trillion in 2023, an increase of 5.5% from 2022, according to the latest forecast by Gartner, Inc. Despite continued global economic turbulence, all regions worldwide are projected to have positive IT spending growth in 2023.” “Macroeconomic headwinds are not slowing digital transformation,” said John-David Lovelock, Distinguished VP Analyst at Gartner. “IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023. Prioritization will be critical as CIOs look to optimize spend while using digital technology to transform the company’s value proposition, revenue and client interactions.”” - Gartner

“Although budgets for IT, for the most part, now are flat, there is still capacity to increase spending because of their inability or unwillingness to spend it last year. Thus, growth is now present in the market.” - Forbes

“About half of the North American IT professionals polled expect technology budgets to increase in 2023 compared with last year. Less than 10% of those polled in North America and worldwide expect budgets to shrink this year.” - TechTarget

Notes of interest from these articles:

• Organizations are seeking to “transform the company’s value proposition, revenue and client interactions”
• Focus on “increasing operational efficiency and profitability” (surprisingly we aren’t always trying to do this)
• 80% of respondents plan to increase their technology spending by at least 3% in 2023
• 43% plan to increase spending by 10% or more
• 86% of respondents plan to increase employee compensation in 2023
• Only 10% of respondents expect budgets to shrink

The economy’s stomach is doing backflips. We’re not used to these guttural gymnastics, at least not over the last 15, 20 years. The reality is that the way we approach uncertain economic times, at least in business, is to invest in technology. By doing so, presumably we’re hoping to find operational efficiency and savings, as well as the ability to keep the software running the business humming along.