The shift towards hybrid work, which has become a permanent feature in the global work landscape, is driving organizations to invest in various technologies and services. A new forecast from the International Data Corporation (IDC) Worldwide: Future of Work - Spending Guide has revealed that organizations will spend nearly $1 billion on the Future of Work (FoW) in 2023, a significant increase of 18.8% from 2022.
"Remote and hybrid work models will be an embedded part of accepted work practices," said Holly Muscolino, group vice president, of Content Strategies and the Future of Work. "Organizations must make ongoing investments in digital technology to remain competitive and increase workforce productivity."
The IDC's FoW framework is designed to help organizations structure their work transformation strategies and initiatives, taking a holistic and integrated approach that encompasses three key pillars: Augmentation, Culture, and Space.
Space: Intelligent and Dynamic Work Environments
Space, which focuses on the physical workplace and its adaptation to support the hybrid workforce, is the largest of the three pillars, accounting for 60% of FoW spending in 2023. Investments in technology must enable collaboration, access to corporate resources, and support all types of workers, regardless of their location or status.
Augmentation: Embracing the New Digital Coworker
Augmentation, or enabling digital workers, will be the second largest pillar with over one-third of FoW spending in 2023. This includes investments in hardware and software such as AI, robotics, AR/VR, and process automation. Augmentation is set to experience the fastest growth in spending, with a compound annual growth rate of 23.1%.
Culture: Fostering Engaged and Empowered Workers
Culture, which is focused on worker engagement and digital skills alignment, will account for 5% of FoW spending in 2023. Most of this spending will go towards IT and business services, as organizations continue to innovate and remain agile.
Hardware and Software to See Largest Investment
From a technology perspective, the largest area of investment in 2023 will be hardware, with companies expected to purchase over $300 billion in endpoint devices, enterprise hardware, and infrastructure as a service. Software, including enterprise applications, security, and analytics, will be the second largest area of spending, with a compound annual growth rate of 21.7%. IT and business services in support of FoW efforts are expected to be more than $185 billion combined in 2023.
Investment in Future of Work to Exceed $1.5 Billion by 2026
The IDC Worldwide: Future of Work - Spending Guide provides valuable insights into the rapidly growing FoW market and its development over the next five years. The report assesses investment opportunity across 22 technology categories, 19 industries, and 9 geographic regions. The manufacturing and professional services industries are expected to control over 40% of FoW IT spending. The fastest growth in investment is expected in Asia/Pacific and China.
The IDC's Spending Guide Forecasts indicate a strong investment in Future of Work technologies, with organizations focusing on the physical workplace, embracing digital workers, and fostering engaged and empowered employees. The FoW market is expected to experience substantial growth over the next five years, with investment expected to exceed $1.5 billion by 2026.
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