Macroeconomic headwinds place a temporary damper on Belgium’s IT investments

According to the Belgian Association of CIOs & Digital Technology leaders (Beltug), which has over 2,000 members from 490+ organizations, economic uncertainties hinder Belgian IT investments.

This was the conclusion after Beltug surveyed 1,200 Belgian private and public business organizations about their IT investment sentiment during a time of high inflation and a tight labor market. While smaller Belgian-based businesses experience a limited impact, over 400 medium to large-sized organizations showed signs of current project postponement, while a smaller group is delaying the start of IT projects.

The most profound negative impact on IT projects, leading to delays, is the talent shortage felt by over three-quarters. Upskilling and reskilling initiatives are deployed as workarounds, while others invest in greater levels of automation or seek to engage with outsourcing/managed services providers. This aligns with what PAC uncovered in a recent conversation with TCS. In the Benelux region, large enterprises, which traditionally did not resort to these types of services, now have a greater appetite for outsourcing infrastructure and application-related services (e.g., managed security, application modernization, service desk, end-user services, etc.).  

In cybersecurity, Beltug claims that only 50% of those surveyed have an action plan in case of a cyber-related incident. This shows that Belgian private and public organizations must continue to invest in security and resilience – indeed, an opportunity for IT vendors and service providers with offerings in this space (e.g., Proximus, Orange Cyberdefense, NTT, Atos, etc.).

Beltug further uncovered that, among its sampled respondents, over a quarter already use Internet of Things (IoT) technology. Interest in Metaverse, blockchain, and virtual reality (e.g., goggles) remains low. The same can be said for the use of artificial intelligence, with only 11% of organizations sampled leveraging this technology.  

Despite a more negative sentiment due to macroeconomic headwinds, PAC sees the Belgium IT services market grow by 3.5% CAGR between 2023/27. For example, current PAC estimates in application-related services show sustained growth (4.5% in 2023/2024), particularly regarding SaaS and industry-specific applications, which show strong double-digit growth. To check out how PAC sees growth in other segments (outsourcing, infrastructure-related services, software and cloud platforms, etc.), please consult: https://www.sitsi.com/software-it-services-market-figures-belgium-18