The tech industry will be 2% to 4% “faster growing than GDP”, IBM chairman and CEO Arvind Krishna said in a group interview, adding that he is “more optimistic than some of the economists” on the overall global economic outlook.
Nearly three-quarters of CEOs believe global economic growth will decline over the next 12 months, according to PwC’s survey, which polled about 4,400 CEOs across the world in October and November last year, that was announced here on Monday. The survey’s findings were the most pessimistic in over a decade.
However, Krishna said that the tech industry will be resilient in the global economic slowdown.
“Everyone is going to go forward for digital transformation because it’s the only way to scale a nation or a company without having a lot of labour cost,” he said.
“And that ties into the global demographics,” he added.
China’s population shrank last year for the first time in 60 years, and “even India is talking about getting to zero population growth by the middle or end of this decade”, Krishna pointed out. “This is a great set of opportunities. And technology can really help.”
However, he warned that there would be a “gap” in the growth within the tech industry.
He said that business-to-consumer services, which saw a rapid increase in demand during the spread of Covid-19 infection, will have “a little bit of correction” in demand. He stressed that the strong demand for business-to-business services, which are IBM’s domain, will continue.
Regarding tech investment trends by region, “this is the period for Indonesia, India, or certain countries in the Middle East”, Krishna pointed out.
Satya Nadella, chairman and chief executive of Microsoft, also told attendees at the World Economic Forum Wednesday that “there was rapid acceleration” of investment in tech during the pandemic, and the industry will go through a phase of “normalization of that demand.”
The tech industry must be “efficient” like the other industries, he said.
Microsoft, which has PC operating systems and a gaming division, is more susceptible to consumer spending than IBM.
Yet, Nadella said he is also “optimistic” that “digital technology, things like artificial intelligence, can help boost” the overall economy in the current sentiment.
As for the tech tension between Washington and Beijing, IBM’s Krishna said he is a “firm believer” that the “world is better served by nations having lots of trade, and by building to participate in a much larger global economy than by any kind of falling prey to geopolitics.”
“IBM has been invested in China for almost 30 years. And our hope is that we will remain invested for the next 30 years,” he said.