Despite economic turmoil, global tech spend grows at its third fastest rate in over 15 years, finds world’s largest digital leadership survey
- But investment slows in emerging tech like AI and Big Data – threatening innovation
- Fears over cyber warfare jump dramatically as attacks begin to rise
- Over half of large organisations hit by a cyber attack
- Shortage of tech talent at all time high as pay demands become unsustainable
- Women in tech moving in a positive direction, helped by hybrid working
Despite 87% of digital leaders expecting an economic downturn, global tech spend this year is set to grow at its third fastest rate in over 15 years, as over half (52%) of digital leaders expect their technology budget to rise, and only 12% expect their budget to fall, finds the world’s largest and longest running survey of senior technology decision makers.
But the Nash Squared Digital Leadership Report, in collaboration with CIONET found investment has slowed in emerging tech like AI and Big Data, threatening opportunities to innovate through global economic instability. Although investment remains strong in cloud (63% reporting large-scale usage), companies are cutting back their investment in all the other technologies (Big Data, AI/ML and RPA) that are key to innovation and to gaining a competitive advantage.
Over half of large organisations hit by a cyber attack
Amidst the huge investment in the cloud, over a third (41%) of digital leaders are reporting that the cloud is creating security headaches due to the complexities it can create, especially for large distributed organisations. Over half (52%) of the largest organisations (total IT budget >$250m), report a major cyber-attack in the last two years. Meanwhile, global unrest and a growing awareness of the politicisation around cyber warfare has led to over a third of digital leaders (40%) fearing an attack from foreign powers – shooting up from just 12% in 2018.
The report also found:
- Shortage of cyber talent continues to be a significant issue for digital leaders – Cyber skills are the second most sought after technology skill in the world. This shortage and the increasing cyber threat has left only a third (29%) of digital leaders feeling confident they have all reasonable risks covered.
- The war for talent, and keeping pay demands reasonable, emerges as a big challenge – 70% of digital leaders state that a skills shortage prevents them from keeping up with the pace of change; the largest ever recorded. 62% think that organisations will never have enough technology staff and a similar number (60%) feel that the rising cost of living has made salary demands unsustainable.
- Government policies aren’t working on tech skills – A staggering 74% of digital leaders feel that their government’s policies are completely ineffective at tackling the skills shortage.
- Robots, a way to plug the gap in the tech talent market – On average, digital leaders plan to use digital labour to automate around 1 in 6 (16%) of their workforce over the next five years.
- Hybrid/Remote working boosts women in tech and access to global talent – Hybrid working is now commonplace in tech, with 2 to 3 days a week in the office the average requirement. This is starting to help have a positive impact on the number of women in the global tech sector: female leaders are up to 14% globally, almost a quarter (23%) of the tech team is now female, and 28% of new hires in the last two years have been women. The pipeline is slowly but surely improving. The report also found that a quarter (26%) of digital leaders say that remote working has enabled them to start recruiting talent from overseas.
Bev White, CEO of Nash Squared said:
“Economic headwinds are gathering and indicators are turning negative – but despite or even because of this, businesses know that investment in technology remains crucial. Both to maximise the efficiency of what they already have and to become more agile and responsive in highly unpredictable conditions, technology is the key enabler. But while technology investment intentions stand at their third highest level in over 15 years, nevertheless there are signs that some businesses are reining back on investment in areas like AI and Big Data. The reasons for this are understandable, but organisations should be careful not to cut back too deeply – they run the risk of falling too far off the pace to catch up again, leaving a long-lasting dent to their competitive positioning.
Meanwhile, another area that truly demands ongoing investment is cyber security. The threat environment is highly charged, and the rise in concerns about foreign power activity is striking. The world has become a more dangerous place in 2022. Businesses must take robust defensive steps accordingly.”
Bev White, CEO – Nash Squared
With investment intentions remaining high and 58% of organisations expecting to increase their technology headcount in 2023 against a backdrop of widespread skills shortages, Bev White, CEO of Nash Squared, added:
“Businesses run on people – but the technology sector simply can’t find enough of them. While the skills shortages afflicting the sector are nothing new, it’s a concern that they’re worsening rather than getting better. However, what we see in our research is that organisations are taking innovative steps to ease the challenges – redesigning their employee offers to attract talent and, increasingly, looking beyond their own borders to access bright minds internationally, working remotely. They’ve also been increasing their efforts to attract more women into tech. I am heartened to see progress here: the industry is inching towards the better gender balance it so badly needs.”
Bev White, CEO – Nash Squared
Sustainability needs a reboot
Sustainability in tech was expected to play a greater role this year, but little has changed. A quarter of digital leaders (23%) think sustainability has only a negligible or no part to play in 2022, and only a similar number (22%) are using technology to measure their carbon footprint to any great extent. The report asks whether digital leaders have their heads firmly in the sand – or is the board not focusing them on this? Does the move to the cloud mean that organisations are viewing energy usage in running tech as somebody else’s (the cloud provider’s) problem?
Realising the potential of data
One of the other challenges highlighted by the report is realising the potential from data. Although almost two-thirds (64%) of digital leaders think that big data and analytics will be in the top two technologies to deliver competitive advantage in the next year, only a fifth (21%) feel that they are ’very’ or ‘extremely’ effective at using data insights to generate more revenue. Both figures are down compared to last year’s report, suggesting that ‘Big Data’ is getting bigger in all senses of the word, including its complexity. Another challenge is getting the right skills, with 43% of digital leaders hampered by a skills shortage in this area.
Making remote and hybrid working work
Remote and hybrid working models rapidly deployed during the pandemic are here to stay, and although a much-improved work/life balance for the tech team is the biggest gain from hybrid working (64% of digital leaders reporting an improvement), it seems that the good news story around hybrid working has become more complicated:
- Productivity down – While more than four in ten report an increase in productivity from hybrid working, this is in decline from last year’s results where half of digital leaders saw a boost.
- Mental wellness rises – Already considered to have been made worse by hybrid working, mental wellness remains an issue, but digital leaders report that it has marginally improved compared to last year.
Bev White, CEO of Nash Squared concluded:
“Amidst so much change, it will inevitably take time for organisations to find the optimal model for their people proposition and talent strategies. Remote and hybrid working are delivering some real benefits but there are signs that these may be moderating as time passes. The mental wellbeing challenge also remains real and is very concerning. This all means that employers must continue to really think hard about their working models, to find the right balance between the flexibility of remote working and the in-person creativity and engagement of asking people to be in the office. Many organisations are redesigning their offers including enhanced benefits packages and even unlimited holiday policies – the businesses that are truly open-minded about what’s needed are most likely to find solutions that work both for them and the talent they rely on.”
Bev White, CEO – Nash Squared
About the Report
The 2022 Nash Squared Digital Leadership Report is the world’s largest and longest running survey of senior technology decision makers. Launched in 1998 and previously called the CIO Survey, it has been an influential and respected indicator of major trends in technology and digital for over two decades. This year a survey of over 1785 digital leaders took place between 20th July 2022 and 10th October 2022, across 82 countries.
You can register for the launch event, which takes place on Wednesday 9th November at 3pm GMT, here.
To request a full copy of the results, please visit https://www.nashsquared.com/dlr
About Nash Squared
Nash Squared are the leading global provider of talent and technology solutions.
We’re equipped with a unique network, that realises the potential where people and technology meet. For over three decades we’ve been helping clients solve broad and complex problems, building and transforming their technology and digital capability.
Established in 2005, CIONET is today, the largest private network of CIOs internationally. We have established leading communities of practice in 25 countries across Asia, Europe, and the Americas. With the active support of our national advisory boards, we have built a flourishing community of 10,000 technology executives.