The Benelux Union is a politico-economic union between Belgium, the Netherlands and Luxembourg. One of the main objectives of the Union is to improve mobility, security and sustainable development across all three member countries.
In terms of business, the Benelux region has many strategic advantages, from its geographical location, to a growing multi-lingual and technically qualified workforce to its well-developed infrastructure.
Because of this, Belgium, the Netherlands and Luxembourg have become attractive countries for IT investment, with the member countries actively encouraging development of the knowledge economy over conventional industries like labour, land and capital.
Economic volatility in Europe will stymie IT growth
However, ongoing economic volatility in Europe has created scepticism among business leaders in the Benelux region, and many are reluctant to increase their IT spending.
The cautious approach to IT in the region has resulted in relatively low projected growth in IT spending in Benelux countries from 2014-2019.
Moderate investments are expected to result in a cumulative average growth rate of just 3.41% during the projected period. The market value will grow by just under $8 billion by 2019, to reach a total value of $51.79 billion.
Segmentation of IT services in Benelux by geography 2014
Source: Technavio, 2015
Technavio has identified three trends that are expected to contribute to moderate growth in the IT market in Benelux countries.
Growing number of small and medium-sized enterprises (SMEs)
SMEs have dynamic needs but they also have fewer resources to meet their needs. The growing number of SMEs has a major influence on the development of IT markets worldwide.
The pressure to digitize entire organizations has resulted in structural changes in organizations and has driven growth of IT spending by SMEs in the Benelux market.
Emergence of industry ecosystems
Clients, vendors, and partners are creating industry ecosystems to offer deep market sensing, analytics, planning, and the creation of customized products and services, in order to meet market demands.
While industry ecosystems initially focused on the internet of things (IoT), new ecosystems are emerging around payment systems, digital insurance, transportation, and healthcare.
Because of this, the market is witnessing several new ecosystems in traditional industries, as partners successfully address emerging client needs using both big data and analytics.
Emergence of new roles
The emergence of the Chief Digital Officer (CDO) role in several organizations is illustrative of an IT landscape that requires executives proficient in both IT and business.
CDOs act as a catalyst, connecting all functions and departments for digital transformation. They keep track of data sources, destinations, and patterns of use to improve the customer experience.
The development of new roles to harness the potential benefits of digitization is driving organizations to spend more on IT and related services in order to gain a competitive advantage in the market, which will be an ongoing market trend through 2019.
