IDC has published a forecast for the Japan small and medium-sized business (SMB) IT market from 2013 to 2017. The weaker yen and higher share prices have helped improve Japan's economy, but small and medium-sized businesses have been slow to recover, and 2013 experienced a backlash from the hardware replacement demand of 2012. The size of the 2013 SMB IT market is forecast at JPY3.6694 trillion (US$37.6 million), virtually flat on year.
Under the aggressive economic policies of the new government (Abenomics), signs of recovery in the Japan economy began to be seen during 2013 due to the sharp depreciation of the yen and surging share prices. The rebuilding of the Tohoku region has accelerated, and there has been a modest increase in the number of companies showing improved results. However, most corporate results have been slow to recover due to increasingly intense competition from emerging economies and acceleration in the relocation of production centers overseas by large manufacturers. Replacement demand for PCs and other hardware expanded the market in 2012, but in 2013, the backlash is felt as many small and medium businesses cut back on their IT spending. The Japan SMB IT market is therefore forecast to be virtually flat for 2013, and full-fledged recovery is not expected until 2015 or later. However, on a product-by-product level, some sectors are forecast to record positive growth in 2013 for medium-sized companies, particularly software and IT services.
By industry, information services will see positive growth in 2013, but distribution will be virtually flat, and other sectors are expected to record negative growth. In 2014, most industries are expected to record negative growth, and full-fledged recovery is not forecast to occur until 2015 or later. However, an expansion in IT spending is expected from distribution as it prepares for hikes in the consumption tax, and in healthcare and nursing care (included in statistics under services) as services are integrated at the local community level.
Geographically, most regions are forecast to record negative growth for 2013, though positive growth is forecast for Hokkaido/Tohoku, Kanto, and Hokuriku/Koshinetsu. For Hokkaido/Tohoku in particular, the expansion in reconstruction demand and the establishment of new locations by major companies is expected to bring an increase in IT spending by small and medium-sized businesses, which have been slow to spend at this point. In other regions, IT spending will tend to be restrained due to the slow recovery of local economies, and the contraction and closure of large manufacturers' production centers.
The government's aggressive economic policies have produced a recovery trend for the Japanese economy in 2013, but the growth rate will continue to be low for the Japan small and medium-sized business IT market through 2014. Nonetheless, some sectors are forecast to see IT spending expand as a result of economic policies. Hitoshi Ichimura, senior market analyst, IT Spending, IDC Japan commented, "It will be important for IT vendors to accurately understand the economic policy trends and their impact, and to give priority in deployment to solutions in sectors where IT spending is expected to expand."