All aspects of how people and organizations work is evolving, enabled by third platform technologies like cloud and mobile computing and accelerated by the COVID-19 pandemic. The future of work is a fundamental shift in the work model to one that fosters human-machine collaboration, enables new skills and worker experiences and supports a work environment unbound by time or physical space. In its Worldwide Future of Work Spending Guide, International Data Corporation estimates future of work spending will be nearly $656 billion this year, an increase of 17.4% compared with 2020.

“Traditional work models do not provide the agility, scalability and resilience required by the future enterprise. This was, of course, highlighted by the ongoing health crisis,” Holly Muscolino, research vice president of content strategies and the future of work at IDC, said. “To drive growth and competitive differentiation, organizations will invest in technologies and services that power automation, human-machine collaboration, new organizational structures and leadership styles, dynamic learning opportunities, a reimagined workplace and a digital work environment that is not bounded by time or physical place.”

To facilitate the transition to new workplaces and an evolving workforce, organizations are investing in a wide range of technologies and services. The largest area of investment in 2021 will be hardware, where companies are expected to purchase $228 billion in endpoint devices, enterprise hardware, infrastructure as a service (IaaS) and robotics and drones. Services, including business, IT and connectivity services, will be the second-largest area of spending at more than $123 billion. Software will experience the fastest spending growth, with a compound annual growth rate (CAGR) of 21.3% during the 2020 to 2024 forecast period. This includes investments in enterprise applications, content and collaboration, analytics and artificial intelligence, human resources applications, security and software development and deployment.

“Emerging technologies like artificial intelligence, the internet of things and augmented/virtual reality are changing how work is getting done across all industries and across the world,” Eileen Smith, program vice president of customer insights and analysis at IDC, said. “Seeking automated decision support and virtual collaborative approaches, discrete and process manufacturing, the two largest spenders on future of work technology over the forecast period, are investing in key use cases like collaborative robotics, operational performance management and 3D and digital product design and review for improved cost control and higher process efficiency.”

Together, discrete and process manufacturing will account for a little more than one third of all future of work spending this year. Professional services, retail and banking will be the next three industries in terms of future of work spending in 2021. The construction industry will experience the fastest growth in future of work spending during the forecast period, with a five-year CAGR of 23.7%. Media and retail will follow closely with CAGRs of 19.5% and 19.3%, respectively.

The future of work use cases that will benefit the most from spending in 2021 include collaborative robotics, operational performance management and automated customer management. The use cases that are expected to experience the fastest spending growth during the 2020 to 2024 forecast period are adaptive skill development, interconnected collaborative workspaces and advanced project management.

“IDC forecasts investment in technologies supporting future of work initiatives to exceed $1 trillion worldwide by 2024, with a robust 17% CAGR over the five-year forecast period,” Karen Massey, research manager for customer insights and analysis at IDC, said. “All aspects of how people and organizations work is evolving, enabled by third platform technologies and accelerated by the pandemic. Indeed, third platform hardware, such as IoT devices, robots and drones and IaaS, are more than one-third of the total spend, demonstrating the growing importance of the technologies enabling the reimagined workplace.”

The IDC’s Worldwide Future of Work Spending Guide assessed and sized the end-user investment opportunity related to three future of work transformation pillars — augmentation, culture and space — that support transformation for an improved employee and workplace experience. The guide leveraged the IDC’s Worldwide Digital Transformation Spending Guide as its foundation, then determined future-of-work-specific opportunities by sizing the DX technologies that fundamentally change the worker experience and/or the role of the human worker. Investment opportunity in the Future of Work Spending Guide (V1 2021) is presented across 10 future of work programs, 21 future of work use cases and 22 future of work technology categories, as well as 19 industries and nine geographic regions.