28 March 2002 The tech sector recovery will be stronger than previously forecast, thanks to “the US economy’s unexpectedly rapid turnaround”, according to a recent research report.

Market research group Forrester has almost doubled its forecast for IT spending growth to 3.9%, from earlier projections of 2.2%, for the second half of 2002. Double digit growth is expected in 2003.

Bruce Tempkin, author of the “tech recovery update”, added that corporate IT spending, fuelled by pent-up demand, will drive growth in the tech sector by 10.4% in 2003. Tempkin expects this to swell to 12.5% – up from earlier Forrester projections of 11.8% – in 2004.

Tempkin identified web services, broadband Internet and the expected proliferation of wireless connections as key drivers of this recovery. Web services will prompt application vendors to redefine their offerings and encourage companies to broaden collaborative efforts, he says.

Broadband access “will reinvent consumer electronics” by allowing increasingly sophisticated content to be delivered. This is expected to drive demand for MP3 players and digital cameras, for example.

Meanwhile, ever cheaper integrated circuits will allow everyday devices to be connected to the Internet. “$1 chips,” says Tempkin, “will have all the power and networking capabilities of a circa-1990 PC.”