Shrinkage before expansion: How AI can fuel the growth of tech services

Over the past two years, something unusual has happened in the technology services industry, an industry that could have been expected to grow almost steadily for three decades. Historically, consulting, systems integration and outsourcing, particularly those related to the Software Development Lifecycle (SDLC), have increased by 5 to 15% annually.

But today growth has stagnated. Depending on the quarter, the industry fluctuated between a growth of 1% and a decline of 2%. Of course, there are still companies that are growing, but their growth comes at the expense of others. The industry has entered what I would describe as a market share swap. Those that gain ground do so by taking business from competitors rather than expanding into new demand. Overall, there is virtually no net growth in the market.

Where did the growth go?

In a world where we talk so much about AI investments, that doesn’t lead to…