IT Services - Latvia

Latvia

Revenue in the IT Services market is projected to reach US$283.70m in 2024.
IT Outsourcing dominates the market with a projected market volume of US$107.40m in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 7.12%, resulting in a market volume of US$400.20m by 2029.
The average Spend per Employee in the IT Services market is projected to reach US$289.00 in 2024.
In global comparison, most revenue will be generated in the United States (US$522.00bn in 2024).

Key regions: United States, China, India, Japan, Germany

Definition:
The IT Services market encompasses a wide range of services used by organizations to create, manage, and deliver information, and it includes services that provide assistance with various other business functions. The primary goal of IT services is to ensure that information technology infrastructure, applications, and systems are effectively implemented, operated, and optimized to support an organization's business objectives and requirements. The specific range of services offered may vary depending on the service provider and the client's requirements.

Structure:

IT Services contains four distinct markets that are based on different services:

IT Consulting & Implementation covers advisory services that help businesses evaluate their technology strategies and align them with their business strategies or internal processes.
Business Process Outsourcing (BPO) refers to the transfer of entire business processes or individual activities from a company to a third party and is often IT based. BPO covers a wide variety of business processes, usually either in the back office (e.g., human resources) or in the front office (e.g., customer service in call centers).
IT Outsourcing refers to the external contracting of all IT-related services instead of relying on company-owned resources. In an IT context, these activities include IT administration, IT application, and web hosting services.
The Other IT Services market covers revenues for areas that are not specifically mentioned in the other markets, such as system integration, software installation and support, and IT education and training.

Additional Information:

The IT Services market comprises revenues, revenue change, average spend per employee, and a list of the key players in the market and their consolidated revenues. Market values represent revenues that are generated by primary vendors either directly or through distribution channels at the manufacturer price level (excluding VAT). Reported market revenues include spending by enterprises (B2B) and governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed. Key players in the market include IBM, Cognizant, Hewlett Packard Enterprise, and TCS.

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Market

Region

Region comparison

Currency

Analyst Opinion

Latvia, located in the Baltic region of Europe, has been experiencing a steady growth in the IT Services market over the past few years.

Customer preferences: The customers in Latvia are increasingly adopting digitalization and automation in their businesses, leading to a higher demand for IT Services. Small and medium-sized enterprises (SMEs) are the major contributors to the IT Services market in Latvia. They are looking for cost-effective and efficient IT solutions to stay competitive in the market. Additionally, the government is also promoting digitalization and e-governance, which has further fueled the demand for IT Services.

Trends in the market: One of the major trends in the IT Services market in Latvia is the shift towards cloud computing. The customers are increasingly adopting cloud-based solutions due to the benefits of scalability, flexibility, and cost-effectiveness. The demand for cybersecurity services has also been on the rise due to the increasing number of cyber threats. The customers are looking for comprehensive cybersecurity solutions to protect their businesses from cyber attacks. Another trend in the market is the increasing demand for software development services. The customers are looking for customized software solutions to meet their specific business needs.

Local special circumstances: Latvia has a highly skilled and educated workforce in the IT sector. The country has a strong focus on education and science, which has led to the development of a strong IT talent pool. Additionally, the country has a favorable business environment with low taxes and a simple tax system, which has attracted foreign investments in the IT sector. The government has also been promoting the development of the IT sector by providing various incentives and subsidies.

Underlying macroeconomic factors: Latvia has been experiencing steady economic growth over the past few years, which has led to an increase in the disposable income of the people. This has led to a higher demand for IT products and services. Additionally, the country has a favorable business environment with low taxes and a simple tax system, which has attracted foreign investments in the IT sector. The government has also been promoting the development of the IT sector by providing various incentives and subsidies. The country's strategic location and good infrastructure have also made it an attractive destination for IT companies looking to expand their businesses in the region.

Methodology

Data coverage:

The data encompasses B2G, B2B, and B2C enterprises. Figures are based on enterprises' technology spending on products, consulting, and outsourcing services.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players in the industry, Statista's primary research and surveys, and IT associations. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and telecommunication. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the exponential trend smoothing method is used based on the market data characteristics. The main drivers are the GDP and its sector composition, internet penetration, the level of digitization, and the attitude toward IT security.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.