The Worldwide Internet of Things Spending Guide by International Data Corporation anticipate that internet of things (IoT) spending in Europe, the Middle East, and Africa (EMEA) is in for an 11% compound annual growth rate (CAGR) between 2023-2028.
Western Europe (WE), Central and Eastern Europe (CEE), and Middle East and Africa (MEA) will account for around one-third of global IoT spending throughout the forecast. Western Europe will grow faster, with an 11,2% CAGR over the 2023-2028 forecast period compared to MEA’s 10,3% CAGR and CEE’s 9.4% CAGR.
After a couple of challenging years in terms of investment, the region is estimated to have higher year-on-year growth in 2025 compared to the previous year, as the adoption of 5G networks, advancements in edge computing, and AI-powered data processing are driving significant improvements in IoT infrastructure and capabilities.
“This evolution underscores the region’s commitment to leveraging cutting-edge technologies to drive innovation and efficiency, creating a more connected and intelligent environment. The potential impact on businesses is profound,” says Alexandra Rotaru, data and analytics manager with IDC’s Data & Analytics Group.
“IoT solutions will allow businesses to make faster, more informed decisions, enhancing their agility and responsiveness to market changes. These advancements will enable businesses to optimise processes, reduce costs, and create new revenue streams.”
Regarding industry spending, Retail and Utilities will see the largest investment in IoT solutions in 2025 in EMEA, followed by Government. The newly added video analytics use case accounts for nearly 8% of the total market, being found in all industries and supporting a variety of uses, including security and business analytics.
Investments in the IoT technology ecosystem in EMEA are expected to reach $283-billion by 2028. From a technology perspective, hardware will be the largest area of spending in 2025 and through the end of the forecast. Provisioned services, which includes telecommunications services and IaaS, will be the fastest growing technology category by 2028.
On a global level, Western Europe, China, and the US will account for almost 75% of all IoT spending throughout the forecast. Although WE and China have similar levels of spending, China will grow at a faster clip, posting a 12,7% CAGR over the 2023-2028 forecast period. China’s IoT spending is forecast to surpass the US by the end of the forecast.