In 2007, the IT market in Kosovo reached $85.17 million, according to the first comprehensive study for the country made by research company IDC. Overall IT spending rose around 40% year on year in U.S. dollars, on the wings of several major IT deals: informatization of EU mission administration in the country, foreign direct investment (FDI) in mobile operator iPKO, and a few government tenders. Measured in local currency, the market expanded approximately 30% year on year in 2007.

Posting $40 in IT spending per capita in 2007, Kosovo stood at 4.5% of the EU27 average ($886 per capita). Kosovo lagged behind average IT spending in the Adriatic region, as well, especially that of Slovenia ($455) and Croatia ($276), but it stood near the IT spending level of Bosnia and Herzegovina ($42) and was ahead of neighboring Albania ($25).

“Kosovo, as the youngest European state, with only 22% employed in total population will most certainly soon attract donor funds and FDI, which should push the local economy and improve IT investments in the country,” says Boris Zitnik, Managing Director, IDC Adriatics.

Spending on IT hardware captured 74% of Kosovo’s total IT market in 2007. The software segment was in second place, accounting for 13.1%, and IT services captured 12.9% of total IT spending in the country.

“The immaturity of the local IT market is heavily hardware-oriented, due to its relatively early development stage. In the next two to three years, it will be engaged mostly in basic IT infrastructure building,” comments Zitnik.

IDC expects IT spending in Kosovo to increase at compound annual growth rate of 9.9% during the five-year forecast period to reach $136.73 million in 2012.

IDC’s Kosovo IT Market 2008-2012 Forecast and 2007 Vendor Shares (IDC #ESQ10Q) presents the IT market in Kosovo and forecasts total IT expenditures by technology through 2012. The study contains market size, vendor market shares, and growth projections for hardware, packaged software, and IT services provision. It analyzes market trends and provides valuable insight into the main drivers of individual market segments.