ICT, or information and communication technology, is no longer just a part of business: it has become a structural capability that determines how societies function, how companies create value, and how countries shape their economic competitiveness. This is also confirmed by the trends characterizing the coming year. Doris Põld, Head of Estonian Association of Information Technology and Telecommunications, writes about what can be expected in ICT sector in the coming year. 

Just a few keywords – artificial intelligence-based development platforms, confidential data processing, integrated systems, and security transformation – are all strategic areas that larger organizations and even countries must take into account. Gartner predicts that by 2026, over 80% of large enterprises will use artificial intelligence in at least one critical business process. By comparison, four years ago, only one fifth of companies used artificial intelligence solutions.

“By 2026, over 80% of large enterprises will use artificial intelligence in at least one critical business process. By comparison, four years ago, only one fifth of companies used artificial intelligence solutions.”
Doris Põld, Head of Estonian Association of Information Technology and Telecommunications

The global ICT world is huge and growing rapidly. According to various estimates, the information technology and communications market was worth approximately $6.03 trillion this year, which gives reason to expect that it will play an increasingly important role in the global economy in the coming year. This growth reflects a trend where technological consumption and ICT investments significantly exceed traditional economic growth in many countries: analysts expect ICT to grow by an average of 8-10% per year between 2025 and 2027.

European ICT development must build trust 

Europe’s approach to ICT is often slower but well thought out, combining innovation and social trust. Although America is clearly pulling ahead, Europe remains true to its values: technologies must serve people and the public interest, not just and above all profit.

Europe’s digital strategy emphasizes that ICT solutions must be trustworthy, secure, and interconnected. This means that they work in interoperable way without compromising people’s rights or security. Europe emphasizes the importance of commonly agreed standards and accountability, which is also reflected in the regulatory frameworks governing data protection and digital infrastructure.

“Although America is clearly pulling ahead, Europe remains true to its values: technologies must serve people and the public interest, not just and above all profit.”
Doris Põld, Head of Estonian Association of Information Technology and Telecommunications

According to the European Commission, AI regulations and data space regulations directly affect nearly 70% of European digital solutions, forcing companies to take compliance requirements into account at an early stage of development. This clearly distinguishes the European approach: here, new gadgets are not brought to market simply for the sake of innovation, but solutions are created that the public sector, businesses, and citizens can trust. Unfortunately, the price of this trust is higher costs and longer development times for new services. As a result, Europe continues to struggle with competitiveness in the field of innovative technologies.

The US is at the center of ICT development

While Europe sees ICT as part of a social contract, the US has made technological capability a national strategy. For Americans, this is an area that the state and companies treat as the core of global competition. And at the heart of this is artificial intelligence.

By 2026, it will be clear that ICT strategies in Washington and Silicon Valley are not following two different paths, even if this seemed to be the case for a while. Artificial intelligence is seen not only as an opportunity to increase efficiency, but also as the basis for all competitive advantages: it integrates itself into software development, automated decision-making processes, and real-world systems. Total private and public sector investment in artificial intelligence in the US is estimated to exceed $300 billion in the coming year. Much of this will be spent on data centers and increasing computing power.

Gartner analysts emphasize that AI-based development environments and confidential data processing are critical to keeping systems secure and reliable. According to forecasts, more than half of business-critical data processing will take place in environments where data is encrypted even during processing.

This is also reflected in the dominant trend in the US, where cloud and data processing platforms and infrastructure developments are seen not only as opportunities for revenue growth, but also as strategic resources that support not only the economy but also national security. Technology companies such as Cisco, for example, have raised their revenue and profit forecasts for 2026 precisely because of the rapid expansion of AI infrastructure and network solutions. Amazon, Microsoft, and Google have announced massive investment plans, with investments exceeding the annual ICT budgets of several European countries.

“The economic damage caused by ransomware attacks alone is estimated to exceed $20 billion globally in 2026.”
Doris Põld, Head of Estonian Association of Information Technology and Telecommunications

ICT 2026: technological trends and risks

Looking at technology trends in general, the main points are:

• Artificial intelligence-based integrated systems and modular development, where software development no longer means manual code writing, but continuous collaboration with AI assistants, which increases both the speed of innovation and flexibility. Studies show that AI-assisted development can shorten development cycles by 20-40%.

• Confidential data processing, where data is no longer protected only during storage or transmission, but also during processing. This means that even the system administrator or cloud service provider does not have access to the data being processed. This approach is particularly important in areas where sensitive information is processed. Analysts estimate that the use of confidential data processing will grow rapidly in the coming years, as it combines the scalability of cloud services with strict data protection. By 2026, it will no longer be a niche solution, but a prerequisite for collaboration in situations where data must be shared across organizations and national borders without compromising trust.

• Multi-agent and domain-specific models, where artificial intelligence no longer functions as a single tool, but as a collection of role-based and interconnected agents. Such systems enable the automation of complex workflows and support decisions based on domain-specific rules, leaving supervision and responsibility to humans. Gartner predicts that by 2026, at least 15% of organizational decision-making processes will be carried out with the help of autonomous agents, which means that AI will move from being an analytical tool to an active participant in everyday management and service processes.

• Smart cloud and edge computing solutions, where data processing no longer takes place only in central data centers, but increasingly closer to the user, device, or event location. This architecture reduces delays, improves reliability, and allows data to be processed even in situations where connectivity to central systems is limited or intermittent. By 2026, solutions combining cloud and edge computing will become particularly important in industry, smart cities, and critical infrastructure, where real-time response and local data processing are no longer an advantage but a prerequisite for operation.

At the same time as ICT solutions expand, so do the opportunities for attack and security risks –  increased number of connected devices and systems open up new vulnerabilities that must be addressed with defence strategies. The economic damage caused by ransomware attacks alone is estimated to exceed $20 billion globally in 2026. Secure by default most become a norm in every solution. Global spending on cybersecurity is growing by more than 12% per year, making it a separate and one of the fastest-growing ICT segments. Every company should have budgeted cybersecurity costs because preventing threat is always cheaper.

“Estonia is a model of a digital society for many other countries, where ICT is not just a sector, but the DNA of the entire system, and this was the case long before most of the world realized that this was the way to go.”
Doris Põld, Head of Estonian Association of Information Technology and Telecommunications

The example of Estonia: a small country with a big impact

At first glance, it may seem difficult for a small country to compete on the global ICT market, but Estonia is an exception. Estonia is a model of a digital society for many other countries, where ICT is not just a sector, but the DNA of the entire system, and this was the case long before most of the world realized that this was the way to go. Our smart people and willingness to increase efficiency have made this change possible and easy.

All of our public services are digitally accessible, which is a matter of course for our people and part of the social contract. In both the public and private sectors, we are accustomed to invisible digital services that help us save time and money in our daily activities. It is estimated that digital public services in Estonia save over 1,400 full-time jobs every year.

In terms of ICT specialists, Estonia is among the top countries in Europe, alongside Sweden, Luxembourg, and Finland, where 7.2% of all employed people work in ICT-related jobs (the EU average is 5%). The employment of women in the IT sector has also grown. In total, Estonian IT companies employ approximately 35,500 people and the sector’s turnover is around €10 billion.

The Estonian ICT sector accounts for approximately 9-11% of the country’s GDP, which is a strong result compared to many European countries and demonstrates the importance of the digital economy in Estonia. For example, our result is stronger than that of Germany or Hungary. In 2022, approximately €1.3 billion was invested in this sector, which shows that international capital sees value and potential in Estonia’s ICT ecosystem. More than half of the sector’s turnover comes from international clients, which shows that Estonian solutions are globally competitive and exportable. In 2024, the volume of Estonian ICT service exports was approximately $3.51 billion, accounting for nearly 30% of Estonia’s total service exports.

“It is estimated that digital public services in Estonia save over 1,400 full-time jobs every year.”
Doris Põld, Head of Estonian Association of Information Technology and Telecommunications

Estonia’s success is not limited to numbers alone. Estonian companies have developed world-renowned solutions in the fields of cybersecurity, AI-based systems, and IoT applications, which are used in smart city planning, agriculture, and industrial applications. In terms of the broad-based use of AI, the country is moving up in the European Union. The changed geopolitical situation has created a rapidly growing defence technology sector, whose solutions are often tested on the battlefield in Ukraine. As a rule, these are dual-use solutions that have additional applications in peacetime. The defence sector has in turn become a leading market for innovation in other sectors, such as green technology.

Estonia has not only managed to put technology to work for its people: our companies are creators and distributors of innovative technological solutions, making a significant contribution to Estonia’s economy and exports.

Opportunities for a small country in the developing ICT market

By now, the ICT world has become so extensive that all countries and societies are increasingly dependent on technological development capabilities. It is a strategic game in which countries, companies, and societies are increasing their digital capabilities because of the direct impact this has on the economy, security, and social cohesion.

Large markets such as the US are creating infrastructure and frameworks that strengthen their position on the global stage, investing vast sums of money in AI infrastructure and cloud services, both publicly and privately, because this is the strategic basis for their global competitiveness. Europe is focusing primarily on ensuring that technological innovation serves the interests of people and society, emphasizing trust and the creation of public value.

Small countries such as Estonia are showing how a flexible approach, a functioning social agreement, and a strong ICT community can together create a globally recognized ICT ecosystem with strong export capabilities. This is where the most concrete opportunities for Estonia will open up in the coming year. First, Estonia can offer trust-based digital services where identity management, data control, and cyber security are not added value but the foundation of the system. Countries and large organizations that are still looking for ways to combine the widespread use of digital services with data protection can obtain models from us that have been proven in real-world use.

“Small countries such as Estonia are showing how a flexible approach, a functioning social agreement, and a strong ICT community can together create a globally recognized ICT ecosystem with strong export capabilities.”
Doris Põld, Head of Estonian Association of Information Technology and Telecommunications

Secondly, Estonia has a strong position in the design of AI-based workflows and digital solutions for the public sector. Our experience shows how artificial intelligence can be a tool for civil servants, doctors, teachers, or entrepreneurs, rather than an additional burden. This is a value sought by many countries where digitization has so far meant adding a digital layer on top of existing bureaucracy rather than truly simplifying administrative procedures.

Thirdly, Estonia’s small size creates an opportunity to act as a regulatory and technological testing ground. Solutions that have been tried and tested in real life, whether they relate to data exchange, cyber security, smart infrastructure or AI-based decision support, are easily exportable.

Finally, Estonia is also strong in exporting expertise, not just software development. High-level expertise in cyber security, data architecture, digital state building, and complex system orchestration allows Estonian companies to be international partners, not subcontractors. In an increasingly complex ICT world, it is not necessarily the big players who win, but those who have experience, trust, and the ability to link technology with social value. For Estonia, this is not a new direction, but a familiar path.

This content is funded by the European Union – NextGenerationEU.

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