In the immediate future, the need to innovate will drive company's IT spend, a new report suggests.

The website computerweekly.com has seen a report from Forrester which found that 30 per cent of IT decision makers plan to spend their budgets over the next eight years on new applications and programmes, rather than to maintain existing systems.

David Metcalfe, senior vice-president at Forrester, told the website: "Developing internet-based applications to improve interactions with customers and suppliers is now key on CIO's agendas.

"CIOs are under increasing pressure to innovate through new IT applications, and the opportunity cost of losing ground to competitors is fuelling this trend."

However, Mr Metcalf also warned that IT managers need to improve the way their present this IT innovation to their company's board. At the moment, Mr Metcalf said too many board members at smaller companies see IT as a drain on resources.

"Business will become so deeply embodied in technology, and the technology so deeply embedded in the business, that the development of next generation IT applications needs to be managed with more savvy than it is today," he concluded.

A recent report from BT found that small businesses could improve productivity by hiring dedicated IT workers.