State, Local Governments to Boost Tech Spending

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Although the federal government gets plenty of headlines about its expenditures, politicians at the state and local levels spend money too—and how. (State governments alone collected nearly $600 billion in the fiscal year 2004, and I’ll wager most of them found ways to spend that money.) This could be good news for IT professionals. Research firm Datamonitor predicts that total state and local government IT spending will grow from $55 billion last year to more than $62 billion by 2009, an increase of about 13 percent.


Datamonitor’s “IT Opportunities in State and Local Government” report predicts that sub-federal public sector spending will move away from hardware and networking in favor of software and services, citing a drop in hardware prices, a substantial decline in employee populations due to approaching retirements, and a rising focus in e-government and comprehensive IT systems as reasons behind the change. The figures in the study account for both government spending on IT contracts involving outside organizations and experts and internal technology solutions.


Although the actual products and services bought may change significantly, the reasons behind the purchases will not, Datamonitor experts concluded. State and local governments will maintain their traditional focus on emergency services, courts, and public health and sanitation, which accounted for more than half of IT spending in that sector last year.


Another key trend will be government agencies’ consolidation of their IT infrastructure and administration. Ideally, by following in the footsteps of many of their private counterparts, the public sector will drive down IT costs, remove duplication, increase productivity and make operations more efficient.


There are a few places readers who are interested in finding and evaluating opportunities in the state and local government IT can look. Sites like, and are a good place to start your assessment of this important, but sometimes overlooked, market.


For more information, see

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