With uncertainty spreading throughout the federal government and President Trump expected to cut discretionary spending, including technology, consulting firms and federal IT vendors are suddenly shifting course to focus on the state and local government market.
Trump has already announced a hiring freeze, and he plans to cut spending across all agencies except the military and defense. Over the past two weeks, I’ve noticed an uptick in coverage on the state and local market in direct response to these looming federal changes and proposals. As someone who has covered the state and local government (SLG) technology market for nearly 10 years, I found it humorous to see articles stating things that we’ve all known for quite some time, such as “state and local government may hold the most promise for IT job seekers and IT vendors,” and that the SLG market is performing better than the federal IT market.
After all, the state and local government market has been outperforming federal government for the past decade. In 2017, the SLG market is expected to spend an estimated $101.3 billion on IT compared to just $81.6 billion for federal government (excluding defense). The state and local government market is larger than many inside the Beltway give it credit for. For example, roughly, 19 million people are employed nationally by state and local governments compared to roughly 2.5 million within the federal government. Furthermore, if states were private companies, 24 states would rank in the Fortune 100 based on their overall budget size.
Here’s the good news: States and localities have been doubling down on technology. The Center for Digital Government, sister organization to Government Technology, has seen firsthand how technology has played a significant role in helping states and localities successfully climb out of the Great Recession. In fact, GovernmentNavigator.com, our market and sales intelligence platform, has measured a steady increase in the volume of IT procurements — going all the way back to 2011.
This story was originally published by GovTech Navigator.