Massive reserves and ample “rainy day” funds bolster a resilient SLED IT market
The Center for Digital Government, a national research and advisory institute focused on technology policy and best practices in state and local government, has released its annual report on the SLED IT market in the United States.
The CDG found that public sector IT spending continues to outpace overall economic growth, demonstrating its importance to government operations and its resilience in a post-pandemic world. State, local and education IT-related spending is expected to exceed $143 billion in 2024—a year-over-year increase of 4.5%.
Among the findings:
- Technology investments are anticipated to increase as government looks to solutions for automation and efficiency.
- With rapidly approaching deadlines, states and localities will be required to obligate remaining American Rescue Plan Act (ARPA) funds as the federal stimulus comes to an end.
- State and local budgets are normalizing to pre-pandemic levels, with some extra padding in their coffers from the rise of housing prices and temporary shifts in consumer spending.
- Public sector workforce challenges persist with high voluntary job departure rates putting pressure on existing staff and operations.
- Outcomes of thirteen state gubernatorial elections, as well as the presidential election, may alter priorities and policies affecting tech-opportunities.
“The public sector remains a resilient market with many opportunities for technology growth,” said Joe Morris, Chief Innovation Officer at e.Republic. “The integration and advancement of AI are particularly noteworthy, and there’s a call for creative solutions from tech providers to address the evolving needs of the public sector.” Morris reiterated that government needs strong private sector partners to help them navigate changes.
Through the release of its annual “GovTech Radar,” the Center for Digital Government has also pinpointed IT-related topics of interest to the public sector both immediately and in the near future. Added to the radar this year were fractional roles, edge AI/compute resources, autonomous fleet use cases, autonomous AI agents and satellite/space-based applications. The CDG found accelerated interest in a number of items—including AI/ML-based data insights, data compliance/privacy, contextual/personalized delivery and data science as a service.
The CDG noted that investments will be needed to strengthen or replace legacy IT systems as well as to build the “government of the future” that integrates advancements such as generative AI to become more efficient.
About the Center for Digital Government
Through its diverse and dynamic programs and services, the Center for Digital Government provides public and private sector leaders with decision support, knowledge and opportunities to help them effectively incorporate new technologies in the 21st century.
The Centers for Digital Government and Education, and the newly-launched Center for Public Sector AI, are divisions of e.Republic.
About e.Republic
e.Republic is the nation’s leading data, media and events company focused on state and local government and education, engaging leaders through print, digital, and event platforms.
