Home Technology Government IT spending set to fall in 2020

Government IT spending set to fall in 2020


Global government spending on IT is set to decline by 0.6 per cent this year, according to the latest forecast by research firm Gartner.

The worldwide public spend on IT is set to total around $438 billion, representing a contraction of 0.6 per cent, but global government spending on IT services and software is still a priority amid the Covid-19 pandemic, Gartner said.

Public expenditure on IT will comprise sixteen per cent of total enterprise IT spending across all industries, which the research firm anticipates will total $2.7 trillion in 2020, a decrease of 8 per cent year-on-year.

“Government organizations are accelerating IT spending on digital public services, public health, social services, education, and workforce reskilling in support of individuals, families and businesses that are heavily impacted by the Covid-19 pandemic,” said Irma Fabular, senior research director at Gartner.  “To sustain economic viability, government organizations also deployed government recovery assistance programs which assist small businesses and allow workforce reskilling.”

The software sector is predicted to experience the fastest growth in government spending this year, with an increase of 4.5 per cent, with the only other sector expected to show any growth being IT services.  The telecom services, internal services, devices and data centre sectors are all set to receive less public spending than in 2019.

“As government organizations globally begin to ease stay-at-home policies, some practices relevant to public health and wellness will persist, including options for telecommuting,” said Ms Fabular.  “Many government organizations will also introduce measures to build community and national resilience, including improving disease and other threat surveillance systems.  An example is the $500 million in aid designated by the US federal government in public health data surveillance and infrastructure modernization to help states and local governments develop Covid-19 tools.

“Important but less urgent IT projects, such as enterprise resource planning (ERP) and robotics process automation (RPA), will be delayed to make room for immediate and critical spending in digital workplace support, public health response and economic growth.  Adoption of cloud services will continue to accelerate while spending on in-house servers and storage will continue to decline.”

Government spending is expected to be highest in North America this year, with Gartner predicting a spend of $191 billion.  Western Europe is predicted to follow, with a spend of $94 billion, and Greater China is anticipated to spend $39 billion.

“Digital government services, data and analytics, cybersecurity as well as citizen engagement and experience will continue to be spending targets for the public sector.  In addition, as illustrated by an EU policy recommendation, building health system resilience to combat future pandemics will dominate some leadership priorities.  These priorities will include spending on supply chain predictability, medical research and IT infrastructure security solutions,” said Gartner.

6th August 2020.