In case you haven’t been greeted, welcome to the age of digitalization.
As digitalization grows, so does SLED technology spending. Overall, SLED IT spending is expected to grow between three and five percent in 2023 with total spending reaching as high as $137 billion.
Welcome to the “big data” edition of Market Insights. Let’s get to it!
IT Spending and Opportunity Volume are Growing
Technology-related spending is outpacing U.S. GDP. Overall, SLED IT spending is on an uphill projection over the next few years.
Projected annual IT spending based on a variety of indicators.
Takeaway: IT as a whole is a strong sector. Everything is getting looked at through the “experience lens” in the world of digitalization, so the opportunity for IT is strong.
Speaking of opportunity, Industry Navigator tracks IT-specific opportunities in SLED.
What we found in Industry Navigator is that overall IT spending isn’t the only thing growing. Per the chart below, the volume of opportunities is on the path to catching up with the pre-COVID opportunity volume.
(Let me know if you are interested in learning more about tracking these opportunities and much, much more in Industry Navigator.)
Federal Stimulus Dollars are Still in Play
Federal funds add even more padding to overall state budgets.
COVID Impact — Three COVID-era stimulus packages provided states and localities with roughly 40% of their annual tax revenue.
ARPA — The bulk of this aid came through the American Rescue Plan Act of 2021. This funding is still creating opportunities in SLED today.
IIJA — Funding from the Infrastructure and Investment and Jobs Act is just starting to flow. We’re only in the first inning!
Strong Support — Strong federal support will remain for the near-term, but states need to plan for a return to more normal funding levels post-IIJA.
We are not anticipating more major pandemic stimulus or another transportation bill of this size, but remember, these are multi-year programs.
The 5-year transportation program alone will create a decade’s worth of projects.
Takeaway: Solving the puzzle around how to leverage these funds will set you up for this year, next year and beyond.
CIO Top Priorities
Last but certainly not least, the results are in (drumroll, please).
Here are the top 10 CIO priorities for 2023:
Takeaway: It’s noteworthy that there is communality across the lists on several key priorities (cybersecurity, customer experience and workforce are all top of mind).
“Budget and cost control” dropped from the list.
While CIOs will always be cost conscious, it is indicative of the strength of the market right now.
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.