State and local spending on information technology is projected to increase by 44 percent over the next five years, up to $72 billion from $50 billion, Federal Computer Week (FCW) reports.
That projection comes from market research firm Input’s latest forecast, according to FCW, and the increase will be attributed to a stable U.S. economy and higher-than-expected tax revenues.
Input’s acting director of public sector market analysis, Jim Krouse, said spending on IT will be strongest in 2007 and 2008, as governments attempt to revive previously halted technology projects, according to FCW.
Krouse noted a number of business trends as drivers, including increased efficiency and consolidated operations due to the centralization of IT spending, the outsourcing of non-central government tasks and cost benefit reviews, FCW reports.
Though the company is still working on projections for how these governments will dispense their dollars, Krouse said state and local representatives will likely devote a large chunk of their budgets toward health-care spending, namely Medicaid, because that service comprises a large percentage of their funding.
For related news coverage, read IDC: IT Spending to Jump 6.3% in ’06.
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