Report: Public safety boosts state, local IT spending

Spending on public safety and justice and health and human services will drive increased state and local IT spending over the next four years, according to a report from London-based market analysis firm Datamonitor plc.

These functions accounted for more than one-half of the total IT investment by state and local governments in 2004, and will be the focus of the spending increases, the firm said.

The report, titled "IT Opportunities in State and Local Government," predicts that state and local government spending on IT products, services and personnel will rise from $55 billion in fiscal 2004 to $62.4 billion by 2009.

The need to improve constituent services, reduce costs and increase internal efficiency will drive the increases, Datamonitor said. The spending projections include everything from external spending on IT contracts to internal spending on items such as staff and office equipment.

The increased emphasis on public safety and justice reflects the times, said Kate McCurdy, public-sector technology analyst with Datamonitor and author of the study.

"State and local governments are investing in technology in response to public and media attention on their capabilities to handle emergency situations and support community protection on an ongoing basis," she added.

McCurdy anticipates that state and local governments will increase their spending in services and software at a faster rate than investment in hardware and networking equipment. Spending on support, consulting, systems integration and outsourcing are likely to be driven by the need to compensate for retiring staff, reducing administrative costs and keeping up with current technology trends, McCurdy said.

Software spending will be driven by the need to increase internal efficiency in financial management and human resources, the report said.