Worldwide Government IT Spending Expected to Grow 6.8 Percent in 2023

Worldwide government IT spending is forecast to total $588.9 billion in 2023, an increase of 6.8% from 2022, according to Gartner. “Government organizations are continuing to modernize legacy IT and invest in initiatives that improve access to digital services as constituents increasingly demand experiences that are equivalent to online customer interactions in the private sector,“ said Daniel Snyder, Director Analyst at Gartner. “The total experience (TX) framework, which helps agencies manage employee and citizen interactions, is enabling transformation and will remain among the main drivers of IT spending in 2023.“

Along with improving the citizen experience and engagement, a cohesive TX strategy will help governments advance digital skills and literacy in their workforces by providing modern tools and approaches to lessen friction in government work. Failing to build a solid TX strategy increases service friction, leading to the risk of service delays and underwhelming service experiences. In 2023, government IT spending is forecast to increase across all segments except devices, as government end-users extend the useful life of their devices that were acquired at the onset of the pandemic.

Software will be the highest-growing segment in 2023 followed by IT services and internal services. Initiatives such as migrating services to the cloud, modernizing applications, and fortifying network security are among the primary innovation priorities that governments are focused on to improve public engagement and satisfaction. According to the 2023 Gartner CIO and Technology Executive Survey, digital transformation, leveraging and using data effectively and technology modernization are the top three priorities of government CIOs.

“Delivering on these priorities depends on establishing a shared, organization-wide digital vision and integrating that vision into enterprise-level strategies,“ said Apeksha Kaushik, Principal Analyst at Gartner. “In alignment with these priorities, investments will increase in cybersecurity, application modernization, cloud platforms, integration technologies such as AI and ML, and business/data analytics tools.“ At the same time, CIOs will have to tackle challenges such as varying stakeholder expectations and develop action plans accordingly. “Government CIOs will need to address concerns of digital transformation with mission objectives. They need to work closely with government executives to ensure a shared understanding of vision, roadmap, and linkage to mission-critical priorities,“ added Kaushik.