SPI Insights

As technology spending surges, government changes will be noticeable

Technology is evolving so fast that it’s almost impossible to stay current with the newest offerings. The benefits and capabilities are extremely significant. Because of that, billions of dollars are currently available for technology modernization in public entities at every jurisdictional level of government.

Federal funding is available for both state and local government officials, but it is most commonly parceled out by state leaders. Approximately $2 billion is available to expand identity programs, reduce fraud and payment errors, secure networks, and move programs to cloud-based infrastructure. Federal support is certainly needed but there is even more available funding for technology because state legislatures are aware of critical needs and funding has been budgeted from most states as well. Not to be overlooked are the increased technology budgets recently approved by city, county, education, and healthcare officials. Technology upgrades are becoming common, and many public entities are purchasing the newest, leading-edge tech offerings.

When something allows public officials to save time, reduce resources and increase efficiency, purchases are justified. The new offerings also provide greater network security, increased capabilities, and automated ways to control fraud and increased public safety efforts. Health-related activities are boosted by technology and emergency efforts are greater with quick data analysis, inoperability and information sharing of every type. It makes perfect sense for government to have leading-edge technology but only recently has funding been available for many critical needs. Public officials are finally getting an opportunity to do some much-needed shopping and buying.

Almost every government agency has antiquated legacy systems that are so old it is difficult to get rid of them. They are inefficient, fragile, slow, and difficult to secure. Their capabilities are limited and managing the systems is labor intensive. Despite all the drawbacks, and because of all the programs and data located on legacy systems, they are still used. New funding designated for technology modernization is truly a long overdue gift, and it will enable some governmental entities to move away from legacy systems that passed useful life expectancy decades ago.

One of the leading management consulting firms recently identified a few of the top technology spending trends for government in 2023. The most significant trend, of course, is the modernization of old legacy systems. New software programs, cloud storage, app development, sensors and robotics, however, are all part of what public officials are currently purchasing. Another current offering is what is known as sovereign-cloud – a cloud computing environment that regularly updates programs for local compliance, regulation and new rules. It is becoming more common.

The capabilities of artificial intelligence (AI) are staggering, and occasionally frightening, but AI is a leading trend. Because of the capabilities of AI, Congress is considering and will likely administer some type of regulatory oversight.

Big data, the Internet of Things (IoT), intelligent transportation and cybersecurity programs are all components of technology modernization. Big purchases of these types of technology are evident throughout the country.

The 2024 federal budget item for artificial intelligence amounts to billions. It is structured to support AI-related research, hardware, software, and services at numerous federal agencies. State and local governments are also budgeting for similar initiatives. Because of the incredible pace of machine learning, natural language processing, and computer vision, America’s workforce will change. There will be new opportunities and some challenges. Because of the disruptive nature of AI, the federal budget also contains millions for the oversight of AI.
At the federal level, the Department of Defense is likely to spend $67.4 billion on AI-related purchases to deliver cybersecurity, IT, and electronic warfare capabilities. Another $145 billion is tagged for AI-related research and development.

Technology funding is available through dozens of grant programs that support water projects of all types. New water treatment plants, wastewater initiatives, water pipe upgrades and water purification projects all require new technology. Roadway expansions and upgrades, port enhancements, airport improvements and new public facilities of every type will require technology. Public hospitals and clinics all have plans for purchases of leading-edge technology. Research labs that are constructed will require highly sophisticated sensor technology of all types. One of the areas of highest demand for technology, however, may be public safety – whether protection is designed along roadways, on public trails, at airports, or in local neighborhoods.

It is difficult – maybe impossible – to think of any large public project in the coming years that will not require significant amounts of new technology. The next several years will undoubtedly report extremely high demand for technology firms of all types along with consulting and professional services firms that contract with government.