Regional and state government spending is growing faster than federal spending, creating new IT opportunities and challenges
Singapore – November 13, 2007 – Springboard Research, a leading innovator in the IT Market Research industry, today announced the latest data from its study of public sector IT spending in Asia (including Japan). Study results show that growth was steady in the region. Based on its market analysis, Springboard expects IT spending to be US$51.5 billion in 2007, with the market growing at a compound annual rate of 6.9% from 2006 through 2010.
Springboard’s analysis also showed that Japan, while growing much slower than the rest of Asia, is still by far the largest market in the region, accounting for 45% of public sector IT spending. China and Australia are the next largest markets, accounting for 20%, and 11%, respectively, of public sector technology spending. India is the fastest growing market in the region, and the market is forecast to grow at a compound annual growth rate of 19.5% through 2010.
While federal IT spending accounts for 72% of all expenditures, Springboard is seeing increased growth in spending at the next level, comprised of state, regional, provincial and local governments.
“This segment of the market is growing at close to 10% a year across the region and state-level spending is growing twice as fast as federal spending in more mature markets like Japan, Australia, Korea, New Zealand, and Taiwan ,” said Jonathan Silber, Research Manager for Springboard Research. “This is an opportunity, but it also represents more real estate that vendors need to cover as there are a lot more organizations at this level. Also, local government spending has tended to grow slower than state and regional spending; but in India, Indonesia, and the Philippines, we have seen strong local spending growth that is as fast or faster than federal and state spending,” Silber added.