Gartner Forecasts Worldwide Government IT Spending to Grow Nearly 8% in 2023

Worldwide government IT spending is forecast to total $589.8 billion in 2023, an increase of 7.6% from 2022, according to Gartner, Inc.

“Global challenges like inflation and workforce scarcity and their local repercussions are testing the abilities of government CIOs to respond with appropriate service delivery mechanisms and organizational accountability,” said Apeksha Kaushik, Principal Analyst at Gartner. “In addition, the “great resignation” and the competing demand from the commercial sector have forced governments to re-examine their approaches to counterbalance internal talent scarcity.”

In 2023, government organizations will sustain commitment to investing in digital programs, according to the forecast. “Governments are increasingly spending their IT budgets to replace legacy applications. Gartner’s 2023 CIO and Technology Executive Survey showed that 57% of government CIOs plan to increase funding for application modernization in 2023, up from 42% in 2022,” said Kaushik.

An increasing number of government institutions are already putting in place at least one digital metric linked directly to outcomes associated with their organization’s public purpose or mission. By 2026, Gartner foresees more than 75% of governments will gauge digital transformation success by measuring the enduring mission impact.

In 2023, software will continue to be the highest growing segment in 2023, according to the report. Application modernization investments are expected to increase, supported by more software-as-a service-based solution offerings. The use of low-code application platforms (LCAPs) is also on the rise and will further accelerate legacy modernization efforts.

Government spending on IT services will continue unabatedly in 2023. “Compensation constraints and limited resources to attract and retain IT talent is becoming an even bigger challenge today as many governments are facing IT talent shortage,” said Kaushik.

To continue modernizing and innovating critical IT infrastructure and applications, some government organizations will embrace a multisourced workforce strategy by optimizing the use of internal IT talent and investing in employee experience tools to empower and spark innovation, as well as partnering with external IT service providers to speed time to value.

Channel Impact^®
Channel partners focused on the public sector are in the midst of a major opportunity to guide governments looking to gain maximum benefit from digital transformation. Governments are increasing digital investments in response to global turmoil.