E-gov leads IT spending forecast
- By William Matthews
- Dec 07, 2000
Federal spending on e-government is likely to increase by 10 percent a year
for the next five years — nearly double the rate that spending is expected
to increase for more traditional federal information technology.
The increase is part of an e-government spending growth trend projected
by the Virginia-based market research company Input.
The federal government now spends a total of $40 billion a year on IT,
including salaries for federal IT workers. About $30.2 billion a year goes
for IT goods and services.
Of that, about $7.2 billion, or 24 percent, goes toward developing e-government,
said Kevin Plexico, executive vice president of Input's government group.
By 2005, the portion spent on e-government will increase to 28 percent
of the government's spending on IT goods and services, Plexico said. That's
an annual growth rate of 10.2 percent for e-government spending compared
with a 6 percent growth rate for federal IT spending overall.
Input forecasts that by 2005, spending on IT goods and services will
increase to about $40.3 billion a year and spending on e-government will
jump to about $11 billion.
The bulk of the spending increase, Plexico said, will be on e-government
services such as Web site development, e-commerce functions and Web-based
enterprise resource planning. This means making agency operations — such
as personnel, payroll and travel — available to employees via the Internet.
Another big chunk of the spending will be on telecommunications, Plexico
The government's shift toward e-government is occurring at a slower
rate than the commercial sector's shift to e-commerce, Plexico said. The
lack of guaranteed solutions regarding privacy and security is a major factor
slowing progress on e-government, he said.
Although banks, credit card companies and retailers increasingly operate
online, "the government has to address privacy and security problems that
are unique," he said. The damage that could be done with personal information
gleaned from electronic tax returns, Social Security forms and other government
documents could be far greater to individuals than the damage from stolen
credit card numbers, he said.