Technology spending to accelerate over next 5 years.

After a period of budget shortfalls, a new report by independent market analyst Datamonitor indicates that U.S. state and local governments will increase their technology spending over the next five years. The report, "IT Opportunities in State and Local Government," says the increased technology spending will be driven by the need to improve constituent services, reduce costs, and increase internal efficiency.

According to the report, IT spending by state and local governments is expected to rise from $55 billion to $62 billion by fiscal year 2009. This total includes both external spending on IT contracts as well as spending on internal technology items such as IT staff and office equipment.

The report discusses a number of technology trends, in particular increasing investment in technology to support public safety and social services functions, a shift in focus toward software and services, and renewed interest in IT consolidation.

"State and local governments are investing in technology in response to public and media attention on their capabilities to handle emergency situations and support community protection on an ongoing basis," said Kate McCurdy, public sector technology analyst with Datamonitor and author of the study. "In addition, technology offers state and local governments opportunities to reduce the administrative costs of social services while also improving employee productivity and accuracy."

Datamonitor anticipates that state and local governments will increase their investment...