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Kiwi govt IT spend to hit $2.6B

Kiwi govt IT spend to hit $2.6B

Software to be the fastest growing IT government segment both locally and abroad.

Credit: Photo 1804908 © Chrishowey - Dreamstime.com

New Zealand government IT spending in 2022 is expected to grow 7.9 per cent year-on-year to $2.6 billion — outpacing the global growth rate average of 6.5 per cent, to US$557.3 billion. 

The bulk of the local spend is set on the IT services segment, which is expected to grow by 7.5 per cent up to $1.1 billion by the end of next year, according to research firm Gartner.  

As a point of comparison, global government IT spending on services has been predicted to grow over the period by 8.4 per cent, to US$203.9 billion.  

The segment with the fastest growth both in New Zealand and globally is anticipated to be software, rising up 18 per cent locally to $840 million and 12 per cent globally to US$151.9 billion.  

The segments not to expect local growth meanwhile are internal services, with a decline of 9 per cent to $102 million; telecommunication services, falling 4.3 per cent to $194 million; and devices, dropping an estimated 2.5 per cent to $193 million.  

Driving this growth on a global scale is the COVID-19 pandemic, according to Gartner research vice president Irma Fabular. 

“Governments will continue to accelerate investments in digital technologies to respond and recover from the continuing evolution of public health uncertainties due to the COVID-19 pandemic,” she said. 

“The disruptions caused by the pandemic have also reinforced a key digital government tenet, which is public policy and technology are inseparable.” 

She also said 50 per cent of government agencies predicted to have modernised their critical core legacy applications by 2025.   

Additionally, Gartner said the pandemic has pushed the need for the adoption of citizen digital identity as a “critical element” to digital government transformation. 

“Digital identity is moving beyond authenticating citizens online and signing remote transactions,” Fabular added. “To raise the chances for greater adoption of digital identity, governments must treat privacy, security and user convenience as critical success factors.” 

If the global 2022 prediction occurs, this will see it surpass the predicted spend of US$482.8 billion for 2021.


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