In response to various factors resulting in both worldwide and localised turmoil and pressures — from inflation to the tech talent shortage — the research firm has predicted that government IT spending will rise to a total of $589.8 billion (£476b~) this year, marking a 7.6% increase over 2022.

“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, regarding the company’s latest forecast.

“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.”

As part of responding to these difficulties, a meaningful portion of governmental IT budgets are suggested to go towards tech modernisation.

“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.

Breaking down the total forecasted spending of $589.8b, around $209b is set to be spent on IT services, $184b on software, $69b on internal services, $68b on telecom services, $33b on devices, and $27b on data centre systems.

At $209b, IT services is the area predicted to have the most money allocated towards it, as compensation restraints and the IT talent shortage become more pronounced challenges for governments across the globe.

However, software is pointed to as the highest growing segment in 2023 ($184b), with a potential 13.5% growth in spending compared to 2022, as governments seek to replace legacy IT systems and software and modernise their tech.

The only area of IT where there’s suggested to be a decrease in spending concerns devices: Gartner forecasts that governments will allocate around $32b towards devices in 2023, marking a fall in spending of approximately 4.6%. In 2022, the money global governments spent on devices was around $32b, which was around 8.7% down from the previous year.

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The tech talent gap and skills shortage is a notable global problem, and one that the UK government isn’t excluded from.

In their report on the Central Digital and Data Office — which leads the digital, data, and technology function for government — the National Audit Office outlined how the worsening skills shortage is threatening government digital transformation here in the UK.

“Many believe the talent is simply not available in the marketplace to achieve the degree of transformation the government needs,” the report stated. “If the current skills shortages persist, government may need to review what activities it can realistically achieve, given the skills it has or can acquire.”