2020’s Biggest State and Local Contracting Growth Areas

Posted by Nick Schiffler on September 24, 2020


The state, local and education (SLED) government market provides close to 500,000 competitive opportunities for companies each year, measuring more than $1.5T. This market includes a wide range of purchase types, payments and expenditures on goods and services - ranging from technology to professional business services to construction – and some of these purchase types are experiencing much more growth than others.

If you’re interested in learning about the 10 fastest growth areas in government contracting, you can find an easy-to-read breakdown in this infographic drawn from GovWin’s 10 Hotspots in State & Local Government Contracting for 2020 research report.

2020 State and Local Contracting

2020 has seen a state and local contracting market that has been profoundly impacted by the effects of COVID-19, causing various products and services relevant to different areas of the pandemic response to see a spike in growth. The growth areas outlined in this article, and in the infographic and report above, are more the result of longer-term trends that have culminated in higher growth rates overall.

The top 10 growth areas come from a variety of different industry segments. Below we have highlighted some of the top focus areas and the ways in which they are experiencing growth.

Technology Contracting

SLED governments spend more than $100 billion per year on technology, which is growing at a modest pace of 4-5% each year. But growth is never even across the segments, and there will always be a large market with steady, incremental demand offset by a few high-priority segments with much faster increases. The hotspots of artificial intelligence, cloud computing and mobile applications – frequently topping the annual list from the National Association of State CIOs (NASCIO) - represent this group. These categories are not “new” but they have all seen a recent uptick in demand – attributed to a wider market, continued evolution in products and further pressures for governments of all sizes to seek efficiency and ROI with their tech investments.

Workforce Solutions

The “silver tsunami” of retiring Boomer generation public sector staff is a particularly challenging issue for SLED governments – which makes recruitment and retention more important than ever. Another related problem is the difficulty in finding and retaining highly skilled tech workers, who are often lost to the private sector. Two of the hotspots relate to IT staffing services and HR software platforms that enhance various functions such as recruitment and staff training.

Education Contracting

A healthy, sustainable community must offer high quality K-12 education that prepares children for the demands of the future workforce. School districts have been under pressure to meet newer performance and testing standards of the Every Student Succeeds Act (ESSA) as well as the inclusion requirements of recent disabilities legislation. This translates into greater demand for teacher training, learning management software and school or district-level evaluation services.

Strategy/Decision Solutions

Market research bridges the areas of citizen engagement and strategy - reducing risk while involving average people in important decisions. The idea of using surveys and focus groups in government is not new but demand has been rising thanks to growing urban complexities and the requirements of the Smart Cities movement for citizen input.

Transportation Contracting

In transportation, concern for the environment has helped drive sales for electric vehicles (EVs) in recent years. One of the constraints on further expansion has been a lack of EV charging stations, which is the subject of one of our fastest growing hotspots. Another hotspot deals with the concept of “micromobility.” Increased demand for bike lanes as well as bicycles and scooters helps provide pedestrian and bicycle-friendly urban corridors to support livable, sustainable communities.

Energy Solutions

Pressure for sustainable or carbon-neutral energy consumption has led many SLED governments to increase use of renewable resources. This includes installing solar arrays on buildings and structures.

Want to get access to more details on each of these focus areas, plus a detailed look at how quickly the top 10 growth areas in state and local government contracting are expanding? Download a free copy of the 10 Hotspots in State & Local Government Contracting For 2020 report to discover the top trends and how they relate to market changes.

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