govtech market snapshot
TRANSCRIPT
This report is a current snapshot of our ongoing work at e.Republic Labs. Its aim is to help existing companies, startups, investors and government agencies better understand the emerging GovTech market.
e.Republic Labs, through its parent company, has been tracking digital technology in the public sector since 1987. In the last several years, developments like mobile platforms, ubiquitous connectivity, cloud/SaaS services and data analytics have combined with other trends to drive significant disruption in the government technology market. From open data to civic tech to the Internet of Things, tech and market changes have opened opportunities for a new class of companies and products focused on the $175 billion U.S. government technology industry.
About us e.Republic Labs is part of e.Republic, home to Govtech.com, Governing.com and the Center for Digital Government. e.Republic Labs is a catalyst to help educate, accelerate and ultimately scale technology innovation in the public sector. e.Republic Labs is directed by Dustin Haisler.
Source: e.Republic Labs (2015)
Technology Trends Social Trends
Source: e.Republic Labs (2015)
• Mobile Platforms • Ubiquitous Connectivity • Cloud/SaaS• Big Data/Analytics• Internet of Things (IoT)
• Transparency/Open Gov • Structural Fiscal Constraints• Workforce Demographics• App Economy
Technology and social trends are reshaping the landscape of government.
This is a uniquely disruptive moment in the evolution of technology, offering a once-in-a-generation opportunity for governments both small and large to harness powerful new tools that can dramatically improve public sector outcomes.
Government may not be the natural place you would look to for emerging market opportunities; however, new forces are challenging the way government does business and providing opportunities for companies.
The convergence of technology and social trends is reshaping the government market.
There is a new class of companies and products targeting government as a primary market segment. Equally disruptive, increasing investments from venture capital firms such as Andreessen Horowitz, are accelerating the pace of change by injecting capital into a growing cohort of GovTech companies.
Source: e.Republic Labs (2015)
GovTech companies are firms that have state, local and federal government as their primary market focus and derive the majority of their revenues from the public sector. GovTech companies can be categorized among four domains:
What is a GovTech company?
(1) Administration
(2) ServiceDelivery
(3) Civic Tech
(4) Smart
Infrastructure
Source: e.Republic Labs (2015)
Smart Infrastructure Serves as the infrastructure layer of government by enabling operational capacity of physical assets and systems (e.g., facilities, roads and utilities) through digital controls, sensors, self-monitoring predictive analytics and security. Exemplified by the Internet of Everything, category includes smart grid, smart meter, and the cloud.
Civic Tech Serves as the engagement layer of government by supporting citizen self-services and engagement, using aggregated reporting, open data and crowdsourcing to enable citizens to digitally connect with government.
Administration Serves as the official record layer or ledger of government permissions, data and money in government. Category includes systems that automate financial, personnel, case, asset, traffic, construction and land management records.
Service Delivery Serves as the transaction layer of government by enabling the processing of transactions, payments and logistics by public employees or citizens/businesses to fullfill public service requests and service delivery. Category would include systems that automate licensing, payments and business intelligence of records.
Smart Infrastructure
Civic Tech
Administration Services
External
DeliveryOperations
InternalProductPlatform Solution
Source: e.Republic Labs (2015)
GovTech Market Model
GovTech Market Model
Source: e.Republic Labs (2015)
Smart Infrastructure
Civic Tech
OpenGovStreetline
Accela
Tyler Tech
MuniCode
Pondera
MuniRent
Administration
Services
External
DeliveryOperations
Internal
SeeClickFix
GovDelivery
NIC
Platform Solution Product
Example GovTech Companies
OpenGov enables agencies and citizens to have greater insights into public financial data through the use of online dashboards and reporting tools.
Pondera is a fraud-detection-as-a-service system that analyzes public benefit transactions (e.g., Medicare) and predicts the likelihood of fraud.
Accela offers a civic cloud that connects multiple systems of records (ERP, work orders, etc.) to enable more efficient and effective operations.
Streetline uses a series of Internet-connected sensors to make parking more efficient and predictable.
NuCivic
In addition to the four market domains of Civic Tech, Smart Infrastructre, Administration and Service Delivery, the public sector is made up of large vertical application segments.
GovTech Market Verticals
Operations
Finance
Public Safety
Health & Human Service
Public Works
Information Technology
Source: e.Republic Labs (2015)
Tech and social trends are fueling major shifts in the way governments can engage digital technology.
This market shift is driving the entrance of new companies specificlly focused on the $175 billion government technology market — the GovTech startup.
The GovTech market is expanding around four primary market segments: administration, civic tech, intelligent infrastructure and service delivery.
Venture capital firms, non-profit foundations and angel investors are increasingly injecting capital and resources into this emerging GovTech market.
Key Takeaways
4 4 4 4
Source: e.Republic Labs (2015)
State & Local Government Is an Industry.
Source: e.Republic Labs (2015)
There are over 89,000 local government agencies across the country that are composed of cities, counties, townships and special-purpose government agencies.
# of Cities # of Counties # of Townships
Local Governments
Local Governments
Local Governments
19,422 3,031 16,364
State & Local Government Is an Industry.
Source: e.Republic Labs (2015)
There are over 50,000 special-purpose governments, which include utility and school districts.
# of Special Districts # of School Districts
General Purpose Gov
General Purpose Gov
37,203 12,884
State & Local Government Is an Industry.
Source: e.Republic Labs (2015)
State and local spending have continued to grow as economic conditions have rebounded from pre-recession levels.
State and Local Spending
State and Local Employees
Overall Spending Employees$3 trillion 19 million
Government Information Technology Spending
Source: e.Republic Labs (2015)
1 2
1Center for Digital Government (2015) 2https://www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/budget.pdf
State and local information technology spending accounts for $96 billion dollars of the $3 trillion dollar budget.
State and Local IT Spending
FederalIT Spending
Up 2.5% from 2015
$96 billion $79 billion