At over $1.5 trillion, the U.S. state, local and education (SLED) government market typically provides close to 500,000 competitive opportunities for companies each year. This market includes a wide range of purchase types, payments and expenditures on goods and services—from technology to professional business services to construction.
Each year, GovWin from Deltek puts together a research report, 10 Hotspots in State and Local Government Contracting, to identify the “hottest” areas in this complex market. In preparing this year’s edition of the Hotspots report, we sifted through thousands of industry sectors and identified 10 products or services that are experiencing much faster growth in usage or adoption by SLED governments - based on factors like new technologies, new standards and the ongoing coronavirus pandemic.
After examining each of our 2022 hotspots and analyzing common elements and issues, our analysis revealed the following seven major themes:
One of the most pressing worries of the pandemic, including for government, has been the return of high inflation and its negative impact on purchasing. This is addressed by our #1 hotspot of “Managing Inflation in Building Costs.”
By 2021, the labor market disruptions from the pandemic encouraged a greater use of machines to replace certain human tasks, as described in the “Relying on Robots & Drones” hotspot.
With the immediate “crisis” mentality of 2020 over, the SLED market has transitioned to longer-term planning, forecasting and “solution seeking” consulting, as seen in our hotspot of “Positioning for Long-Term Success.”
Between the initial furloughs and greater use of remote workers, the pandemic has altered the government workplace in several ways. Our hotspot for “Enabling the Hybrid Work Environment” covers the trend of more state and local government contracting for computer equipment for home and on-premise work, while our “Addressing Operations & Staffing” hotspot touches on the challenges of hiring and retaining staff.
Well-Being & Equity
Experts agree the stress of the pandemic has negatively affected personal well-being and equity. This theme can be seen in several hotspots including 1) growth in counseling and substance abuse programs in “Strengthening Mental Health,” 2) the focus on protecting women and minorities from violence in “Promoting Equity & Inclusion,” as well as 3) the increased focus on healthy lifestyles noted in “Designing Parks.”
School districts have been responding to the fact that the disruptions caused by a season of remote learning negatively impacted student learning and growth. Our hotspot of “Closing Learning Gaps” (including various areas related to student improvement) addresses this trend.
The ongoing concern for sustainability and protecting the environment can be seen in two hotspots. “Adopting Green Fleets” examines recent growth in electric and hybrid vehicles. “Designing Parks,” in addition to the health benefit, was boosted based on the recent focus of using these parks and greenbelt areas to help mitigate climate change through “carbon sequestration.”
To read more on the latest trends in the state and local market, download a free copy of GovWin’s 10 Hotspots in State and Local Government Contracting for 2022 report.
Paul Irby is a Principal Research Analyst for GovWin from Deltek. Follow them on Twitter and LinkedIn and stay up to date with the latest government market insights.