Spending by the federal government on information technology will increase gradually over the next five years as most departments and agencies focus on replacing and refreshing necessary operational IT infrastructure systems, according to a forecast released yesterday by the Information Technology Association of America (ITAA).

In the second day of the 44th annual Vision Conference, IT and electronics industry leaders said that non-defense federal government spending is projected to increase by a compounded annual growth rate (CAGR) of about two per cent between fiscal years 2009 and 2014 in constant FY09 dollars.

Most of this growth is predicted to come in later years and will be concentrated in a few departments including Health and Human Services, Homeland Security, Treasury and Veterans Affairs. The forecast is considered reliable no matter which party leads the new Administration, given the budget constraints that President Bush’s successor will face.

Speakers emphasized that, despite only modest increases in spending, there will be many opportunities for industry to partner with government agencies. “Cyber security and information assurance will receive increased attention, becoming mission-essential rather than nice-to-have,” said Dan Heinemeier, COO, executive vice president and head of the ITAA’s GEIA Group. “Other priorities will include implementation of voice over IP, email & messaging upgrades, secure web portals, and other tools to serve citizens better.”

The forecast also found that the federal government will seek bundled solutions for business processes free up budget for core mission activities.

The annual forecast is one of the longest continuously produced, independent assessments of future defense and federal government spending in the U.S. Results are based on qualitative and quantitative analysis involving more than 200 industry members. Their initial hypothesis and straw-man forecasts are then shared with defense and military leaders, congressional staff members, industry analysts and think-tank experts through hundreds of interviews.

The Vision Conference is hosted by ITAA’s GEIA Group, reflecting ITAA’s merger with the Government Electronics and Information Technology Association earlier this year. Details on the conference are at www.itaa.org/events/event.cfm?EventID=2272.