Large IT contracts 'could fuel £20bn UK government tech market'

UK gov tech market will hit £20 billion by 2025, predicts report

Government

The UK's government technology market could be worth as much as 20 billion by 2025, according to a new report that predicts a return to large IT contracts and a short-term boost from Brexit.

The State of the UK Govtech Market report, published this week by investment firm Public, said that government reforms, especially since 2010 after which the Government Digital Service was created, have "seen the UK lead the world in government digitisation".

"No other country currently combines size of market with such a ready public acceptance of the digital world," said authors of the report, Daniel Korski and Alexander de Carvalho.

Growth in the government technology market would be "fuelled by a renewal of large IT contracts, a shift towards procurement from SMBs, investment into emerging technologies applied to public needs, and by the rise of companies whose products enhance not only the lives of the individual but also have impacts which more generally permeate society."

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The authors added that devolution was now bringing opportunities to cities such as Birmingham, Manchester and Bristol, which are showing the way for technology-enhanced approaches to public services.

They were also relatively upbeat about Brexit, saying it presents opportunities and risks. "Even the UK's departure from the EU may herald opportunities, as it will require, to a short deadline, the complete reformation of certain services including rural payments and border control," said the authors.

However, an analyst told IT Pro recently that the government may step away from politically risky IT projects, like the controversial rural payments project, now it is a minority.

"If Brexit leads to a larger rethink of governmental systems, from rural payments to customs arrangements and identification, then it must inevitably drive a significant adoption of new technologies and new suppliers," the report continued.

"If leaving the EU leads to a rethink of procurement policies and regulations, with a preference given to UK firms, then there will undoubtedly be a short-term boost to a sector which is still very UK-based."

But it warned that if this leads to reciprocal barriers for UK startups seeking to enter European markets, then the government "would have to redouble its support for GovTech startups to succeed in non-European markets".

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