Civic Tech Spending in US to Reach $6.4 Billion in 2015


A new report from IDC, sponsored by Accela shows that civic technology is playing a bigger role in state and local government. Funding for organizations and startups is expected to hit $6.4 billion next year, out of a total spend of $25.5 billion on external IT. Civic technology spending is also expected to grow 14 times faster than spending on traditional IT from 2013 to 2018.

According to data from the Knight Foundation included in the report, the number of organizations dedicated to civic technology grew 23% from 2008 to 2013 and that private and philanthropic investment in these organizations between 2011 and 2013 amounted to $431 million.

Spending on civic tech is being driven by citizen desire to have more information and interaction with government but through technology driven experiences like applications or websites. Citizen’s also want to be able to access all of the information they need on demand – another reality that is best suited to a technology based experience over a more traditional trip to the county extension office. The report also urges a change in how government typically accesses technology by pushing for the adoption of turnkey solutions instead of crafting a customized option.

Civic accelerator programs are also gaining steam. CivSource has reported on government-backed efforts like those in Philadelphia, as well as non-profit versions like Code for America’s accelerator program and Tumml. The report notes that the structure of an accelerator program may benefit development of applications and other solutions. In the case of Philadelphia, accelerator organizers there noted a specific desire to support development that is commercially viable with the hope that applications and other services will remain over the long haul versus hackathon style development, which often results in half done applications that are one-offs.

Further evidence of the growth of civic tech is the development of more traditional private financing structures like the recently announced $23 million Govtech fund, which is backing civic tech ventures. More mature startups in the space are also gaining interest from outside investors. Earlier this week, Socrata announced a $30 million funding round led by Sapphire Ventures. ThreatStream a provider of threat intelligence, that works with government among others, also completed a $22.5 million round led by General Catalyst Partners yesterday. Watch this space.