2011 Government Market Outlook
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Presentation that I gave to the WTIA on the outlook for the government market in 2011
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2011 Government Market Outlook
- 1. 2011 Government Market OutlookFebruary 1, 2011 Henry Chou
- 2. Discussion Topics 2010 Year in Review 2011 State and Local Outlook Information Technology Sector Clean Energy Sector
- 3. About Onvia Leading provider of gBusiness solutions in US Largest public sector procurement database 7,000 clients who sell to government, subcontract or supply Actionable sales leads to custom market research eProcurement Platform – 6,000 government users Founder of Recovery.org Primary markets Architecture/Design, Engineering, Construction (Infrastructure) Operations & Maintenance Energy/Environmental/Water Information Technology/Telecommunications Medical/Healthcare Vehicles/Equipment Professional Services
- 4. Trusted Information Source Authority on gBusiness marketplace
- 5. 2010 Year in Review Total estimated gov’t spending of $5.5 trillion Massive infusions of federal cash at state and local levels to try to stabilize economy Second full year of trillion dollar stimulus efforts Breakdown of non-security discretionary spending
- 6. 2010 ARRA Spending Majority of dollars still unspent Investment portion of package has moved far more slowly than expected Only 30% has reached the contractors and subcontractors that perform the work ~$120B of stimulus remains unspent Expect remaining funding to go to longer-term infrastructure and energy projects
- 7. Government spending will continue at record levels Remains largest purchaser of goods and services State Most forecasting more money to spend in 2011 (NCSL) Washington 1 of 3 states expecting revenues to increase more than 10% Local Struggling housing markets, slow consumer spending, and high unemployment driving declines in revenues(NLC) Will be slower to recover because of lag in property tax assessments 2011 OutLook Strengthening economy signals improved gov’t budgets
- 8. ARRA WILL REMAIN CATALYST IN 2011 Long tail of expenditures through 2016 2010 dollars mostly went to public sector jobs and programs Focus shift from “shovel ready” to “job ready” Creation of long term private sector jobs rather than temporary or public sector jobs
- 9. 2011 Technology Investment Areas Continued investment in industry IT is a key driver of the next economy Growing focus on healthcare IT 17.5% CAGR through 2014 (BCC Research) State health information exchanges Priority initiatives Consolidation/ Optimization (Virtualization, Cloud Computing) Broadband access Cybersecurity
- 10. Washington - IT/Telecom Market Onvia tracked 976 opportunities in 2010 Expect similar level of activity in 2011 Significant opportunities at the state/local level IT Telecommunications 9% Year-Over-Year (YOY) Growth -15% +2% # of Purchasing Events +6% -6% +20% 2006 2005 2007 2008 2010 2009 Source: Onvia 2011
- 11. Washington - IT/TeleCOM Market 2010 Sub-Market Breakdown Of 3 biggest sub-categories, wireless communications is a specific area of opportunity Source: Onvia 2011
- 14. Clean Energy Market Continued investments to advance clean energy in 2011 Clean energy was largest portion of ARRA directed towards infrastructure improvements Continued deployment of smart-grid technologies from ARRA investments Less capital intensive solutions will grow at faster rate – solar vs. wind
- 15. Renewable energy 80% of electrical power from renewable sources by 2020 Goal of creating 25,000 jobs in clean energy by 2020 Electric vehicle infrastructure Recharging stations along I-5 corridor ARRA $2.6B in funding for selected DOE projects 175 DOE projects in WA Washington - Clean Energy Market Onvia tracked 165 opportunities in 2010
- 16. Washington - Clean Energy Projects
- 17. Washington - Clean Energy Top Agencies and Vendors Top State/Local Agencies City of Tacoma Chelan County Public Utilities District #1 City of Seattle Snohomish County Public Utility District #1 Washington State Department of General Admin Island County Fire Protection District Seattle Public Schools Bellingham School District 501 City of Bellevue Awarded Vendors NAES Power contractors Quantum Engineering and Development, Inc. McKinstryEssention Inc. Voith Hydro, Inc. CMEC Arc Electric JV LLC ABB Siemens Industry & Energy Inc.
- 18. Thank You Henry Chou AVP Product Onvia, Inc. 509 Olive Way Suite 400 Seattle, WA 98109 hchou@onvia.com www.onvia.com www.recovery.org
Notas del editor
- Delighted to come here to speak with all of you today.I think that you are going to find that my comments are going to echo some of what you heard from Congressman Inslee as well as Kevin from Input.Will cover two areas that I think will be of particular interest to members of this audience
- Plan, Market Sell to gBusiness SectorEverything from actionable sales leads to market research around market sizing and competitive research
- National Media have often sought us out for our expertise, especially in last two years as the face of recoveryData engine that powers MSNBC stimulus tracker
- Started in 2008 with TARP and continued in 2009 with the ARRAOver the last couple of years, we have certainly seen more business have moved into the government space making it more competitiveChart shows breakdown of non-security discretionary spend
- Large parts of the $787 billion federal stimulus package to help the U.S. economy Tax cutsAid to states and the unemployedInvestments in infrastructure, health care and other areasOnvia tracks the portion of the package (~$275B) that was set-aside for private sector projectsInvestment spending has moved far more slowlyWhether you agree with it or not, we believe the stimulus package will continue create a lot of opportunities for businesses
- NCSL – National conference of state legislaturesNLC – National League of CitiesThe FY 2011 Federal Budget kept discretionaryspending flat at $1.4 trillion (40% of total). Non-Security spending was cut to $520 billion. (Source: OMB Table S-4) The worst effect of the FY 2011 budget was its unprecedented $1.3 trillion deficit.Need to form more public-private partnerships.
- We believe that the federal government will remain a significant catalyst for economic recovery in the coming year as ARRA dollars continue to reach states and cities.
- In 2011, we expect to see government spending grow in the areas of information technology, energy and environment, health care and cyber-security. Elsewhere, spending will probably grow at a very low rate, but negative growth is unlikely. IT is a key driver of next economyOnly 25% of technology spend is represented in budgets. Spending spinoffs is massive. Healthcare, energy, intelligent transportation"Focus message on cost savings, efficiencies and simplification. Agencies are under pressure to cut costs.
- IT represents 9% of the activity that we tracked
- Of the 3 largest
- Recently Washington received $244 million to subsidize the deployment of faster broadbandWashington below national average for % of connections > 10 mbps (7.4%)Broadband used for Delivery of services to increase efficiencies and lower costs.Tele-health applications
- Clean energy was largest portion of ARRA appropriations directed for innovative infrastructure improvementsEnergy projects encompass wide range of product and service needs (generation, metering, automation, data centers). Opportunities for all kinds of businesses.
- “As a global leader in technology, aerospace, life sciences, clean energy and other 21st century industries, Washington state is well-positioned to compete and win in the new, global economyAt the state level, we have taken steps to accelerate our transition to a clean energy future. We have adopted statewide targets to reduce greenhouse gas emissions, and clean energy standards for electrical power and vehicles and to build greener, highly efficient buildings. Tax incentives and public investments have been put in place to support these initiatives and help drive innovation and private investment in clean energy.Washington recently announced a new "electric highway" - a network of public-access electric vehicle recharging stations that will extend the range, utility and practical market access for electric vehicles along the I-5 corridor from Canada to Oregon. Additionally, the citizens of Washington State enacted a law to require, by 2020, an additional 15 percent of electricity generation from renewable energy - from wind, solar, bioenergy or other sources. This requirement is separate from and on top of our current hydropower base. In total, we are on course to have over 80 percent of our electrical power from clean, renewable sources by 2020. Two-thirds of the state's electrical power is generated by hydropower. That said, smart grid researchers and engineers at Pacific Northwest National Labs and the Bonneville Power Administration as well as our local utilities and private companies are working together to ensure that as more energy from renewable sources comes online, we'll be able to plan for and effectively integrate that new green power into our transmission grid.Our focus on clean energy and green technology attracts businesses interested in helping the world become less energy dependent. With their new Washington state facility, BMW and partner SGL, will integrate carbon fiber material into basic automotive manufacturing for the first time. In 2001, we produced virtually no wind power in Washington State. Today, Washington is fourth among American states in the production of wind power.