standard GIS Industry Trends and Outlook

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GIS industry trends gain be gleaned by surveys and other reports produced by market research companies.  While most of these reports can only be fully read after purchase, the executive summaries allow for an overview on the state of the GIS industry.

The GIS Industry according to Daratech, a GIS research firm, grew worldwide 10.3% in 2010 to US$4.4 billion with a forecast of an additional 8.3% growth to almost US$5 billion  in 2011. According to a new report on the GIS market (Geographic Information Systems (GIS): A Global Outlook released January 2012) from Global Industry Analysts, Inc (GIA), the GIS industry is expected to growth to a worldwide to US$10.6 Billion by 2015.

Despite the predicted gains, growth in the GIS industry hasn’t been a steady increase as noted by the GIA report:

The healthy growth posted by GIS industry was however interrupted by the global economic crisis during 2009-2010. European governments stopped purchasing GIS technology during the period in anticipation of low tax collections. Meanwhile, the North American GIS market remained comparatively strong, largely due to the efforts of governments to improve homeland security. Expenditures on GIS technology however, rebounded significantly in 2010.

GIS is still a major growth industry and while individual agencies may have staff freezes or layoffs, the rate of adoption of geospatial technology by new agencies continues to grow.  In addition, there is a strong consulting segment that continues to grow in order to supply supporting GIS to those agencies.  Adoption by commercial enterprises especially in the journalistic, real estate, and retail industries continues to expand greatly.  As Charles Foundyller, Daratech’s CEO states, “Demand for GIS/geospatial products is driven by an increasing global need for geographically correlated information. As more and more websites, such as Google Earth, and consumer navigation systems, such as TomTom, bring awareness of the power of linking business and consumer information with their geography, geo-enabled apps will become the norm.

Obstacles to continued growth the GIS industry are outlined in the GIA report are summarized:

Despite the immense popularity garnered over the past few years, certain issues continue to hinder market growth. Integration of the technology with cloud technologies remains one of the major challenges for the industry. A major factor hindering growth of the GIS industry is the high cost associated with the technology. Although, prices have declined in the recent past, the technology is still considered to be expensive for smaller companies. Going forwards, as the significance of geospatial technologies and content increases, conventional markets such as governance and infrastructure sectors would continue to strengthen. Defense is expected to remain the single largest market for geospatial technologies while demand from infrastructure development sector is also expected to grow.

According to Daratech which published its GIS/Geospatial Market Report in 2011, the largest demand is for GIS data, which has grown at a compound annual rate of 15.5 percent for the last eight years.  Global sales to governmental agencies remains strong with an 7.2 percent compound annual rate over the last 8 years.  Of those sales, local government drives the majority of growth as compared to regional and state level government sales.

GIS Employment Outlook

The Bureau of Labor Statistics provides freely available industry specific employment statistics as part of its Occupational Outlook Handbook.  As part of the 2010-2011 Handbook, the BLS recently deemed that those with GIS related skills have “favorable job prospects” and that employment in those sectors is expected to grow “faster than the average for all occupations”.  Jack Dangermond, the president of Esri, the leading GIS software company, recently wrote an opinion piece on the positive outlook for careers in the GIS industry, stating that despite the economic downturn, “demand for geospatial technology professionals has grown significantly“.  In backing up his piece, he cited statistics from the US Department of Labor’s High Growth Industry Profile – Geospatial Technology report which noted that the geospatial market is “growing at an annual rate of almost 35 percent, with the commercial subsection of the market expanding at the rate of 100 percent each year.”

GIS is still continuing to emerge and expand into other markets.  Visible and easy to use geospatial technology such as Google Maps, the dominance of location based services on smartphones and tablets, and the proliferation of mapping in media especially during times of natural disasters (think of all the maps and geographic information that proliferated during the Japanese earthquake and tsunami as a recent example) are all helping to proliferate the use of GIS.  Also helping to push GIS forward is the emergence of crowdsourcing geographic data such as the OpenStreetMap project and Google’s MapMaker.  For example, Nokia recently announced its own crowdsourcing effort.  Open MapQuest is also gaining acceptance, especially in light of Google’s pricing structure for high volume Google Maps usage.  The ability to visualize geographic data is becoming a standard and required part of many businesses.  Can you imagine trying to launch a successful real estate tracking app without mapping services embedded within it?

Growth areas for the GIS Industry in 2012 are:

  • The adoption of HTML5 as the preferred technology for online mapping.
  • Open source GIS will continue to grow and start to take its place among the commercial options as preferred desktop, mobile, and online mapping software.
  • GIS will move beyond the simple display and query of online mapping and companies will debut technology that provides more analytical and data processing capabilities via the cloud.

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