Despite the current market Under the circumstances, investors have saved a record amount of capital – an estimated $230 billion in dry powder. They just need to find the right place to put it in.
Despite the gloom, doom and race for returns, one sector is too often overlooked by investors where backing technology will deliver returns regardless of the state of the economy: government spending in technology.
In addition, much of government spending is focused on areas of critical importance to society, such as climate science, disaster management, health care, national security and education.
The United States is currently in its most significant funding spurt since World War II. It’s a Marshall Plan spending program for domestic technological innovation, and most investors aren’t paying attention. In fact, the total amount of government spending, adjusted for inflation, is 130% higher than the total amount America spent on World War II.
States are seeking, and in some cases needing to broaden their perspective and find solutions to the problems that the previous generation has not been able to solve.
For decades, however, sector-focused investors have ignored or fooled the public sector for being unable to tailor their innovation to its needs. The lack of product-market fit coupled with a lack of understanding of the inner workings of government has inhibited real innovation and walled in billions of dollars of opportunity.
The key to unlocking these resources is understanding investment priorities and how to access them.
The biggest mistake investors make is focusing so much on the federal government that they can’t see the bulk of federal spending flowing through states. For example, the response to the COVID-19 pandemic and the Infrastructure Investment and Jobs Act together amount to trillions of dollars.