Spending by federal, state, and local governments now accounts for nearly 50 percent of GDP in the United States. Regardless of where you fall on the political spectrum, a new economy has set in: “gBusiness,” the intersection of business and governments, has created a $5.5 trillion marketplace.

And with the flow of stimulus dollars, this new economy is evolving quickly. It is no longer just a market for government insiders: Forward-thinking organizations are incorporating the government sector into their overall go-to-market strategy to take advantage of this expanding marketplace.

In 2009, trillions of dollars were spent stabilizing the economy through the Troubled Asset Relief Program (TARP), the American Recovery and Reinvestment Act (ARRA), and other government-funded programs. This trend will continue through 2010 as additional jobs and infrastructure bills are spawned by a Congress looking for immediate wins, bringing huge waves of stimulus funds to infrastructure contractors in 2010.

Onvia data shows that this year will deliver maximum stimulus impact for infrastructure contractors as funds that were obligated in 2009 will finally be awarded to contractors to begin work in 2010. Approximately 23,500 new infrastructure projects valued at $76 billion are in the pipeline now and will reach contractors this year. This will fuel the creation of 480,000 jobs in the construction industry; related jobs will bring the grand total to 900,000.

All of this spending will help fund projects from bridge construction to light rail and Amtrak fleet modernization to fuel-efficient vehicle purchases. Onvia expects competition for these contracts to be fierce as more businesses seek to capitalize on the irresistibly large market created by government spending. And as more companies follow this money, it will remain a buyers’ market as competition keeps a lid on costs.

Infrastructure by the numbers
Onvia recently collaborated with REMI, the recognized authority on economic models, to produce “The Next Economy: 2010 Government Market Outlook.” Top-line findings regarding infrastructure projects include the following:

• $76 billion across 23,500 full or partial recovery-funded infrastructure projects is currently in the pipeline, and these projects are expected to begin in 2010. Recovery dollars are funding projects in conjunction with traditional matching funds, making the total dollars spent even larger.
• Onvia forecasts the creation or retention of 900,000 direct and indirect jobs from ARRA contract spending in 2010 (versus 360,000 in 2009). The Southeast region is expected to produce the most jobs, with the Great Lakes region setting the pace for average salaries.
• Throughout 2009, Onvia analysts found that infrastructure projects came in below estimated costs, driven by stiff competition and falling material prices. Some of the savings served to expand the scope of recovery projects.
• The highway construction market is expected to grow 8 percent in 2010 as only two states had obligated all of their transportation stimulus funds by the end of 2009. With the HIRE Act signed into law and additional legislation to boost jobs pending, an increase to double-digit growth is not out of the question. Unemployment has lowered ridership rates nationwide, lowering funding for transit systems. At the start of 2010, less than half of the approximately $7 billion for transit was under contract, signaling more spending this year.

Capitalize on government infrastructure spending
Right now, government spending is at a record high, and this is not expected to change in the foreseeable future. In fact, half of each dollar spent in the United States is spent by the government. We are witnessing the rapid emergence of a new economy, one where business-to-government solutions remain a robust percentage of GDP.

For business, the debate isn’t about the size of government, but rather how to engage in and influence the gBusiness market. A good place to start is at Recovery.org, the free website Onvia created to help businesses identify where the stimulus money is at every step — from allocation to advertisement, and ultimately to award. Regardless of the method, every contractor and subcontractor should have a strategy for monitoring activity in gBusiness — it will undoubtedly be the largest source of growth opportunities for years to come.

Michael Pickett is CEO of Onvia, a provider of business-to-government solutions. For a complimentary copy of the Government Market Outlook Report and other key findings, please visit the Resource Section at www.onvia.com