Tracking the Growth of the Software Industry Recently, Software.org commissioned The Economist Intelligence Unit (EIU) to complete a study tracking the growth of the software industry…
Following the growth of the software industry
Recently, Software.org commissioned The Economist Intelligence Unit (EIU) to complete a study tracking the growth of software's economic impact in the United States. This comprehensive analysis of software's impact on the US economy concluded that software contributed more than $1.14 trillion to total US value-added GDP, which represented a 6.4% increase over two years.
Software around the world has added incredible value to individuals and businesses, but its economic impact has not been measured. While we have seen many gains in artificial intelligence, cloud computing, and IoT, the numerical value of these advances has not yet been comprehensively demonstrated. Therefore, the aim of the study was to quantify the role of the software industry, show its economic growth over time, and show the expanding benefits of software development.
To conduct the study, the EIU collected and analyzed the most recent data available from sources such as IMPLAN, the National Science Foundation, the US Bureau of Economic Analysis, the US Bureau of Labor Statistics, the US Census Bureau and the EIU itself.
The Growing Economic Impact of $1 Trillion Software
The study's key findings include:
The software industry adds more than $1.4 trillion per year to the US economy ($564.4 billion in direct value added + $575.5 billion in indirect and induced effects) . From 2014 to 2016, the direct value-added contribution to the US economy increased by 18.7%.
The software industry was responsible for more than 10 million jobs in the US. There are 2.9 million direct software jobs, and for every job created by the software industry, an additional 2.6 jobs are supported by the industry (think designers, project managers, administrative positions, etc.), which means about 10.5 million jobs in total. In 2014, there were 2.5 million direct jobs in software, which means an increase of more than 350 thousand jobs in the last two years.
All US states see benefits. Software drove growth in all 50 states, and in almost every one of them there was a 10% increase in direct value-added GDP from the software industry. In some states, such as Idaho and North Carolina, there was an increase of more than 40% in value-added GDP.
More investment, more innovation . More than half of all US economic growth since World War II can be attributed to innovation, which is why investment in research and development (R&D) is crucial.
What does this mean for companies
This study was limited to the US only, so we can only imagine the magnitude of the software industry's global impact. This research shows that the software industry not only helps increase GDP, but also helps create jobs in various sectors. Furthermore, the outcome of software R&D can mean life-saving technologies that improve the daily lives of people around the world.
The study aims to show innovative leaders the economic stimulus that the software industry offers. The direct and indirect value of the industry highlights how valuable software R&D is and why policymakers should strive to continue its growth.
Software not only improves our everyday lives (through smartphones, apps, etc.), but also helps companies make better decisions using data. From healthcare to finance to manufacturing, there is no industry that software does not address. For companies and policymakers, this study highlights the importance of investing in software. The benefits of doing so are staggering, which is why software innovation must continue to be a priority for industry executives and decision makers.
Source: BairesDev
