The Us Software Industry As An Engine For Economic Growth And Employment

Download or read book The U.S. Software Industry as an Engine for Economic Growth and Employment written by Robert J. Shapiro and published by . This book was released on 2015 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study is part of a long line of analyses in assessing the direct and indirect economic benefits of information and communications technologies, focused on the software industry rather than the overall ICT sector. To assess the software industry's general economic impact, we use the Input-Output tables of the Bureau of Economic Analysis (BEA) to track the direct value created by the industry in recent years and the flows of goods and services between the software industry and other industries. This analysis highlights both the industries on which the software industry depends and the industries that depend on software. In addition, the study assesses how software affects the operations of other industries by tracking and estimating the share and value of the output of other industries that can be attributed to productivity gains produced by their use of new software. For example, from 1997 to 2012, software industry production grew from $149 billion to $425 billion; and since this growth outpaced the rest of the economy, the software industry's direct share of U.S. GDP increased from 1.7 percent to 2.6 percent, or more than 50 percent. The use of software also has increased the productivity of other industries, thereby contributing to the growth of their production. Analysis shows that software accounted for 12.1 percent of all U.S. labor productivity gains from 1995 to 2004 and 15.4 percent of those gains from 2004 to 2012. On this basis, we calculate that software accounted for 9.5 percent of all gains in U.S. output from 1995 to 2004, and 15.0 percent of those gains from 2004 to 2012. In 2012, therefore, software and the productivity gains it provides accounted for $101 billion in production by other industries. All told, the software industry in 2012 contributed $526 billion to GDP -- $425 billion + $101 billion -- or 3.2 percent of GDP. We also estimate the impact of software on investment, employment and wages.