Communications of the ACM
Software Industry Supports 10 Million u.s. Jobs, Over $1 Trillion Impact
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Software's economic impact in the United States is surging — adding $1.14 trillion t0 the U.S. GDP, supporting more than 10 million jobs, and propelling the economy in all 50 states. These are among the key findings in "The Growing $1 Trillion Economic Impact of Software," which tracks the growth of software's impact on the U.S. economy and demonstrates how software provides a powerful spark across the country.
Among the report's key findings: Software's direct economic impact grew by 18.7 percent in the past two years while the U.S. economy grew 6.7 percent. In addition, the report shows how software jobs are surging across the country — with states like Kansas and Indiana outpacing all others.
These results, and other important details highlighting the importance of the software industry can be found in the latest from Software.org: the BSA Foundation.
The report's other key findings include:
- Software contributed more than $1.14 trillion to the total U.S. value-added GDP in 2016 — a $70 billion increase in the past two years.
- Software is a powerful job creator. The industry directly employs 2.9 million people in the U.S. and supports a total of 10.5 million U.S. jobs through indirect and induced impacts. Those numbers are up 14 percent and 6.5 percent, respectively, since 2014. In comparison, U.S. employment grew 3.9 percent from 2014 to 2016.
- Software drives growth in all 50 states. In 35 states, value-added GDP directly attributable to the software industry grew more than 20 percent in 2016 — with Idaho and North Carolina up more than 40 percent.
- Software industry employment is growing fastest in some unexpected places. Kansas, Mississippi, Indiana, Idaho, and Louisiana led the way in 2016, with direct software employment in Kansas and Indiana growing more than 30 percent.
- Growing software investments in innovation will continue to drive economic benefits. The software industry invested more than $63 billion in research and development in 2013 (the latest year for which data was available), compared to $52 billion in 2012, representing a sizeable 21 percent increase.
This year's report incorporates data and analysis from The Economist Intelligence Unit and builds on a 2016 report that explored the state of the industry in 2014.
"This year's report not only quantifies the breadth and depth of software's impact, but also allows the first-ever comparison of how our industry is growing," says Victoria Espinel, president of Software.org: the BSA Foundation and president and CEO of BSA | The Software Alliance. "These gains extend far beyond the software industry; they create a ripple effect that magnifies opportunities and job growth in every industry across the country."
In addition to tracking software's effect on the broader U.S. economy, the report looks at state-by-state data. In each — regardless of how big or small, rural or urban — software innovation contributes a significant economic impact by boosting employment, lifting wages, and driving investments in local research and development.
Taken as a whole, Software.org hopes this study will help policymakers and thought leaders better understand the magnitude of the widespread benefits a thriving software industry delivers. At the state level, the data give leaders a better sense of the impact of their technology initiatives and help them focus more precisely on the pragmatic policy choices that advance software-enabled gains.
"The continued growth, vitality, and innovation of the software industry depends on policies that encourage continued innovation and investment," says Chris Hopfensperger, executive director of Software.org: the BSA Foundation. "A thriving innovation ecosystem, in turn, will provide smarter opportunities for growing our economy, protecting the environment, boosting education, and improving public safety."
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