Monitoring the Growth of the Software Market
The Economist Intelligence Unit (EIU) was recently commissioned by Software.org to conduct a thorough research project aimed at evaluating the expanding economic impact of software on the United States. The study’s findings showed that software has contributed more than USD 1.14 trillion to the US value-added GDP, reflecting an impressive growth of 6.4% in just two years. This underscores the significant economic advantages that software has brought to the US economy.
The impact of the software industry on individuals and organizations worldwide is indisputable, though its monetary value has been challenging to quantify previously. However, with the advancements in technologies such as Artificial Intelligence, cloud computing and the Internet of Things, it has become feasible to gauge the economic worth of these innovations. This research had three primary objectives: to establish a numerical value for the software industry’s influence; to track the industry’s economic progress over time; and to document the increasing number of sectors that benefit from software development.
To conduct this research, various datasets were collected and analysed, including those from IMPLAN, the National Science Foundation, the US Bureau of Economic Analysis, the US Bureau of Labor Statistics, the US Census Bureau, and the Economist Intelligence Unit (EIU).
Analysis of the Increasing $1 Trillion Economic Impact of Software
Some of the key findings of the study include:
The software industry generates approximately $1.4 trillion in annual contributions to the US economy. The value produced for the US economy between 2023 and 2023 was $564.4 billion, with an additional $575.5 billion resulting from indirect and induced effects. Direct contributions to the US economy increased by 18.7% over the same period.
The software industry is responsible for creating over 10 million jobs directly in the United States. The UK economy is heavily reliant on the software industry, providing employment to an estimated 2.9 million individuals within the sector, along with an additional 2.6 million individuals who work to support these roles. This is an increase of almost 350,000 employees since 2023, with a total of 2.5 million people employed directly in the software industry by the end of that year. These positions span various areas, including design, project management, administration, and more.
Benefits are prevalent for every state in the US. The software industry generated growth in all fifty states in the US, resulting in a 10% increase in direct value-added Gross Domestic Product (GDP) in nearly all of them. Idaho and North Carolina saw a substantial increase in value-added GDP of over forty percent, in particular.
Increased funding leads to greater creativity. Over half of the growth in the US economy post-World War II can be attributed to innovations, underscoring the significance of research and development spending.
Implications for Businesses
Although this study focused exclusively on the USA, it is likely that the software industry’s impact on a global scale is even more significant. The study’s findings suggest that the software industry has a favourable impact on national economies, producing a diverse range of new employment opportunities. Furthermore, continued research and development in software may result in the creation of life-saving solutions that enhance the quality of life of individuals across the globe.
The purpose of this investigation is to demonstrate to decision-makers the significant impact that the software industry has on the economy. Considering both its direct and indirect contributions, it is advisable for authorities to encourage the advancement of software research and development.
The numerous benefits of using smartphones, apps, and other types of software in our daily lives are apparent. Additionally, this technology can serve as a powerful tool for businesses, enabling them to make more informed decisions across a range of sectors, such as healthcare, banking, and manufacturing. It is therefore crucial for business leaders and decision-makers to remain informed regarding the findings of research on the advantages of investing in software. Such investments can have a significant and broad-reaching impact, necessitating their prioritization.