The Local Economic Benefits of the Global Software Business

Posted by Pamela Passman
Corporate Vice President

Creating jobs and speeding economic recovery are top of mind for everyone these days, including those of us in the information technology (IT) industry.  A recently released study entitled “Aid to Recovery:  The Economic Impact of IT, Software, and the Microsoft Ecosystem on the Global Economy,” illustrates some of the ways the industry is doing its part to get the economy growing again.

This study, which was conducted by research firm IDC and commissioned by Microsoft, supports what academics and other researchers have believed for some time:  Innovation and IT are core drivers of economic growth.

IDC found that the global IT industry will create 5.8 million new IT jobs by the end of 2013, a 3 percent annual growth rate – more than three times the growth rate of total employment.  Similarly, IT spending will grow more than 3 percent annually for the next few years, more than three times faster than global GDP.  And more than 75,000 new IT companies will be created by the end of 2013, most of them small and locally owned.

What is fueling the growth of the IT industry?   Software.   A recent academic study found that more than half of the productivity gains in the German economy between 2000 and 2004 were created by software.   Decision makers in business and government understand that investing in software yields substantial returns.  That is why they have continued to invest in software, even during this economic downturn.  IDC estimates that in 2009, employment in the global software industry will grow by 4 percent and software spending will also increase.  IDC expects these trends to continue in coming years, with software creating more and more economic opportunities. 

The story of economic recovery and job growth starts at the local level, and in many communities it is being written to a considerable degree by local Microsoft partners.  The global ecosystem of Microsoft partners and other IT companies employs about 6.1 million people worldwide, generating income for communities in all corners of the world. In 2009, IDC estimates that the nearly 700,000 members of the Microsoft ecosystem will generate revenues of almost $537 billion.  These revenues remain in each company’s local community, where they fuel further growth and fresh innovations.  

IDC’s findings have far-reaching implications that hopefully will generate conversations among citizens, business leaders and government leaders.  For example, how can we work together so that our educational systems are preparing students and workers for the new jobs in IT?  How can we promote a business environment conducive to the rise of new IT companies?  Microsoft and our local partners are committed to helping local communities address these business imperatives and ensuring that individuals and organizations realize the full benefits of software.

The IDC study can be found here.

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