A New Report on Contribution of ICT To Economic Growth

I am excited to be releasing a new report today on the role and impact of information and communications technologies (“ICT”) in the American economy, and evaluates the likely effects of several current policy proposals and choices that involve ICT. This study includes both the reviews of the existing literature in this area as well as new analysis of the economic impact of ICT. Our critical findings include the following:

• In 2009, ICT firms contributed about $1 trillion to U.S. GDP, or 7.1 percent of GDP. This total includes nearly $600 billion in direct contributions from their own operations and more than $400 billion in indirect contributions through the benefits other sectors derived from the use of ICT.

• ICT companies accounted for 3,535,000 jobs in 2009. While total ICT employment declined since 2000, average compensation has risen sharply. In 2009, the compensation of full-time ICT employees averaged $107,229, 80.6 percent higher than the average for all full-time workers. From 1991 to 2009, average compensation in the ICT industry increased 162 percent, the fastest income gains of any U.S. industry.

• From 1991 to the present, ICT firms have contributed directly an average of $577 billion per-year in value-added to America’s GDP. These direct contributions were equivalent to nearly one-third of the value-added provided by all manufacturing.

• According to an analysis by Federal Reserve economists, the use of ICT accounted for 28 percent of all U.S. productivity gains from 1995 to 2001, capital investments in those technologies explain another 34 percent of those gains, and changes in the organization of firms and worker training in response to ICT innovations accounted for another 10 percent of productivity gains.

• From 1991 to 2009, full-time ICT workers experienced larger wage and compensation gains than workers in any other sector, and the average compensation of ICT workers in 2009 was more than 80 percent higher than the average for all other private-sector workers.

• ICT’s direct contributions to GDP have increased nearly 25 percent since the 1990s, growing from 3.4 percent of GDP per-year in 1991-1993 to an average of 4.2 percent per-year over the years 2005-2009 – gains unmatched by any other industry.

And of course there is much more.  To see the whole study go to http://www.sonecon.com/docs/studies/Report_on_ICT_and_Innovation-Shapiro-Mathur-September8-2011-1.pdf.  And feel free to let us know what you think.