Importance of ICT

Direct ICT spending is an important component of world economiesBecause ICT is not yet a widely used term in the U.S., and because the U.S. does not account for economic or industry activity under that category, it is difficult to accurately quantify the value of ICT in the U.S. economy. Even so, direct ICT spending is clearly a very important part of the U.S. and world economies.

  • In the U.S.: "ICT industries remained strong, rising 9.0 percent. These industries accounted for 4 percent of GDP, but accounted for 30 percent of real GDP growth in 2008."

  • In the EU: “The Information and communication technologies (ICT) sector accounted for a substantial part of EU GDP and employment. However, ICT is a ubiquitous technology and investments in ICT are also estimated to have been responsible for around half of the EU's productivity growth in recent years.”

  • Globally: “Like most industries, ICT suffered a dip in global ICT spending for 2009 although the contraction of 3% is much smaller than the 12% decline in overall global trade, as reported by the World Trade Organization (WTO)… ICT spending is set to rebound aggressively over the next few years. The anticipated upswing will begin this year, with pent-up demand fueling spending growth of 7.4% before peaking at 8.7% next year and flattening out at about 6% from 2013 onwards… This revival is also a boon for other industries beyond our own as ICT increasingly plays the role as critical enabler of economic and industrial growth.”

Direct spending on ICT products and services is a large and important part of U.S. and global economies. Even these impressive quotes and figures do not come close to measuring the total impact of ICT on the economy, however. They do not include very significant spending on ICT within organizations (on internal ICT staff and services).

Additionally, in the global information and knowledge economies of the 21st centuries, most businesses, industries and individuals depend on ICT for communications and productivity. ICT contributes very significantly to the productivity of individuals and organizations of all kinds. What is the difference in total economic output with ICT versus without ICT?

ICT enables productivity for all kinds of efforts. It is enabling technology and infrastructure. How do you measure the impact of transportation on trade? ICT is fundamentally strategic.

  • "Information and communication technologies (ICT) has proven to be a key enabler of socioeconomic progress and development, enhancing productivity and therefore economic growth, reducing poverty and improving living standards in many ways. ICT is increasingly revolutionizing production processes, access to markets, and information sources together with social interactions. ICT also has an impact on government efficiency, fostering transparency and better communication and services with and to citizens."

  • "The Information Society will affect most aspects of our lives, so European policies range from the regulation of entire industrial sectors to the protection of each individual's privacy. "

    • 2001-2011, over 565,000 IT-related jobs (in all industries) were created in the United States, an increase of 22.2 percent. IT jobs grew more than 95 times faster than employment as a whole, which grew by only 0.2 percent.

    • In 2011, IT workers earned $78,584 a year, 74 percent more than the average worker ($45,230).

    • Even during the Great Recession and its aftermath, when overall jobs were declining, IT jobs grew. May 2007 - May 2011, IT jobs grew by 6.8 percent, contributing $37 billion to an economy that was otherwise stagnant.

    • Increased investments in IT actually lead to more, not less job creation. U.S. corporations that invested more in IT expanded their workforces by 14 percent between 2006 and 2010, while the average increase of Fortune 500 firms that invested less in IT increased employment just 6 percent.

    • IT was responsible for 75 percent of U.S. productivity growth from 1995 to 2002, and 44 percent from 2000 to 2006.

    • The Internet alone accounted for 21 percent of the GDP growth from 2006 to 2011 across 13 leading economies—Brazil, Canada, China, France, Germany, India, Italy, Japan, Korea, Russia, Sweden, the UK, and the US.

    • IT workers contribute 3 to 5 times more to productivity than non-IT workers.

    • In the 2011 Inc. 5000 rankings of the 5,000 fastest growing companies in the US, almost 1/4 (1,140) were in the IT industry, with a 3-year average growth rate of 302% and revenues totaling nearly $54 billion.

    • In 2012 there were 466K US jobs related to mobile apps, up from 0 in ‘07. The mobile app economy generated almost $20 billion in revenue in 2011.

    • In 2012, over 88 percent of the 500 most popular mobile apps were developed by small businesses, most with fewer than 10 employees.

    • In 2010, nearly 50% of OECD Internet users were active social network users.

    • Almost 50 percent of Internet users in OECD countries use the Internet for formalized education activities.

    • In 2011, IT products comprised 31 percent of U.S. advanced technology product exports and about 9 percent of all U.S. goods exports.

    • In 2008, 54 percent of patents granted by the U.S. Patent and Trademark Office were IT-related.

    • In the European Union, the United States and Japan, the IT sector is by far the largest R&D investing sector. The IT industry accounts for 25 percent of all business expenditure on R&D in the European Union.

In the information and knowledge economies of the 21st century, we all increasingly depend on information and communications technologies - and the increased connectivity and productivity they enable. Strategically, we need modern ICT infrastructure and a large, highly skilled ICT workforce in modern economies.