The impact far outpaced the 2% growth of total U.S. GDP over a two-year period, according to an industry report.
The software industry provides 15.8 million jobs to the U.S. economy and is growing faster than overall GDP, according to a new report from Software.org. There are 3.3 million people directly employed in the industry and 12.5 jobs supported indirectly.
The industry added $1.9 trillion in total U.S. value-added GDP in 2020, which is a 17.1% increase over two years. Software’s economic impact far outpaced the 2% growth of total U.S. GDP over that same period, according to “Software: Supporting the US Through COVID.” The software industry directly contributed $933 billion to the U.S. economy in 2020, a 15.1% increase since 2018.
The report also found that the industry invested more than $103 billion in R&D in 2018, which is more than 27% of all domestic business R&D in the United States.
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Victoria Espinel, president of Software.org: the BSA Foundation and president and CEO of BSA | The Software Alliance, said in a press release that software played a key role during the pandemic by powering remote work, helping manufacturers shift to producing medical and personal protective equipment, and helping small businesses connect with customers online.
“During a difficult year, software supported more than 15.8 million jobs across sectors,” Espinel said. “Meanwhile, the need for software skills continues to increase, further underscoring the need for retraining programs that will equip more Americans with the skills to take advantage of growing opportunities in the digital economy.”
The total number of jobs is up 5.9% since 2018. The report also found that in 2020, 3.3 million people worked directly in software jobs in the United States which is a 7.2% increase over 2018. This year’s update builds on earlier reports with an analysis of 2020 data to quantify the scope of software’s impact and to show change in job totals and economic impact over time.
The report also tracked software jobs and economic activity in all 50 states. Between 2018 and 2020, the software industry’s economic impact grew by double digits in more than half of states and the District of Columbia. Growth was up by more than 25% in Idaho, Nevada and Washington. Direct jobs in the industry went up 18.7% in New Mexico, 12.9% in New York, 10.9% in Texas and 10.1% in Florida.
Chris Hopfensperger, executive director of Software.org: the BSA Foundation, said in a press release that the benefits of the software industry aren’t limited to large cities or traditional tech hubs.
“In 2020, software job growth surged in several states that we don’t usually associate with the tech industry, including Colorado, Florida, and Wisconsin,” Hopfensperger said. “As tech industry employees embrace remote work, we anticipate continued software job growth across the country.”
The report measures the software industry’s impact on the U.S. economy with data and analysis from The Economist Intelligence Unit. The research explores the growth of the software industry between 2018 and 2020 and measures its contributions to value-added GDP, job growth, and wage growth in 50 states and the District of Columbia.