Technology products and services are an indispensable part of how we work and connect with each other. Beyond technology’s crucial role in our daily lives, almost every U.S. industry relies on technology to develop other products and services. Still, understanding how vital the technology industry is to the U.S. economy and other industries can often be hard to capture.
With support from ITI, the Information Technology and Innovation Foundation (ITIF) recently set out to measure the impact of technology in the U.S. economy. The resulting report reveals how the information technology or IT industry enables nearly one in every five U.S. jobs, accounts for more than a tenth of U.S. GDP, fuels productivity, and represents a core national strength that U.S. policymakers can and should better leverage going forward.
In the United States, technology products and services feed into many other industries and contribute to an undeniable multiplier effect on the American economy, including on job and wage growth.
The report's most important findings note:
- The tech industry employed 5.9 million U.S. workers in 2020.
- Nearly one-fifth of all private sector jobs in the U.S. economy are enabled by IT, through either direct employment in the industry, IT-supplier jobs, or IT-induced jobs.
- The IT sector directly provided over 10 million supply-chain-related jobs and supported another 8.7 million in 2020 alone.
- The tech sector is deflationary. IT products and services cost less over time compared with the rest of the U.S. economy. Those savings are frequently passed on to consumers, even as products improve and become more efficient.
- The average IT worker makes more than double what their counterparts make elsewhere in the U.S. private sector.
- For workers without a college degree, IT jobs pay nearly $20,000 more annually when compared to jobs in other industries.
The tech sector also continues to assure America's prominence on the global innovation stage: "America's most strategically important advanced industries as a group would have receded precipitously…in the face of surging competition, particularly from China," without our sector, says the report. In fact, U.S. technology represents almost a third of the global IT market—far higher than the United States' share of the overall global economy.
Technology's many direct and indirect contributions to the U.S. economy should not be taken for granted. The services and products the industry creates undergird nearly every aspect of modern life, powering production, growth, and innovation in the United States and across the globe. That impact lies not only in those outputs but in the sector itself and the people who power it, well beyond the information economy. Americans and policymakers alike can be assured that the industry is hard at work delivering high-paying jobs while producing products and services that drive broad-based growth, counteract inflation, and improve people's quality of life.