The Value of IT
It is well known that the tech sector drives productivity and strengthens all aspects of our economy. Technology invstments fuel revenue growth for businesses, often resulting in higher productivity, additional jobs, and lower prices for consumers. Many regions of the U.S. and communities around the world recognize this basic truth and nurture their information technology industries accordingly.
The Presidents Council of Economic Advisors found that from 1995 to 1999, productivity was four times greater (4.18 percent vs. 1.05 percent) in industries with high levels of IT investment than in those with less investment.
When economists have used growth accounting models to examine IT's impact on entire economies, they also find that IT is the major driver of growth. Daveri 1 found that 78 percent of the increase in productivity in the United States was due to IT. Other studies have found that IT is responsible for all of the growth in labor productivity, even as other factors (such as declining labor quality) have led to productivity declines.
There is evidence that IT matters not just to the entire economy, but to individual firms as well. For example, for every dollar investedin computer capital, marke valuation of the firm rises over $10.2
Finally, IT jobs pay on average $70,000 salary per year compared to an average annual salary of $38,000 for all U.S. jobs, according to the U.S. Bureau of Labor Statistics.
1 Daveri, Francesco. "IT and Productivity Growth Across Countries and Sectors."
in The New Economy Handbook. Ed D. Jones. Academic Press, 2003.
2 Brynjolfsson, Erik, Hitt, Lorin M. and Yang, Shinkyu. “Intangible assets:
Computers and Organizational Capital.” Center for eBusiness: MIT Sloan
School of Management (Oct. 2002).
From: Digital Prosperity: Understanding the Economic Benefits of the
Information Technology Revolution, March 2007 (PDF, 4Mb)