Report: IT Sector Delivers High Pay, Low Inflation, Drives Exports and Creates Innovation that Improves Quality of Life
America’s IT industry delivers high pay, low price inflation for consumers, strong exports, and superior innovation. In addition, it offers the highest paying job opportunities for non-college-educated workers. Those are the conclusions of a new report by the Information Technology & Innovation Foundation titled How the IT Sector Powers the US Economy.
ITIF analyzed the latest data available from the federal government to examine the key role and contributions of the IT industry in the U.S. economy. It notes that the U.S. IT sector (also referred to as the “tech sector”) includes industries such as computing, data storage and processing, IT components, information services, semiconductors, and software.
According to the report the tech sector employed 5.9 million workers in 2020, accounting for 4.4 percent of U.S. private sector jobs. From 2017 to 2020, IT jobs grew more than twice as fast as total U.S. private sector jobs did. Workers in the sector earned more than double the average U.S. wage, and these jobs had a multiplier effect that supports 19 percent of all U.S. jobs.
Here are the key takeaways from the report:
- Industries vary in the relative contributions they make to national economies. The IT sector (which many call the “tech sector”) distinguishes itself with high-paying jobs, low price inflation for consumers, strong exports, and superior innovation.
- Nearly one-fifth of all private sector jobs in the U.S. economy (19 percent) are enabled by IT, through either direct employment in the industry, IT supplier jobs, or IT-induced jobs.
- Overall, the average annual compensation per worker in the IT industry is more than double the average U.S. private sector wage. And among non-college-educated workers, the sector pays approximately 50 percent more than non-IT industries do.
- The IT sector accounts for more than one-fifth of all employment in sectors that engage in trade, more than one-quarter of business establishments engaged in trade, and one-quarter of U.S. traded-sector value added.
- IT products and services are key production inputs for many other industries. As of 2019, they were contributing 0.35 percentage points out of the economy’s 2.14 percent overall growth in value added.
- IT-based products and services also are deflationary: They have been getting significantly cheaper compared with the rest of the economy, while having an outsized impact on improving quality and boosting efficiency across all sectors.
The report concludes that “America’s IT sector stands out as one of the country’s most strategically important advanced industries, making outsized contributions to the broader U.S. economy in numerous ways. . .Policymakers should take none of this for granted.”