Study shows IT sector catalyst for global economic recovery

IDC and Microsoft released the results of a global research, finding that the IT industry will create 5.8 million new jobs and more than 75,000 new businesses over the next four years.

The study investigates the contribution of IT to gross domestic product (GDP), job creation in the IT industry, employment in the software sector, formation of new companies, local IT spending, and tax revenues in 52 countries, representing 98 percent of total worldwide IT spending.

Key findings:

• IT spending is expected to grow at triple the rate of GDP growth in the 52 countries. Although forecasted growth of IT spending is muted since the advent of the global recession, it is pegged at 3.3 percent per year between now and the end of 2013
• In 2009, the companies in the Microsoft ecosystem will generate more than $535 billion in revenues for themselves. These revenues will remain in local economies
• Global spending on IT will create 5.8 million new jobs between the end of 2009 and the end of 2013. The expected growth rate of 3 percent a year is more than three times as fast as the growth of total employment
• Software drives IT growth. Spending on software is growing faster than spending on IT overall — 4.8 percent a year between 2008 and 2013, compared with 3.3 percent for all IT spending. During 2009, total IT employment in the 52 countries dropped a fraction of a percentage point, yet software-related employment grew 4 percent
• The IT market will create more than 75,000 new businesses over the next four years. Most of the new companies will be small and locally owned organizations.

Additional findings about the software industry:

• The emerging countries on the list of 52 — all countries excluding the United States, Canada, Australia, Japan, New Zealand and Western Europe — will account for only 21 percent of IT spending in 2009 and 39 percent of IT-related employment. But, over the next four years, they will account for more than 50 percent of net new IT spending and 70 percent of new IT-related jobs
• IDC estimates that cloud services could add $800 billion in net new business revenues between the end of 2009 and the end of 2013
• Companies in the Microsoft ecosystem employ 6.1 million people. IT-using organizations employ another 8.8 million IT professionals who work with Microsoft software or the products and services based on it. Together, those 14.9 million people account for 42 percent of the people working in the IT industry or as IT professionals in the 52 countries
• IT spending provides revenues for more than 1.2 million companies selling or distributing hardware, software and services. Those companies, in turn, employ more than 13 million people. Another 22-plus million IT professionals work in IT-using organizations
• Software accounts for a modest slice of overall IT spending but has a disproportionately positive impact on local economies. Software drives activity in the services and distribution sectors, as well as in organizations using IT, so although worldwide spending on packaged software will be only 21 percent of total IT spending in 2009, 51 percent of employment in IT will be software-related
• The employees and companies in these 52 countries will pay nearly $1.2 trillion in taxes in 2009. In the next four years, there will be nearly $366 billion in net new tax revenues.

Full results of the study can be found here.