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Software Industry Has $1 Trillion Economic Impact In US (cnet.com)

Posted by BeauHD on from the Silicon-Valley dept.

An anonymous reader writes from a report via CNET: A report from software trade organization BSA The Software Alliance shows that the software industry is driving economics gains across the country. The software industry had a $1.07 trillion impact on U.S. gross domestic product in 2014, according to the report. It's being driven by 2.5 million jobs directly related to the software industry, with an additional 7.3 million positions for people in real estate, professional services and other fields the industry supports. California surpassed all other states with 408,143 software jobs that contributed roughly $90.53 billion to the GDP. New York came in second with 147,361 software jobs contributing $37.16 billion. Texas came in third with 200,000 jobs adding about $30 billion. Alaska came in last place with 1,325 software jobs contributing $248 million to the GDP.

32 of 55 comments (clear)

  1. Microsoft wants a subsidy? by Anonymous Coward · · Score: 3, Insightful

    BSA is just a front for Microsoft, so what are they lobbying for? I'm guessing its a subsidy and some protection when their desktop market collapses under the oncoming storm of ARM desktops.

    1. Re: Microsoft wants a subsidy? by chispito · · Score: 1

      Why would that cause their model to collapse? Is all the business software people use magically going to recompile itself? There are already consumer pcs running ARM, called Chromebooks. Windows is doing just fine.

      --
      The Daddy casts sleep on the Baby. The Baby resists!
    2. Re:Microsoft wants a subsidy? by TemporalBeing · · Score: 1

      BSA is just a front for Microsoft

      Well, Microsoft *and* Oracle, Apple, and about a thousand other proprietary software vendors - essentially most big companies that actually require a license on their software to use it.

      --
      Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
  2. Isn't BSA the License Police? by 93+Escort+Wagon · · Score: 3, Informative

    Are they setting the stage to go before Congress and ask permission to impose the death penalty on license scofflaws?

    --
    #DeleteChrome
    1. Re:Isn't BSA the License Police? by BlueStrat · · Score: 2

      Are they setting the stage to go before Congress and ask permission to impose the death penalty on license scofflaws?

      More like setting the stage for politicians already taking their bribes...err, "contributions"...to take stands to restrict free and open software.

      Senator Spittoon: "Waaarghargle!!..Those damned free-software hippies want to destroy the US economy and our jerbs! Something must be done! This is something, so it must be done!"

      Thus, our freedom to determine what runs on (supposedly) our hardware takes another hit.

      Strat

      --
      Progressivism (aka US 'Liberalism'): Ideas so good they need a police/surveillance-state to enforce.
  3. For comparison by Okian+Warrior · · Score: 5, Interesting

    For comparison, the total GDP of the country is a little under $17 trillion.

    Labor force participation is low, the levels it was in the 1970s. There's a recent uptick in jobs, but the graph is notoriously noisy, and it'll be at least 6 months to a year before we can tell whether this is a trend.

    GDP per capita (amount of GDP per person) has about doubled since 1995. Quadrupled since 1970.

    Despite these gains, household income has dropped by about 8% in the last 10 years.

    So in summary, since 1995 (ish) we doubled our GDP (both per person and in absolute terms), and household income right now is about the level it was at the start of the doubling.

    Oh, and everyone who works still has to put in 40hrs/week.

    1. Re:For comparison by geekmux · · Score: 4, Interesting

      ...Despite these gains, household income has dropped by about 8% in the last 10 years. So in summary, since 1995 (ish) we doubled our GDP (both per person and in absolute terms), and household income right now is about the level it was at the start of the doubling...

      Translation: The rich got richer. A LOT richer.

      If anyone was looking to try and find out exactly when the "great divide" happened that started to establish the financial powerhouse that makes up the 1% today, there ya go.

      And the future is painted quite clear as that chasm between the 99% and the 1% continues to grow, and billionaires turn into trillionaires by replacing the middle class with automation to maximize throughput while minimizing all those costs related to employing humans. In a weird twist of irony, it will be the software industry that ushers this era in. We've heard of H1-B visas being used to force IT workers to train their replacements. I often wonder if the AI developer realizes they're doing the same thing.

    2. Re:For comparison by Anonymous Coward · · Score: 1

      This is the result of globalism - impoverishment of the working classes in the US and Western Europe, the rise of an aggressive world power in Asia, and instability in the Middle East and it's aftermath.
      And yet nationalist movements, which want to undo this mess, are condemned as somehow evil.

    3. Re:For comparison by K.+S.+Kyosuke · · Score: 1

      I'm highly skeptical that computer-driven automation is augmenting US GDP by a mere 6.25% (from $16 trillion to $17 trillion),

      --
      Ezekiel 23:20
    4. Re:For comparison by DigiShaman · · Score: 2

      As I've said time and time again. We've never had trickle-down or trickle-up economics; we're having trickle-out!! The US has, and is currently hemorrhaging wealth to overseas while the benefits go to the top 0.25% of the feudal ownership class. The lower and middle class are directly competing with low standards of livings in the East. Being that we refuse to lower our own standards, it's only natural that wages have stagnated to 1995 levels. Meanwhile, all those filthy rich Chinese have taking all hat new-found wealth and transferred it back to Canada, US, and Australia; all locked up in real-estate. And the governments that collect on the tax revenue from said transactions?? Totally looks the other way. It's a fucking crony capitalist racket we've got going on now. No wonder there's a massive global revolt going on against the Globalists; from Trump all the way to the Brexit. Even the Philippines are getting tired of this shit.

      --
      Life is not for the lazy.
    5. Re:For comparison by ranton · · Score: 1

      I'm highly skeptical that computer-driven automation is augmenting US GDP by a mere 6.25% (from $16 trillion to $17 trillion),

      This article only looks at people actually working in the software industry, and other workers the industry supports (retail, real estate, restaurant, etc). It does not look at the impact this software has on non-software industries employees. For instance it doesn't factor in productivity increases for a business analyst working with a BI tool instead of paper spreadsheets, or a car built with software-driven robotics instead of by hand.

      Just as previous waves of technological change (industrial revolution, steam engines, electrical engineering, automobiles) are largely responsible for the productivity increases of their time, the digital revolution is primarily responsible for most productivity increases over the last 40 years. You could make an argument that the software and computer hardware industry is actually responsible for $5 - $10 trillion of our current GDP.

      --
      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    6. Re:For comparison by dopeghost · · Score: 2

      Their figures work out at an average of $221,809 per job

      And even more in New York where it's $252,169.

      Given average wages in the IT sector are nothing close to that it goes to show just how much is being pumped away at the top.

      --
      This UID is 7651 digits too high to subjectively infer IQ from.
    7. Re:For comparison by swillden · · Score: 2

      ...Despite these gains, household income has dropped by about 8% in the last 10 years. So in summary, since 1995 (ish) we doubled our GDP (both per person and in absolute terms), and household income right now is about the level it was at the start of the doubling...

      Translation: The rich got richer. A LOT richer.

      If anyone was looking to try and find out exactly when the "great divide" happened that started to establish the financial powerhouse that makes up the 1% today, there ya go.

      And the future is painted quite clear as that chasm between the 99% and the 1% continues to grow, and billionaires turn into trillionaires by replacing the middle class with automation to maximize throughput while minimizing all those costs related to employing humans. In a weird twist of irony, it will be the software industry that ushers this era in. We've heard of H1-B visas being used to force IT workers to train their replacements. I often wonder if the AI developer realizes they're doing the same thing.

      This is a normal process which we've seen with every big technological change. New technology enables massive wealth generation, but the wealth always accrues first to those who are in a position to exploit the change. Then, over time, competition erodes the ability of the wealthy to keep the benefits concentrated, and they spread to the wider population. That's not to say the rich stop being rich, but the degree of inequality decreases. We've seen this pattern over and over again throughout history.

      Note that I'm not arguing that we shouldn't use government or other mechanisms to accelerate the equalization, but it's worth recognizing that it's a common pattern that we should expect to see -- and we should be careful not to stop economic progress merely because it creates temporary increases in inequality, because the rising tide does lift all boats, eventually.

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    8. Re:For comparison by ranton · · Score: 3, Interesting

      We've heard of H1-B visas being used to force IT workers to train their replacements. I often wonder if the AI developer realizes they're doing the same thing.

      Its not just AI developers who do this, it is almost all software developers. In fact you are talking about anyone in an R&D-like field.

      When I worked in the pharmaceutical industry my job was to help hospitals and pharmacies hire more pharmacy techs instead of pharmacists. When I worked in consulting I worked in many industries but my primary goal was to help companies solve immediate software needs without having to hire too much staff. Now that I work with CRM related software, I am responsible for helping my company only increase its staff by 10% while its revenue grows by 100%. The end result is that as we eat market share from other companies, the jobs lost in those companies are not added to mine.

      I don't believe our economy is a zero sum game, but software is changing so rapidly there is no way for job growth in other sectors to keep up. Right now I complete a major project every quarter, and each time it increases the workload my coworkers can handle each week. For instance over the past two years our customer service department can handle over double the cases per staff member, and that doesn't even include new self-service options.

      And everything we have seen over the past few decades is nothing compared to when natural language processing and image recognition reach or surpass human-level capabilities. This could easily be in the next 10 years, and then the service industry sees a disruption not seen since the green revolution. Except this time it will happen over 5 years instead of 50.

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      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    9. Re:For comparison by swillden · · Score: 2

      This is the result of globalism - impoverishment of the working classes in the US and Western Europe

      And the dramatically greater enrichment of the working classes in Asia and Eastern Europe. While globalization has increased economic inequality in the first world, if you look at humanity as a whole it has hugely decreased economic inequality. That's an unabashedly Good Thing, and it's one we need to continue -- and we need to include Africa as well (which depends mostly on Africa getting its ducks in order; the reason it's been left out is because most African countries are still too unstable for businesses to operate in).

      Yes, equalization of extreme global inequality is painful for those at the top, but that pain will taper off as wages in the developing world rise and as increased trade and technological progress increase global wealth.

      the rise of an aggressive world power in Asia

      That world power was already aggressive. It's richer now, and able to do more, but it's also become economically interdependent with the rest of the world which effectively means that it cannot be militarily aggressive without seriously harming itself. That's a good thing. Trade prevents wars.

      and instability in the Middle East and it's aftermath.

      In what way is globalism the cause of instability in the Middle East? You're really reaching there.

      And yet nationalist movements, which want to undo this mess, are condemned as somehow evil.

      Not evil so much as continuing a long and ugly history of tribalist thinking, to the long-term detriment of all, including those who believe they're protecting their own.

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    10. Re:For comparison by TemporalBeing · · Score: 1

      Their figures work out at an average of $221,809 per job

      And even more in New York where it's $252,169.

      Given average wages in the IT sector are nothing close to that it goes to show just how much is being pumped away at the top.

      I interviewed for a mid-level position a few years back that would have been $140k in NYC; while only $80-86k in SC. Rent for someplace in the NJ/NY area would have wiped out any real differences, consuming any extra I would have been able to take home.

      --
      Truth is like the sun. You can shut it out for a time, but it ain't goin' away. - Elvis Presley (source: imdb.com)
    11. Re:For comparison by ranton · · Score: 1

      God forbid we get actual robot doctors.

      Which is one of the first things Watson started training to become after it won Jeopardy.

      --
      -- All that is necessary for the triumph of evil is that good men do nothing. -- Edmund Burke
    12. Re:For comparison by swillden · · Score: 1

      Enriching Asians at the expense of Americans and Europeans is just robbing Peter to pay Paul.

      This is your core fallacy. It's not a zero-sum game. Getting more of the world's population involved in producing and growing economically makes us all wealthier.

      I refrained from insults, but you had to belittle patriotism as "ugly" and "tribalist". You are simply wrong. Being patriotic is simply respecting the values, ideals, and laws of the country you are either born in or immigrate to.

      You're right about the definition of patriotism, you're wrong to label protectionist, xenophobic impulses as patriotic. Patriotism means respecting and valuing your own culture and people, but it in no way requires that you consider others to be less valuable.

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  4. How much is it realy? by bjwest · · Score: 1

    If you take into account the money the H-1B "employees" send back home? In other words, are they counting the wages paid, as reported by the industry, or the actual wages spent within the U.S.? They also need to account for the lesser pay earned the H-1B's. Those figures should be higher if everyone was payed the fair market wage.

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    1. Re: How much is it realy? by prefec2 · · Score: 1

      The article is not about income. It is about GDP. GDP is the sum of sales of goods and services. Your pay is not related to that.

    2. Re: How much is it realy? by bjwest · · Score: 1

      Sorry, it's been a while for me since high school economics. I was concentrating on all the job figures they were throwing in there and wondering how many of those are H-1Bs.

      --

      --- Keep the choice with the user..
  5. Eyes on the kernel by Anonymous Coward · · Score: 1

    With so much time and money spent on software, and all the speculation on AI taking over the world, you would think I could integrate my ERP with my CRM without having to pay for another module only to find I need to pay for yet another module to make it work.

  6. One Trillion Dollars. by nastyphil · · Score: 2

    Is it a +ve or -ve impact?

    --
    Dialectician. Archology.
  7. Lawyers also add many billions to the GDP by Anonymous Coward · · Score: 1

    Every time there is a patent case, the GDP goes up.

    But like lawyers, how much value does software actually add?

    There is certainly thousands of times more of it than 20 years ago. An operating system that could fit in a few meg now needs a few gig to do much the same things. How does that affect the value per line of code?

    1. Re:Lawyers also add many billions to the GDP by Guy+Harris · · Score: 3, Insightful

      Every time there is a patent case, the GDP goes up.

      And don't forget those people running around throwing stones at windows - look at all the jobs they're giving to glaziers!

      (Yes, I know, that's exactly what you're saying here....)

  8. BSA = Software Industry Lobbyists by nateman1352 · · Score: 4, Insightful

    I suspect that the $1 trillion number the BSA came up with is a generous estimation that gives excessive weight to all the secondary sectors that the software industry supports. Just because construction firms purchase a bunch of trucks doesn't mean that construction jobs get counted as part of "the auto industry's impact on GDP." The only thing that counts towards GDP is the revenue generated by the sales of those trucks (worker wages DO NOT count as part of GDP unless they are government workers), same principle should apply to the software industry.

    Just a bunch of rhetoric to talk up Congress about why its so important that they pass a bunch of new IP laws to protect the US economy.

    1. Re:BSA = Software Industry Lobbyists by Iamthecheese · · Score: 1

      It's not even that. It's a ready-made fig leaf to give politicians an excuse to make good on the bribes they're receiving.

      --
      If video games influenced behavior the Pac Man generation would be eating pills and running away from their problems.
    2. Re: BSA = Software Industry Lobbyists by NoNonAlphaCharsHere · · Score: 1

      I'm reminded of the Mitt Romney picture "I can lie faster than you can fact check" meme from the last election cycle. This "One Trillion Dollars" /Dr. Evil> lie is gonna be with us for a LONG time.

  9. What? by edittard · · Score: 1

    driving economics gains

    Are you trying to write in French?

    We don't have adjectival agreement in English.

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    At the bottom of the /. main page it says 'Yesterday's News'. Well they got that right.
    1. Re:What? by edittard · · Score: 1

      "Courts martials" has the adjective after the noun. That's a bit of a clue (if being a legal term wasn't enough) that it's not really an English expression.

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      At the bottom of the /. main page it says 'Yesterday's News'. Well they got that right.
    2. Re:What? by edittard · · Score: 1

      Not to mention if you ARE a bloody Yank, then "economics" could reasonably be parsed as a noun referring to the subject in general.

      One, I'm not a septic.
      Two, that usage - meaning the academic subject - is used everywhere.
      Three, that usage clearly isn't what's meant in the context.
      Four, if it was you'd use a possessive: economics' gains were offset by chemistry's losses.

      But that aside, you're 100% correct.

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      At the bottom of the /. main page it says 'Yesterday's News'. Well they got that right.
  10. Software Hipster here by Sperbels · · Score: 1

    I was writing software back before it was cool