The Economic Impact of IT, Software, and the Microsoft Ecosystem on the Global Economy – Pamela Passman

At Microsoft, we have always believed strongly in the transformational power of technology—the far-reaching benefits of computing have long had a substantial impact on education, global innovation, and job and economic growth.  And today, technology is transforming almost every aspect of our society, acting as an increasingly crucial factor in economic, social, and technological progress, and for the sustainability of economies all over the world.  In an increasingly knowledge-based and connected global economy, the power of technology has enabled economies - small and large, emerging and developed – to rapidly accelerate development and compete on a global stage through increased productivity, improved competitiveness, and enhanced communications.     

Today, Microsoft has announced the release of IDC Economic Impact Studies (learn more here), measuring the IT industry’s and Microsoft’s impact on economies around the globe, and confirming the very real and direct influence of technology on world economic growth.    The results are astounding: 

        ·          Worldwide, IT spending in 2007 will be 2.5% of GDP (representing $1.2 trillion for the 82 countries covered in the study), rising to 2.75% by 2011. 

        ·           Employment worldwide in the IT industry and of IT professionals in IT-using organizations will rise in the four years between 2007 and 2011 by 7.1 million jobs, from a 2007 base of 35.4 million.

·          IT employment is expected to grow 4.7% a year from 2007 to 2011, three times higher than global non-farm employment.  Software-related employment is expected to grow at a faster rate of 5.7%.  Of the 7.1 new IT jobs created from 2007 to 2011, 4.6 million will be software-related.


In the midst of this global environment of strong IT-driven economic growth, Microsoft acts as a major catalyst.   In fact, Microsoft is in a particularly unique position to significantly impact economies around the world, given the scope and power of the Microsoft ecosystem—the companies that create products that run on Microsoft platforms, that service Microsoft products, or that work with Microsoft products in their companies –which employs 14 million workers globally.  This ecosystem helps spur the development of national IT-related economies—helping people build skills, get jobs, create new businesses, and expand their existing businesses.  Once again, the results of the IDC Economic Impact Studies provide a compelling background:

·          The Microsoft ecosystem – more than half a million hardware, software, services, and channel firms as well as end user organizations running Microsoft software-- employs 42% of the IT workforce.  These employees will pay more than $500 billion in taxes in 2007.

·          In 2007, the vendors in the Microsoft ecosystem will, themselves, make more than $400 billion in revenues, and, in 2008, invest close to $100 billion in local economies.

        ·          For every unit of revenues – dollar, euro, peso, etc. – that Microsoft will make in 2007, other companies will make an average of $7.79.


It’s clear that Microsoft’s commitment to contribute significantly to local IT economies has already provided great benefits for these local software economies around the globe.  Now, the real challenge is to extend these benefits to the estimated 5 billion people who are underserved by technology.  With our commitment through Unlimited Potential, Microsoft is working to meet this goal through products and programs that will transform education, foster local innovation, and enable jobs and opportunities to help create a continuous cycle of sustained social and economic growth for everyone.     


As technology continues to change the way we live and work, we understand that continuing to foster local software economies will be crucial to create sustainable growth in communities around the world—a key focus of Unlimited Potential.   While the strong progress outlined by the IDC Economic Impact Studies is encouraging, we need to continue to look forward, working in partnership to ensure that everyone has the ability to reach their full potential.


Thank you,

Pamela Passman, Vice President, Global Corporate Affairs, Microsoft




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