Software and Information Technology Industry
The United States has the most advanced software and information technology (IT) services industry in the world.
Industry Overview
One third of the $5 trillion global information technology (IT) market is in the United States, making it the largest tech market in the world. The industry accounts for $1.9 trillion of U.S. value-added GDP (more than 10 percent of the national economy) and 12.1 million jobs. According to CompTIA, there are more than 557,000 software and IT services companies in the United States (approximately 13,400 tech startups were established in 2019 alone). The tech industry includes software publishers, suppliers of custom computer programming services, computer systems design firms, and facilities management companies. The industry draws on a highly educated and skilled U.S. workforce, including 1.6 million software and web developers. The tech industry continues to grow, adding 307,000 new jobs for a total of 4.9 million postings for tech occupation jobs in 2019.
U.S. software firms operate a mature, harmonized market and have a reputation for producing reliable and effective solutions that accelerate quickly to the marketplace. International companies in the industry have shown a keen interest in the U.S. market because of its strong intellectual property rights laws and enforcement. Within the U.S. tech market, almost half of spending is in the tech services and software industries. U.S. companies lead the world’s packaged and custom software markets and are competitive in nearly all other market segments with a stable overseas market share.
Industry Subsectors
This industry includes large and small businesses that can design, produce, and distribute packaged software. n 2019, there was almost $37 million foreign direct investment in the software publishing industry. As of 2018, there were 38,400 workers employed in foreign-owned businesses in the software publishing industry, comprising 9 percent of total employment in the industry. Across the industry, there were 13,380 establishments in 2017. The most common occupation in the industry is software developers and software quality assurance analysts and testers. There were 122,320 workers employed in this occupation in 2019, earning an average annual wage of $120,250 in the industry. The other two most common occupations in the industry are computer user support specialists (26,600 employees earning an average annual wage of $60,930) and sales representatives, wholesale and manufacturing, for technical and scientific products (18,080 earning an average annual wage of $99,730).
There were 17,597 establishments in the United States in the data processing, hosting, and related services industry in 2017. The most recent employment figures estimate that 341,400 workers are employed in the industry, and the most common occupation in the industry is software developers and software quality assurance analysts and testers. There were 48,050 employers in this occupation in 2019, and they earned an average annual wage of $109,890 in this industry. The second-most common occupation was customer service representatives, with 27,030 employees earning an average annual wage of $39,980, followed by 18,540 computer user support specialists earning an average annual wage of $57,390.
The computer systems design and related services industry, has the most companies of the three highlighted subsectors with 143,598 establishments in 2017. The most recent employment estimates also place it as the largest source of employment in the IT and software subsector with over 2 million employees at the end of 2020. In 2019, foreign direct investment into this industry reached $84.6 billion, and 137,800 workers were employed by foreign-owned businesses in the computer systems design and related services industry as of 2018 (6 percent of total employment in the industry that year). The most common occupation in the industry is software developers and software quality assurance analysts and testers, with 472,180 workers in this occupation in 2019 earning an average of $109,240 in this industry. The second-most common occupations were computer systems analysts (172,810 employees earning an average annual wage of $100,260) and computer user support specialists (151,410 employees earning an average of $56,950).
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