Forbes asks if a trillion a year is too little

Forbes has published an article regarding a report authored by BSA | The Software Alliance in conjunction with The Economist Intelligence Unit. The report states that software has grown at twice the rate of the rest of the US economy and that software directly added some 475 billion dollars to that economy in 2014.
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The report also states that there were some 552 billion dollars in indirect effects. But what are indirect effects? This is a question that might be a bit difficult to answer as digital technology has become ubiquitous. It exists in the cellphone, the grocery store, and the automobile you drive. The average person in western society encounters or uses software at least a dozen times a day. This means that the indirect effects on productivity and exchange are almost impossible to measure. No matter how hard you try, you’ll always leave something out.  For example, how many independent contractors supply their services through the Internet?

We tend to look at the big boys or disruptive startups who are pushing fintech, insuretech and blockchain technologies. However, digital technology is the great equalizer, because it enables small players with limited funds and personnel to compete almost as equals with large corporations. The Internet is open to everyone and the Cloud doesn't care if you're big or small.

Another effect is the shifting of outsourcing. Originally, outsourcing was from one physical location to another and the new location was still directly subordinate to its source. It was still, at least to some extent, an internal part of the original organization. Today, even the big players are outsourcing formally internal functions to independent groups who supply everything from accounting services to software development and even manufacturing. Digital technology makes this possible.

Software has become the glue that holds businesses together in mutually cooperative arrangements that benefit all concerned. Software may be pumping a trillion dollars into the American economy, but it also facilitates the way that economy operates on a daily basis and that is a lot harder to measure.

 

You can read the Forbes article here.

 

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