An economic impact study by Microsoft has found that IT industry activities in 19 countries, including Ireland, were the source of more than 9m existing IT jobs and generated more than US$200bn in tax receipts in 2004. Microsoft says this proves IT to be a major driver of local and regional economic activity in EMEA countries.
Accordion to the study carried out for Microsoft by IDC, the IT industry’s economic impact is set to grow. Over the next four years, the EMEA IT sector is expected to generate 2m new jobs and an additional US$160bn in tax revenues in these regions.
The study examined the IT industry’s impact on job creation, company formation, local IT spending and tax revenues in Austria, the Czech Republic, Denmark, Estonia, France, Germany, Hungary, Ireland, Israel, Italy, Lithuania, the Netherlands, Poland, Portugal, Russia, South Africa, Spain, Turkey and the UK.
“There is no question that information technology is a dynamic factor in the global economy and that its impact can be felt at every level, from the European Union to individual households,” said John Gantz, chief research officer at IDC. “The IT industry has returned to positive growth for these regions and is once again an engine of employment growth and tax revenues for local economies.”
Nearly 9 million people in these 19 countries are employed by more than 356,000 companies in the hardware, software, services and channels segments, or as IT professionals in end-user organisations. Microsoft-related employment ranges from approximately 36,000 people in both Hungary and Turkey to more than half a million in the UK and Germany.
In addition, for every US$1 of Microsoft revenue in the region, another US$7.50 was generated by other companies selling hardware or software that works on Microsoft operating systems or servicing that software.
Within the 19 countries, roughly half of all IT-related jobs are engaged in creating, distributing or servicing software, either for external customers or internal corporate users. Similarly, more than half of all their IT tax revenues come from software-related activities. The Microsoft ecosystem accounts for over a third of 2004 employment and tax revenues in these countries.
“These new employment figures from IDC illustrate the economic benefit created by the IT industry in general, and especially by Microsoft’s ecosystem of partners and customers in these countries,” said Steve Ballmer (pictured), CEO of Microsoft Corp.
“Millions of people are employed in this ecosystem – fully 36pc of the overall IT sector – generating billions of dollars for governments across EMEA. The IDC data underscores what we’ve always known to be true – that Microsoft’s business model supports a vibrant IT economy in which local businesses thrive and local jobs are created.”
By John Kennedy
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