International Data Corporation (IDC) and Microsoft Corp have released the results of global research measuring the information technology (IT) industry's contributions to local economies.

The study investigates the contribution of IT to gross domestic product (GDP), job creation in the IT industry, employment in the software sector, formation of new companies, local IT spending, and tax revenues in 52 countries. These represent 98 percent of total worldwide IT spending. The research found that in India, Microsoft and its ecosystem of local partners, vendors are major catalysts and service providers are a major catalyst of local economic growth and opportunity, during both the current economic difficulties and recovery.

“In this fundamental economic reset, innovative technologies will play a vital role in driving productivity gains, and enabling the creation of new local businesses and highly skilled jobs that fuel economic recovery and support sustainable economic growth,” said Steve Ballmer, CEO, Microsoft. “Countries that foster innovation and invest in infrastructure, education and skills development for their citizens will have a major competitive advantage in the global marketplace.”

Key findings

• Spending on IT will reach Rs 989 billion in 2009, and is expected to grow to Rs 1,643 billion by 2013 for a compounded rate of growth of 11.8 percent. By 2013, IT as a percentage of GDP will increase from 1.8 to 2.3 percent.
• The IT market will drive the creation of nearly 7,000 new businesses and 3,24,000 new jobs between the end of 2009 and the end of 2013. Most of the new companies will be small and locally owned organizations.
• In 2009, local partners in the Microsoft ecosystem will generate more than Rs 420 billion in revenues for themselves. To generate these revenues, they will invest Rs 134 billion in development, marketing, training and sales in the Indian economy.
• The Microsoft ecosystem, defined as local companies that develop and/or sell products that run with or on Microsoft software, or that service and distribute Microsoft software, is a critical economic catalyst in every country where Microsoft operates. For every rupee that Microsoft generates in 2009, local companies in this ecosystem will generate Rs 10.95.

Software industry in India

• Software spending represents 12 percent of India's total IT spending.
• Software drives employment in the IT industry, as 45 percent of IT employees are engaged in creating, distributing, installing or servicing software.

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