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Tech's Share of the U.S. Economy

01/03/2018

With all the hype around tech, it may come as a surprise that tech’s share of U.S. GDP has been remarkably steady around 6% over the past 20 years. Not exactly a growth sector.

Tech Sectors Share Of US GDP Chart

The reason is that while volumes have grown dramatically, prices have been competed down. Strategically, price management is the leading issue in tech. Tech companies tend to have only primitive capabilities in this area

Also, tech profits as a share of total U.S. profits is stable at 7%, but with a bit more variation (the dotcom bust lowered them). And tech payroll is highly stable at a bit below a 6% share.

(Rather than tech, professional services, followed by financial services, have seen the greatest gains in share of GDP.)