Vision - September/October 2008 - (Page 6)

The ecOnOmiST ANALYZING FUTURE TRENDS ] • [ by Shawn G. Dubravac, cFa he consumer electronics sector is a diverse cross-section of companies spread across the entire supply chain: from component suppliers and OEM manufacturers, to content and service companies. In an increasingly global world— where supply chains stretch across multiple countries—it can be difficult to fully comprehend how these companies benefit the American worker specifically and the U.S economy more broadly. Earlier this year, CEA enlisted PricewaterhouseCoopers (PWC) to measure the contribution of the sector to the broader economy. PWC’s estimates were produced using the IMPLAM model—a well-known modeling system for estimating economic impact based on the same methodology as T The Impact of CE the Regional Input-Output Modeling SysInternational Trade as a Share tem developed by the U.S. Department of of Total CE Sector Activity Commerce. The results of the study highlight the breadth and depth of the impact on the economy. Total Output $3,55B The companies making up the CE sec$1,73B Value Added tor are directly involved in providing the cutting-edge technologies and accompany$45 Labor Compensation ing content and services that are driving $117 Tax Payments American consumers into the next decade. 2.4 These companies enable the world’s conEmployment sumers to stay connected and informed, 0% 5% 10% 15% 20% work more productively, and enjoy enter� Exports / Total � Imports / Total tainment like never before—whenever and wherever they want. While engaged in these business activities, these companies produce Source: PricewaterhouseCoopers American jobs—4.4 million in 2008. These jobs generally are high paying with an average annual compensation of more than the CE sector is felt in each of the 50 states $74,000. These workers are compensated and Washington, D.C. The share of state jobs well above the average for the overall econ- generated by the CE sector ranges between omy at $49,000. These workers combined 5.8 percent (in the District of Columbia) and produce a total estimated business activ- 11.8 percent (in California). ity of $1.3 trillion—4.6 percent of the total One of the most meaningful results of annual economic activity in the U.S. the study is that a significant portion of Beyond these direct effects, the CE sector the output produced by the CE industry impacts firms both upstream and down- is value-add, meaning the sector creates stream of the sector. For example, companies additional value in the supply chain. The in the CE sector purchase products and ser- U.S. consumer technology sector directly vices (i.e., inputs) from other domestic indus- produced an estimated $575 billion in tries, generating economic activity for these annual value-added products and services. sectors. Moreover, when employees in the CE When both indirect and induced output is sector spend their incomes, they support the included, the sector is responsible for an local and national economics and create eco- estimated $1.3 trillion in value-add—half nomic activity in other sectors downstream of the total annual output of the sector. from CE. These indirect and induced effects highlight just how far the impact of Global Trade the CE sector reverberates throughAs we near the end of an extended out the rest of the economy. For presidential race, perhaps no topic instance, for each direct job generoutside of pure technology policy hits ated in the sector, another 2.51 jobs closer to the CE industry than the are generated throughout the rest of U.S. stance on international trade. the economy. This means that the Trade is a vitally important compoShawn G. DuBravac 4.4 million jobs in the sector create nent of U.S. economic activity in the another 11 million jobs spread throughout CE sector, and exports remain the largest other sectors of the economy. element of trade’s contribution. Exports of Collectively, these 15.4 American workers goods and services account for 10 percent produce $2.6 trillion in business activity in of the total output from the sector. This the U.S. economy. This represents more than translates into roughly 1.5 million U.S. jobs nine percent of all jobs in the U.S. and more directly reliant on exports from CE. Imports than ten percent of the total economic activ- because of the sector add another one mility of the U.S. as measured by Gross Domestic lion U.S. jobs. Fully 16 percent of the 15.4 Product (GDP). Moreover, the impact from million U.S. jobs that exist because of the CE www.ce.org 6 September/October 2008 Boris Lyubner/Getty Images http://www.ce.org

Table of Contents Feed for the Digital Edition of Vision - September/October 2008

Vision - September/October 2008 Contents Shapiro's Spectrum In this Issue The Economist Visionary C4 Trends Coming to a Neighborhood Near You IPv6: Connecting People and Things Israelis Spend Big on the Latest CE Devices Tech Speak Tech Policy CEA Newsline Going Global Eye on Business Market Insider Just the Stats

Vision - September/October 2008

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