The American Computer Software Industry: Economic Development Prospects

Of all the high-technology industries that have recently commanded national atten tion, the software industry is among the most promising. From less than $1 billion in the late 1970s, the industry's sales are expected to exceed $20 billion by 1990. Indeed, software will soon surpass the com puter hardware industry in sales. Between 4000 and 4500 software firms now market over 10,000 products, and the average firm's sales are growing at a rate of more than 20 per cent per year. This sector is highly labour-intensive, offering the prospect of substantial job creation. By reviewing the literature and conduc ting extensive interviews with California firms, we investigated four key issues for the economic development future of the software industry. First, what are the future growth prospects in this sector? Second, how innovative and competitive is this industry? Third, what are the future labour needs of this sector? Fourth, can any one region expect to retain and expand its soft ware sector in the face of competition from other regions?