SWOT analysis of the USA’s Information Technology (IT) industry
This detailed SWOT analysis of the USA’s Information Technology (IT) industry aims to provide readers with a comprehensive insight into the strengths and the weaknesses of the USA’s Information Technology (IT) industry. It also aims to examine the tech opportunities the country should explore and the threats it needs to keep an eye on.
Strengths of the USA’s Information Technology (IT) industry
The USA is one of most technologically advanced countries and houses some of the hottest and biggest tech companies in the world. For instance, Alphabet (Google), Amazon, Facebook, Salesforce, Uber, Apple, Netflix, Dell, Workday, Twitter, Oracle, and Cisco to name but a few. No other country in the world can match such a gigantic and extremely impressive portfolio!
There were approximately 12.1 million people working in the USA’ tech industry in 2019. According to The Internet Association (cited in Shepardson, 2019) the Internet sector contributed approximately $2.1 trillion to the U.S. economy in 2018 which represented around 10% of the country’s GDP. This sector alone had 6 million direct jobs and facilitated another 13 million jobs indirectly.
The USA has a fantastic domestic market what craves for technologically advanced products and services. According to Clement (2019), more than 90% of the U.S. adults use the Internet, while 43% use it many times a day. The country is world-renowned for its capacity to create technology-driven new industries, products, and services. Its advanced tech infrastructure, affluent domestic market, the public sector’s comfortability with cloud computing and widespread adoption of software as a service solution, fierce competition among big tech giants, and constant innovation is continually driving the industry to a new height.
One of the biggest strengths of the USA’s tech industry lies in the fact that many of the country’s universities have been at the forefront of advanced tech research and development. Likewise, the country draws talent from around the world. Many U.S. companies have global reach and the country receives substantial foreign investments every year.
Weaknesses of the USA’s Information Technology (IT) industry
Though millions of people are involved in the tech industry, finding the right talent has been a major challenge for many American tech companies. According to Raidt (n.d.) the country’s educational institutions and training programmes are not producing an adequate number of people that can meet the growing and highest demands. This affects the overall growth of the industry. Many analysts also argue that millions of high-skill and high-paying tech jobs cannot be filled in by the number of qualified workforces currently available in the USA.
Activities of some large tech companies and service providers have badly impacted on public trust. Many people are worried about their privacy and often question whether their data is misused. Likewise, fake news and misinformation have affected the public trust and may analysts have pointed their fingers to the role of some tech companies in helping the spread of fake news.
Opportunities for the USA’s Information Technology (IT) industry
There are many investment opportunities in the USA for both domestic and international companies. Telecommunications, information and communication technologies, medical technology, biotechnology, and high technology are some of the industries that offer investment opportunities (Santander, 2019). Similarly, with new and innovative products and services, US companies can further increase their global reach. Cloud computing, artificial intelligence, media, and telecommunications are four major areas to look out for now and in coming years!
Threats to the USA’s Information Technology (IT) industry
Threat is the last element to address in SWOT analysis of the USA’s Information Technology (IT) industry. In the field of global technology, the U.S companies must compete with companies from China, South Korea, Russia, Germany, Canada, the UK, India, and some others. Moreover, trade wars with China are very concerning as well, as many U.S. companies are worried about its impact on the sales of their products and services to customers in China. Waters (2020) reports that Cisco’s sales to Chinese telecom groups have been declining for years.
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Last update: 11 June 2020
Clement, J. (2019) Internet usage in the United States – Statistics & Facts, available at: https://www.statista.com/topics/2237/internet-usage-in-the-united-states/ (accessed 05 June 2020)
Raidt, J. (n.d.) Capable workforce? Available at: https://www.uschamberfoundation.org/capable-workforce (accessed 10 June 2020)
Santander (2019) United States: Foreign Investment, available at: https://santandertrade.com/en/portal/establish-overseas/united-states/foreign-investment (accessed 10 June 2020)
Shepardson, D. (2019) Internet sector contributes $2.1 trillion to U.S. economy: industry group, available at: https://www.reuters.com/article/us-usa-internet-economy/internet-sector-contributes-2-1-trillion-to-u-s-economy-industry-group-idUSKBN1WB2QB (accessed 8 June 2020)
Waters, R. (2020) How the trade war is damaging the US tech industry, available at: https://www.ft.com/content/16fa93ba-bf69-11e9-b350-db00d509634e (accessed 10 June 2020)
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Author: Joe David
Joe David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.