Tech

Tech Will Be the Engine of Our Economic Recovery. New Data About Consumer Demand Shows Why

Despite a historic recovery following the reopening of our economy, America still faces serious challenges. The spread of COVID variants has raised speculation that an economic downturn may be on the horizon. Meanwhile, pandemic-fueled supply chain shortages have created uncertainty for many manufacturers and retailers, while labor gaps have left American employers scrambling to remain afloat. And looming inflation threatens the American consumers’ savings accounts and spending power.

However, I believe there is reason to remain hopeful about America’s economic future. America may have an opportunity to embrace explosive economic growth.

I’ve looked at the data– there’s an almost unprecedented surge in consumer demand for innovative products and services from our nation’s tech companies of all sizes. Technology isn’t just making money for the industry; it is changing all our lives for the better. And consumer spending habits show remarkable enthusiasm about our tech-driven future.

Tech innovation has always played a leading role in America’s economic success. But before the pandemic, many of America’s most groundbreaking tech innovations – like digital health monitoring tools, educational toys and smart-home devices – hadn’t yet found mainstream adoption.

After the pandemic, that’s no longer the case. Americans have come to rely on innovative technology for their everyday lives. From remote video conferencing to telehealth, we have embraced technology like never before. And this shift in our relationship with technology has delivered a massive spike in consumer demand for innovative tech.

The data from the Consumer Technology Association’s latest U.S. Consumer Technology One-Year Industry Forecast shows remarkable growth in consumer demand for products from across the tech sector. We predict U.S. manufacturer shipments for more than 100 consumer tech products and related software and services will reach $487 billion in 2021 – a 7.5 percent jump year over year.

These are record-shattering numbers. And when you look at what products and services are being shipped to consumers, you can see exactly how essential technology has become in ordinary American life.

Tech has transformed health care. Shipments of connected health monitoring devices, such as smart thermometers, pulse oximeters and blood pressure monitors, will grow by 23 percent to 13 million units. Revenue from these devices will grow another 17 percent to earn $740 million. In total, health and fitness tech will reach $13 billion in revenue in 2021, up 12 percent over last year.

It’s clear what these numbers mean. After experiencing the convenience and efficiency of digital health tech, Americans don’t want to go back.

We see similar transformations happening across industries. As more Americans got creative about new ways to entertain their children during lockdowns, they turned to technology. As a result, shipments of e-toys, including robots, will reach 61 million units and earn $3.6 billion in 2021.

Americans are also turning to tech for their own entertainment and leisure. After generating more than $5 billion in revenue in 2020, gaming console sales continue to grow in 2021 as combined home and portable console shipments reach 19 million units and generate $6 billion in revenue.

5G phone sales are also skyrocketing. More than 106 million 5G smartphones are expected to ship in 2021, generating $61 billion in revenue — a 404 percent increase from 2020.

This record-shattering demand gives us all reason to be more optimistic about our economic future. That’s because demand doesn’t just generate revenue — it also creates jobs. Right now, the explosion in demand for tech innovation is powering a massive increase in tech job openings, training programs and more. When the tech sector grows, both the American consumer and the American worker reap the rewards.

That doesn’t mean economic recovery will come easily. We still need the right policies in place. We need to stop spending more than we take in, create a regulatory framework for tech that empowers innovators and be smart to keep our economy healthy. Tech not only fuels our economy — it fights inflation, producing better products and services at lower prices. It also provides the tools for productivity growth, which is a better choice for fighting growing inflation than raising interest rates.

The pandemic forever changed Americans’ relationship with technology for the better — and our economy will benefit from that changed relationship for years to come.

 

Gary Shapiro is president and CEO of the Consumer Technology Association, the U.S. trade association representing more than 1,500 consumer technology companies, and a New York Times best-selling author. His views are his own.

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