One of the more frustrating aspects of the thriving U.S. tech sector is that while its leading companies generate fabulous profits, they don't actually employ that many American workers -- especially compared to industrial titans of yore. At its 1970s peak, General Motors had more than 600,000 U.S. workers on its payroll. Apple, by comparison, claims just 47,000, most of whom are part of its retail operations. Google has about 18,500. They've perfected the low-employment, high-profit business model.
But measuring a tech company's economic impact by its headcount alone is more than a bit misleading, in part for reasons I've written about previously. Michael Mandel of the Progressive Policy Institute, an occasional Atlantic contributor, has done some of the most interesting work on the topic, showing how California's tech behemoths indirectly support hundreds of thousands of workers who produce and market mobile apps.
This week, Mandel and his PPI colleage Diana Carew, are out with a new report that illustrates another key way in which tech companies inject life into the economy: business investment, otherwise known as capital expenditures. That's the money firms spend to upgrade and expand their operations, for instance by buying machinery, upgrading servers, or building new factories and offices. Google and Apple were numbers 24 and 25 on PPI's list of companies investing most in the United States, right after Chrysler, and not far off from General Motors or Target (Their list excludes financial firms).