The burgeoning global population is predicted to grow by more than 1 billion in the next 15 years, hitting 8 billion by 2025.1 Most of this growth is expected to be in urban areas in emerging markets, where cities are currently expanding at a rate of 60 million people per year—the equivalent of another Paris, Beijing, or Cairo every other month.2 By 2030, the global middle class could swell from 440 million to 1.2 billion people.3
These trends present serious challenges. As living standards improve, people live longer and use more resources such as materials, energy, water, and land, placing increasing stress on the environment. Health and education systems are ill-equipped to cope with rapidly growing demand, and infrastructure such as utilities and transportation systems are inadequate.
The IT sector has an essential role to play in providing sustainable solutions that will help satisfy the needs of a growing and more affluent population. However, while information is a powerful force, realizing its full value depends on how we manage and use it. HP solutions and expertise provide the means to harness, understand, and apply information to advance opportunity, innovation, and economic well-being. Read more in our essay on the making the most of information in a connected world.
Along with the many advantages of IT come challenges that we must manage carefully. For example, we work to reduce the environmental impacts of the infrastructure required to provide our products and services. See Climate and energy – Products, services, and software, Sustainable design, and Product reuse and recycling for more information.
We have also established robust procedures to keep our customers’ personal data secure. Read more about how HP protects customer privacy.
HP’s economic impacts
As the world’s largest technology company, HP makes a substantial contribution to economies worldwide. With approximately 88,000 retail locations and 145,000 sales partners, we ship approximately 3.5 products per second.4 The technology and services market that HP currently addresses will be approximately $1.6 trillion in 2013 and is growing in the mid-single digits.
In FY10, HP’s revenue increased by 10% to $126 billion, compared with FY09. Non-Generally Accepted Accounting Principles (non-GAAP) diluted earnings per share (EPS) increased 19 percent to $4.58.5 On a GAAP basis, diluted EPS increased 18 percent to $3.69.
Our financial transactions directly impact various groups:
- Suppliers through our purchase of goods and services
- Employees through wages paid
- Customers through sales
- Sales, marketing, and distribution partners through our commercial interactions
- Governments through tax payments
- Communities through social investment
- Investors through dividends and our financial performance
We also indirectly affect individuals, businesses, and wider systems as the money we spend circulates through the economy. Additionally, HP products and services are designed to increase productivity, potentially boosting our customers’ profitability and economic contributions.
The table below outlines our direct and indirect economic impacts on each group. The Data dashboard summarizes HP’s economic performance. For more details, please see our financial statements, interactive stock chart, and annual report and 10K.
| Group | Direct economic impacts | Indirect economic impacts |
|---|---|---|
| Suppliers | HP spends money on products, materials, components, and services from suppliers around the world. |
Our spending supports job creation in supplier companies. Suppliers and their workers pay taxes and support their local economies. Suppliers may also pay dividends to their investors. |
| Employees | Compensation and benefits are a significant proportion of HP’s expenses. We invest in training and development, which expands employees’ opportunities. | Employees pay taxes and generate further economic activity by spending the money they earn. |
| Customers | HP’s net revenue was $126 billion in fiscal year 2010. | Offering reliable, high-quality products and services benefits our customers. Our products and services also are designed to improve productivity, which may increase customers’ contributions to society through business expansion and increased taxes paid. |
| Sales, marketing, and distribution partners | HP works with a wide range of partners such as retailers, resellers, distribution partners, independent software vendors, and systems integrators to reach various customer groups. | The benefits derived by our partners as a result of their commercial relationship with HP can contribute to their growth. |
| Local, state, and national governments | Local, state, and national governments benefit from taxes paid by HP and our employees. |
Taxes paid help enable government spending and programs. |
| Local, regional, and national communities | Social investment ($44.9 million in cash, products, and services in 2010), financial or in-kind support for nongovernmental organizations and employee giving all benefit communities. | Social investment activities in turn support further economic activity by, for example, improving education and employment opportunities. |
| Investors | Shareholders receive dividends, and the value of their investment may grow. | Investors may pay taxes on dividends and on stock gains. |
- 1 United Nations World Population Prospects: 2008 Revision.
- 2 Ng, Edward. Designing high-density cities for social and environmental sustainability. Earthscan, 2009.
- 3 US National Intelligence Council, Global Trends 2025, p 41.
- 4 This number includes PCs, printers, and servers.
- 5 Fiscal year 2010 non-GAAP financial information excludes $2.1 billion of adjustments on an after-tax basis, or $0.89 per diluted share, related primarily to the amortization of purchased intangible assets, restructuring charges, and acquisition-related charges. HP’s management uses non-GAAP operating profit and non-GAAP diluted earnings per share (EPS) to evaluate and forecast HP’s performance before gains, losses, or other charges that are considered by HP’s management to be outside of HP’s core business segment operating results. HP believes that presenting non-GAAP operating profit and non-GAAP diluted EPS, in addition to GAAP operating profit and GAAP diluted EPS, provides investors with greater transparency to the information used by HP’s management in its financial and operational decision making. HP further believes that providing this additional non-GAAP information helps investors understand HP’s operating performance and evaluate the efficacy of the methodology and information used by management to evaluate and measure such performance. This additional non-GAAP information is not intended to be considered in isolation or as a substitute for GAAP operating profit and GAAP diluted EPS.