Economic impacts

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Many of HP's global citizenship issues stem from the impacts of our products and operations on society and the environment. Each of these, and many other aspects of our day-to-day business, can also have an economic impact on our stakeholders.

All companies have direct economic impacts¹ on stakeholders through their financial transactions. For example, HP impacts its:

• Suppliers through the prices we pay for goods and services and the timeliness with which we pay for them
• Employees through wages paid
• Customers through sales and product pricing
• Governments through tax payments
• Communities through our social investment programs
• Investors through our share price and dividends paid

As the money from these transactions circulates through the economy, HP's activities continue to have an indirect economic impact. In addition, HP products and services increase productivity, boosting companies' profitability and strengthening the wider economy.

Although rules for recording financial transactions have been refined over centuries, formulas for measuring a company's overall economic contribution to society are less developed. We can quantify some aspects and describe others in general terms. The table below outlines our direct and indirect economic impacts on each group we affect. See the Data dashboard for key data, and our financial statements for more detailed information.

HP's economic stakeholders and impacts

Group HP's direct economic impacts (on relevant group) HP's indirect economic impacts (through relevant group) Suppliers HP spent approximately $50 billion in 2007 on products, materials, components and services. Our supply chain spending creates jobs in supplier companies. These companies 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 overall expenses. We also invest in training and development, which increases employees’ skills and expands their opportunities. Employees pay taxes, and their private spending generates economic activity and supports their local communities. Customers Customers paid HP $104.3 billion in 2007 for our products and services. The products and services we sell to customers improve their productivity. This may increase their economic contribution to society through business expansion and more taxes paid. Local, state and national governments Local, state and national governments benefit from taxes paid by HP and our employees. Taxes paid enable government spending to carry out policy commitments. Local, regional and national communities Philanthropic investments ($47.1 million in 2007), support for nongovernmental organizations, and employee giving and volunteering all directly benefit communities. HP social investments in turn support further economic activity. Investors Owners of HP stock receive dividends and may benefit from growth in the value of their shares (see the chart in Performance). Investors may pay taxes on dividends and on stock gains when they sell their shares.

¹ Following the GRI G3 Guidelines: Direct economic impacts are often measured as the value of transactions between the reporting organization and its stakeholders, while indirect economic impacts are the results-sometimes non-monetary-of the transaction. See PDF, page 13.

	The socioeconomic value of IT

Although difficult to quantify, the information technology (IT) sector in which HP participates has wide-ranging benefits for individuals, companies and societies worldwide. Below we describe some of the socioeconomic advantages IT has contributed in recent years.

• IT is giving people in parts of the developing world access to electronic communications for the first time. This can make it easier to find, use and share valuable and previously unavailable information, creating opportunities to improve health, welfare and economic prosperity.
• IT supports flexible working by enabling people to work from different locations and join meetings by video or conference calls. This can reduce the cost of travel and its associated environmental impacts, and help employees to better balance work with their personal lives and commitments.
• Businesses can use radio frequency identification technology to automatically track items continuously, securely and wirelessly from the warehouse to the checkout, improving efficiency, security and customer service.
• The Internet and mobile technologies support democracy and expression by giving voice to people who could not otherwise make their views and experiences public on a broad scale.

Many of these services require personal data such as bank account, credit card and contact details to be entered and transmitted online and stored in databases. This requires robust procedures to keep data secure. It is essential to protect users from inappropriate or unwanted uses of their data. Read more about how HP protects customer privacy.

We must also consider the energy costs and environmental impacts of the infrastructure required to provide these services. See Energy efficiency for more on HP's efforts to reduce the energy used for data storage. These examples are typical of the tensions that can arise between different global citizenship issues and the needs of different stakeholders, and HP strives to find the right balance.