Beyond the Algorithm: The Economic Impact of the Data Annotation Industry

Data annotation is a growing part of the US economy that provides the human-labeled data necessary to train advanced AI models. A study by Oxford Economics found the industry contributed $5.7 billion to US GDP in 2024 and supported nearly 200,000 flexible earning opportunities. The workforce is highly educated, with many using the work to supplement income around other jobs, education, or caregiving responsibilities. This flexible work is particularly valuable for its adaptability, and many contributors see it as a way to gain skills for future careers in the AI and tech sectors.