The Association for Computing Machinery (ACM), one of the largest organizations for IT professionals and students worldwide, has just published an excellent report, "Globalization and Offshoring of Software". It presents the findings of the organization’s study of the global migration of jobs in the IT industry.
The study found that despite the intensifying competition for IT jobs around the world, the movement of jobs between developed and developing countries can actually benefit both parties. Developing countries like India benefit by creating higher paying jobs and generating new sources of revenue. Developed countries like the US benefit since companies achieve better financial results reflecting the lower costs associated with the offshoring of some jobs. Those companies can then invest the increased profits in new business opportunities to generate more new jobs and to become generally more competitive in the fierce global marketplace in which we all live.
The ACM study analyzed the facts surrounding IT jobs in the US and came to conclusions that run counter to what some participants in this debate are saying. "The study cited data from the U.S. Bureau of Labor Statistics (BLS) which indicates that more IT jobs are available today in the U.S. than at the height of the dot-com boom. This trend is evident despite a significant increase in offshoring over the past five years. In fact, U.S. IT employment in 2004 was 17% higher than in 1999, and the BLS data reveal that IT jobs are predicted to be among the fastest-growing occupations over the next decade." There is a particularly good discussion of these findings in section 1.9 of the study under the heading "Is IT Still a Good Career Choice for People Working in Countries that Ship IT Jobs Overseas?"
A few days after the ACM report came out, the New York Times observed in an editorial: "The outsourcing of computing work overseas may not be as bad as you think. In fact, it probably isn't bad at all. Consider one recent study that says the problem isn't so much the competition from high-tech workers in places as far-flung as India and Romania as it is the discouragement caused by the doomsayers themselves." Referring to the study's findings that generally both developing and developed countries benefit in such an open, global job environment, the editorial goes on to say. "That picture, of course, stands in contrast with the more familiar gloomy depiction of runaway outsourcing. Perhaps that explains what the report says is declining interest in computer science among American college students. Students may think, ‘Why bother if all the jobs are in India?’ But the computer sector is booming, while the number of students interested in going into the field is falling."
The ACM study sheds light on a very important subject. I truly believe that technical talent is more important than ever due to the rapid advances in technology, the increased interconnected, global world we are all living in, and the incredible opportunities now before us to solve problems and build things that not too long ago would have been considered science fiction. In my opinion, we are at the onset of a profound IT-based revolution, one with the potential to alter the shape of companies, industries, perhaps even economies, and which could have the kind of impact on us in the 21st century that the Industrial Revolution had on previous generations.
If there is indeed such a historical change going on in the US and all around the world with IT as its catalyst and if technical talent is needed more than ever to address the new problems and opportunities, why is there so much consternation about IT jobs in general and outsourcing in particular? There is no simple answer to this question. As has generally been the case in the past, the effects of such technology-based economic disruptions are uneven. Some jobs are easier to outsource than others - those that are labor-intensive or becoming more standardized - and many jobs will disappear altogether through increased automation. If it is your own job that gets outsourced or disappears, the fact that this is ultimately good for the economy is little solace to you, your family and your community. It is very painful indeed, and there are plenty of such painful stories for the media to focus on.
Where are the new jobs? As IT is increasingly integrated into all aspects of business, government services, health care and education, and as just about everything around us goes digital, from consumer electronics through medical equipment, lots and lots of new jobs are being created "up the stack" to design, build and operate these new IT-based products, systems and services. The vast majority of the new jobs are no longer developing the technologies in the labs but putting the technologies to work in the marketplace. Let me try to illustrate what I mean with a hypothetical example. For every chip and semiconductor engineer out there, we need, say, five times the number of engineers designing products based on those chips, including hardware and systems software. We then need to design and build the many applications in a variety of industries that take advantage of these new products. And that results in another large multiplier for application engineers, perhaps another factor of five. Finally, we need another large number, say another factor of five in new jobs working with every business and institution to help them integrate IT into everything they do -- designing, building, operating and supporting their IT and business infrastructures. While the exact "multiplier" at each level varies, the number of marketplace-oriented jobs in the last two categories is probably one or two orders of magnitude higher than the number of lab-based jobs in the first two categories. That is where the jobs growth lies.
What should each country do to make sure that it can be participate in the creation of these emerging new jobs? The ACM study succinctly spells it out in one of its key recommendations:
"To stay competitive in a global IT environment and industry, countries must adopt policies that foster innovation. To this end, policies that improve a country's ability to attract, educate, and retain the best IT talent are critical. Educational policy and investment are at the core.
Building a foundation to foster the next generation of innovation and invention requires
- Sustaining or strengthening technical training and education systems,
- Sustaining or increasing investment in research and development, and
- Establishing governmental policies that eliminate barriers to the free flow of talent."
I could not agree more. Getting back to the question: "Is IT still a good career choice for people in the US and the many other developed countries that are outsourcing some of their jobs?" the answer is a resounding yes. Despite an environment with more global competition, those people, companies and nations that invest in research and education to foster innovation will do very well, given all the opportunities in front of us. As The New York Times editorial aptly concludes: "We have nothing to fear but the fear of competing itself."