The Tech Sector: Strength During Economic Morass
With lackluster job reports the norm these days, there is at least one bright spot in a class of occupations that has shown remarkably robust growth during the past decade: IT jobs. According to the Bureau of Labor Statistics, between 2001 and 2011, more than 742,000 new IT jobs were created, an increase of 29.1 percent. Indeed, employment in IT occupations in all industries grew more than 125 times faster than employment as a whole, which grew by only 0.2 percent during the period.
Figure 1: Growth in IT occupation employment vs. employment in all occupations, 2001-2011
Furthermore, during the course of the Great Recession, IT jobs have grown much faster than non-IT jobs. Between May 2007 and May 2011, while U.S. jobs shrank by -4.5 percent, IT jobs grew by 6.8 percent, contributing $37 billion to an economy that was otherwise stagnant. Even through the recession, the growth of these IT jobs has helped a growing number of families enjoy greater financial security. In 2011, IT workers earned $78,584 a year, 74 percent more than the average worker ($45,230).
As we look to the future we can expect more—not less—potential for IT job growth, because the U.S. economy is growing ever more dependent on IT for innovation, productivity growth, and quality of life improvements. For example, while business investment in all forms of capital increased by only 13 percent between 2001 and 2011, investment in IT capital increased by 66 percent, more than five times faster. New innovations are occurring regularly, from the expansion of high-speed broadband and cloud computing, to social networking technology and new kinds of mobile devices and apps. And we see more and more breakthrough innovations every year, as evidenced by examples such as the recent releases of Microsoft’s Kinect gesture-input device and Apple’s Siri natural-language processing technology. Indeed, a large portion of the fastest growing companies are IT-related. In the “2011 Inc. 5000” rankings of the 5,000 fastest growing companies in the United States, more 1,140 are in the IT industry, with a three-year average growth rate of 302 percent and revenues totaling nearly $54 billion in 2011 alone. In Deloitte’s “2011 Technology Fast 500 Ranking,” a ranking of the fastest growing high-technology firms in the United States, 330 of the 500 companies are in the IT industry.
These impressive statistics notwithstanding, it would be a mistake for policymakers to think that, simply because IT has been a jobs engine in the past, it will effortlessly continue to drive job growth in the future. Rather, in order to sustain the growth in IT jobs, policymakers must actively address both the supply side and demand side of the IT market.
On the supply side, for example, policymakers should overhaul and expand computer science education, particularly at the high school level, to enhance Americans' IT skills.
On the demand side, state and local governments need to step up investments in health IT, smart grid technology, mobile commerce, intelligent transportation systems, and smart IDs to unleash the full potential of IT job growth during the coming decades.